The following is a guest article by Donny Dvorin, general manager of Never Stop Marketing Research, a leading analysis and consulting group focused on blockchain martech providers. Jeremy Epstein, the CEO of Never Stop Marketing, will be keynoting the MarTech conference this October 1-3 in Boston.
It was clear to anyone who attended one of the many talks — or screaming matches — touching on blockchain at Cannes this year that a major technology debate around the future of how advertising will look is gathering steam.
Can blockchain technology really bring long-awaited solutions to longstanding issues including lack of transparency, fraud, consumer privacy, fractured measurement, and slow payments?
There are passionate believers and doubters on both sides, and the stakes are high enough that seasoned professionals are losing their cool. What’s a marketer to think?
The key, at least for now, is patience. Calling a winner in the first inning of the game is pure speculation, and we’ve barely seen the first pitch.
Think of it like this:
It’s as though, suddenly, a new kind of computer has been invented, with fundamentally different rules, and immense promise. Early prototypes have been built, and they’re really good at doing certain things that other computers simply couldn’t accomplish. The plans are open source, and companies are starting to build prototypes and solve problems with them.
However, the majority of what’s been built to support normal computers doesn’t work with this new kind of computer, so a lot of infrastructure has to be rebuilt. It’s reminiscent of exactly 10 years ago on July 10th, 2008 when the iPhone App Store launched with 500 apps. Today, there are 2 million available apps, with over 180 billion downloads to date, per Statista.
Most of the companies/projects on Never Stop Marketing’s Blockchain MarTech Landscape are under 18 months old. The majority of these companies are building their tech and connecting the ecosystem’s pipes, while others already have pilots with brands in market, but have yet to go public in the trades.
There are approximately 200 martech companies claiming to use blockchain technology to help solve marketer’s needs. Of those 200, 48 (or 24%) are specifically focusing on programmatic media and adtech.
The issues these blockchain adtech companies are tackling are coming into focus now:
1. Transparency into the Media Supply Chain
P&G’s CMO Marc Pritchard must have launched at least a few companies with this quote: “We have a media supply chain that is murky at best and fraudulent at worst. We need to clean it up and invest the time and money we save into better advertising to drive growth.” Pritchard described standards compliance, unreliable measurement, hidden rebates and fraud as major challenges.
Juniper Research reports that in 2018 advertisers will lose $19 billion to fraud. Additionally, according to a TBR study reported on MediaPost only 40% of digital media is going towards “working media” with the remainder split between agencies and technology vendors. In other words, when a marketer places a digital media buy of $1 million, $300,000 (or 30%) can go to the adtech tax in the ecosystem.
Many of the blockchain solutions in the marketplace aim at creating transparency, including:
- IBM Blockchain — Providing transparency by starting with basic financial reconciliation solutions for digital media buying.
- Papyrus — Connects advertisers, publishers, agencies, advertising platforms and verifiers within Papyrus blockchain network to create trust, fairness and efficiency within digital advertising market.
- AdBank — Platform built to show transparency of payments between advertisers and publishers.
- Adshares — use blockchain to let publishers and advertisers trade directly using our cryptocurrency.
Transaction Speed: One project providing transparency that’s laser focused on transaction speed required for programmatic media:
- Ternio — A blockchain solution that can support the high QPS of programmatic media buying.
Fraud Mitigation: A few of the companies are primarily focused on fraud, in addition to transparency:
- XCHNG — Open and unified blockchain network that mitigates fraud in real-time using smart contracts.
- Rebel AI — Focused on identity, consensus, and currency to remove domain spoofing.
- MetaX — Created AdChain Registry dapp to decipher which ad-supported websites are legitimate and why.
- AdEx — Removes middleman by transacting advertising direct from advertisers to publishers.
- Lucidity — Solution to cutdown on fraud and bring more transparency to digital advertising.
2. Data Privacy
This spring GDPR and the Facebook Cambridge Analytics scandal have shone a bright light on data privacy practices within marketing. Not only are consumers demanding their data stay private, governments and now states (CA) are as well.
Each marketer must also analyze their own challenges as they relate to data privacy. Solutions include:
- MadNetwork — Built with privacy by design, pulls in relevant ads based on a user’s AI powered device profile which is secure, never shared, and sealed.
- Datawallet — envisions a marketing future where consumers hold the data about themselves on their own devices and controls who gets the data, what the data says, and share the data in exchange for direct compensation.
- Killi — Provides advertisers with a first-party user base that is 100% verified, opted-in and GDPR-compliant, while still able to be used in any global buying or data platform.
- SRAX’s BIGtoken — Allows consumers to own, verify, and sell their data.
- Civic — Allows people to take control and protect their identity using the Civic Secure ID in their app.
3. Payments & Settlements
Payment terms are an enduring thorn in the sides of many industry players, especially those in the middle and on the publisher end. Long payment terms “are a tax on the industry for technology companies that are responsible for programmatic transactions,” as Rubicon Project CEO Michael Barrett has said. “For brands that are ready to create a more profitable supply chain, offering better payment terms could be a huge incentive for wary technology companies to become more open with their tactics and streamline their business model, saving brands millions in the process.”
- Amino Pay — Optimizes reach in supply chain by reducing fraud and showing transparency based on payments.
- NYIAX — Built in conjunction with Nasdaq to trade media future contracts on a blockchain ledger.
- FusionSeven — Automates supply chain financial reconciliation to create trust and transparency from contract to payment.
- AdCoin — Creating micropayments for advertising.
4. Putting Consumers First
For the most part, outside of coupons and rebates, consumers haven’t been rewarded for their attention. Due to token economics, consumers can be rewarded in tokens for the actions they take. A few of the companies who incentivize consumers, or allow them to use their tokens to pay publishers include:
- Basic Attention Token (BAT) on the Brave Browser — Creates ad-free environment on the browser, protects privacy, and then uses the Basic Attention Token to exchange value between publishers, advertisers, and users.
- Presearch — Decentralized search engine that rewards community members with Presearch Tokens for their usage, contribution to, and promotion of the platform.
- Kind Ads — Allow consumers to be incentivized for their data being used, and be incentivized more to allow access via a tokenized rewards pool.
While these use cases are first at bat, this early in the game we can expect many more to appear for their turn as the technology and infrastructure develop. Overall, look for solutions that create value by creating trust where there was none before, or by eliminating players who extract rent in exchange for trust.
Marketers must be very clear on the problems they are trying to solve and what their business objectives are to play in this space. In some cases, a non-blockchain solution may solve the problem, but in others blockchain technologies may be the only path.
Don’t miss Jeremy Epstein’s keynote presentation at MarTech, “The Emergence of Crypto-Native Martech: Tools of the Future, Already Here Today,” in Boston, October 1-3.