The following is an excerpt from the new e-book, The CMO Primer For The Blockchain World: How This “Trust Machine” Impacts Branding, Customer Experience, Advertising and Much More by Jeremy Epstein, CEO of Never Stop Marketing.
It features forewords by the CMO of Nasdaq, Jeremy Skule and the CMO of Dun & Bradstreet, Rishi Dave. The e-book explores seven different marketing functions and how blockchains might impact them as well as highlighting a few emerging vendors in the blockchain marketing tech space.
To download the FREE e-book, please click here.
Today’s guest post is by Richard Bush, Chief Product and Technology Officer of NYIAX (@richtechbush) and Ben Feldman, VP of Technical Operations at NYIAX.
Richard has over 15 years of experience in the advertising technology industry. He comes to NYIAX from IPONWEB, a key infrastructure provider in the media trading ecosystem, where he was the General Manager of its Publishing Solutions business. Richard has also served as the VP of Product and Technology at AOL Networks.
Having worked in the digital advertising space since 2011, Ben brings a wide range of experience to his role at NYIAX. Ben started his digital career at Mocean Mobile, a mobile ad server acquired by PubMatic in 2014, where he was responsible for product and business management, contracts, billing, and programmatic operations. Ben received a BA from Hampshire College and resides in Belchertown, MA.
Toward a Better Future: Blockchain and Advertising
As blockchain has grown from a multi-industry buzzword into a realistically applied tool, the evolution has sparked discussions about the implementation of blockchain to address specific advertising industry challenges. Fraud, transparency, and reconciliation are primary examples.
Implementing blockchain as a means to address existing issues which plague the industry has merit. To be truly effective, blockchain must be utilized in a holistic manner, rather than a topical solution or a band-aid for singular pain points. As an industry we have an opportunity to design the future, not just retrofit a shiny new tool.
If the industry takes a unified approach, we can take advantage of basic blockchain principles, such as inclusion, native assets, permissioned access, and distribution. These tenants will advance adoption and scaling beyond siloed blockchain implementations, which promote data segregation. While individual problems can be solved through siloed approaches, the intentional disconnect limits success without additional intermediaries acting as translators, at which point blockchain is acting as a secure database, and little more.
In the first days of advertising there was a basic relationship between consumers, publishers, and advertisers. Over time, agencies emerged to represent groups of individual advertisers, providing an economy of scale and specialization. As advertising moved into the digital age, additional platforms, companies, and intermediaries spawned to support new areas of growth. With each additional actor, the supply chain between consumer/publisher and agency/advertiser muddied.
Here’s an oversimplified example of what it looks like, in regards to a modern real-time advertising bidding scenario:
When a user visits a publisher page, the action triggers requests to multiple exchanges – who in turn call multiple bidders acting on behalf of agencies/advertisers – while additional requests are sent to third party data services to identify the user, and compare the user to known sources of fraud. In less than a second, advertisements and revenue offers are provided back to the publisher, whose ad server makes a final decision on which ad to show and how much money they’ll get for doing so. Then, the question of how long the image was in view for the user, whether they clicked on the ad, and performed any additional actions comes into play. All information from the activity is then relayed back to multiple parties.
This Frankenstein’s Monster of requests and responses grew out of a need for verification. The blockchain’s natural network integrity can streamline this process, providing consistent and trustworthy verification, while improving user experience as well. With so many different types of actors (publishers, advertisers, intermediaries, data companies) involved in any given campaign delivery, it’s no wonder fraud and transparency issues manifest so frequently. If multiple blockchains are created, each trying to solve a separate area of concern, or to serve a sub-set of actors, we may shine light into some of the black boxes, but if we work together, we can accomplish a great deal more. It is for this reason that NYIAX has been tasked by the IAB (Interactive Advertising Bureau) to co-lead a working group focused on blockchain development.
Looking beyond the need for a single industry wide blockchain, questions of utilization arise. Price transparency? Delivery and user verification? User privacy protection? By resolving these questions, we believe it’s possible to finally fix the broken value exchange that web 1.0 originally introduced.
At the end of the day, it comes down to basic desires:
1. Advertisers/agencies want to engage users, and verify the message they’ve paid a publisher to deliver did, in fact, reach a real human
2. In return, publishers want a fair exchange of value as rapidly as possible for performing their task, which in turn allows them to generate more and/or better site content to build their user base
3. Finally, users want access to content as inexpensively as possible, without being exposed to intrusive or irrelevant messaging, and without feeling they’re being spied on
If we assume for a moment that blockchain can assist in fulfilling those desires, economics becomes a consideration. If payment, time, and delivery verification are all contractually identified actions, the next logical step within a blockchain world is the utilization of a “networked incentive mechanism” which empowers and encourages trade amongst the parties involved.
Critical to this is a strong proof of work mechanism, which in part already exists within digital advertising. The delivery of an impression to the desired and actual user, when verified by multiple actors, will generate proof that the asset – that of a verified impression delivery – has occurred. Proof of asset is key to the digital ecosystem, creating a method of trade accessible to all participants which can be utilized for the dual purposes of payment exchange and delivery verification.
This is not to say there are no risks with an industry wide blockchain. The current speed of writing to blockchain does not support the billions of impressions (let alone the exponential request volume) delivered daily. This restriction may be overcome, but in the meantime, other methods of streamlining decisioning and verification may be needed.
In summary, blockchain is now front and center in key discussions regarding the evolution of advertising. Its implementation can benefit all actors and align the necessary processes and transactions that must take place for all to ultimately win. However, to do so requires a core understanding of the inherent challenges, the stop gaps currently in place, and how blockchain and/or similar systems fundamentally realign the system to benefit consumers, content creators, and marketers. With today’s global markets in transition, we are excited to be helming conversations with peers who share our commitment to ensuring that the future of advertising is better than the present.