All Four Major Ad Holding Companies Unite Around Blockchain

Blockchain and Ad Companies

The advertising industry has benefited from the digital revolution as evidenced by the massive reallocation of money from traditional media to digital advertising.  However, such has also highlighted problems that have plagued the industry as it continues to assert its value to the advertisers who provide the cash, let alone to actual consumers.

Alan Wolk writes about an unprecedented collaboration of the four largest ad holding companies on the planet:

  • IPG
  • Publicis
  • Omnicom
  • WPP

Their participation in the nonprofit AdLedger was established to “further trust and transparency within the digital media space.”

The AdLedger website also states: “We are a nonprofit research and development consortium charged with implementing global technical standards and solutions for the digital media and blockchain industries.”

Wolk describes the initiative as an attempt to solved the “Four Horsemen of the Ad Apocalypse”:

  1. Fraud
  2. Lack of consumer privacy controls
  3. Too many middlemen
  4. Lack of transparency between publishers and advertisers

Blockchain represents a potential and meaningful solutions to these issues which have been a bane to the industry.


Ternio and Advertising on Blockchain

The above video is Daniel Gouldman’s (CEO Ternio) presentation at The Blockchain Revolution in Advertising, on Sept 28, 2018, in NYC.

Ternio describes itself as “the only scalable and decentralized blockchain framework capable of over 1 million transactions per second.”

The intent of Ternio’s blockchain is to enable brands, ad agencies, and ad tech providers to gain transparency of the ad supply chain, fight ad fraud, and facilitate real time payments.

Gouldman outlines 4 primary ad industry issues that need solving:

  • Fraud
  • Transparency
  • Payment lags
  • Scalability

He notes that currently digital advertising is mediated by centralized companies, such as Facebook and Google, which are prone to errors and opacity.

Blockchain eliminates the need for intermediaries, since the data is distributed to many participants, who all see and can verify the same data.

Currently, the primary blockchains in existence cannot scale enough to handle the volume of ad transactions. The problem is currently being addressed. An example is Ternio’s own blockchain, Lexicon, which is theoretically unlimited in processing transactions.

In some blockchain ecosystems, participants are forced to use centralized services as part of their data and transaction layers, due to the current limitations of transactions per second.

However, on a true blockchain all the different participants have their own place in the blockchain network by way of their own servers, which makes them a transparent part of the advertising ecosystem.

A basic concept is integrating other data layers on top of blockchain.  For example,  entities such as advertisers, agencies, publishers, the demand-side platform (DSP) and supply-side platform (SSP), are all part of the digital advertising ecosystem and each would be paid immediately for their work, once confirmed and validated in real time by the blockchain.

In the current, centralized, ecosystem it’s hard to identify exactly where fraud enters and exits.  Due to the transparency of blockchain, fraud is mitigated.

Blockchain: A New Marketing Paradigm

Eventually (in the not-too-distant future), blockchain will impact most commerce.  It will make business and operations more efficient, more accountable, more transparent and less expensive.

The rise of cryptocurrencies as a speculative asset, culminating at the end of 2017, as well as the crypto bear market of 2018, may dominate the hype cycle, but the real work of blockchain development is still in an early stage of changing the world.

In terms of blockchain as a base platform for practical applications, the financial technology sector has captured a chunk of the spotlight and the battle lines are being drawn for a new era.  How much (or little) traditional banks and governments will be able to influence global exchange of value is in the process of being determined.

However, all sectors can, and ultimately will, be influenced by blockchain.

On a fundamental level, blockchains cut out expensive middlemen such as banks and lawyers, so the opportunities for increased productivity are significant.

In relation to marketing, the following article, 7 Ways to Build Your Brand with Blockchain Marketing, suggests a new marketing paradigm:

By contrast, the blockchain offers a different approach to digital ads and marketing. The decentralized, peer-to-peer model brings the customer into equal, dynamic dialogues with businesses, and lets customers generate monetized marketing content for their favorite brands through that engagement. This implies that in the earned media blockchain ecosystem, we are all equal and active partners.

Perhaps one of the more interesting opportunities for marketers is the promise of bypassing advertising middlemen, such as Google and Facebook, and putting messages directly in front of those who are interested.  At a reduced cost, no less.  In fact, the ad payments would go to those consuming the messages. (And/or those creating messages for the brand).

Of course, in the same way that banks are going to do their best to stay relevant, by placing themselves within the blockchain, advertising middlemen, Google, Facebook, et al, will do the same. It seems probable that their ban on crypto ads this year is an attempt to pause the momentum so they can evaluate the space to their advantage.

I do not suspect that Google and Facebook will go away (although some other intermediaries probably will).  They need ad revenue to survive and they’ll figure out some way to maintain a slice of that pie.  However, expect  that names of companies with whom we are yet not familiar, will come to be just as well known, and perhaps more so, for no other reason than providing more value for less cost.

Regardless of how the advertising media landscape plays out, marketers and consumers will win.