Assessing blockchain for marketers: Potential is there but caution advised
Blockchain, like artificial intelligence and augmented or virtual reality, is a buzzword which currently produces more utopian dreams than use cases right now. A new report from advertising media behemoth GroupM aims to get past the fudging and explore the facts of how blockchain technologies can benefit marketers.
The report, authored by GroupM investment chief product officer Jack Smith, argues at a wider context the role of distributed ledger technologies (DLTs) in managing digital identity and adding transparency to the supply chain is ‘promising.’ The opportunity for how it can affect advertising – from the marketer side, to platforms and publishers and finally users, has potential but needs to be broken down further.
For the consumer, the goal never changes even though it feels as though the goalposts are moved; they want content as inexpensively as possible – free ideally – not be harassed by ads and not feel as though their privacy is impinged on. Easy, right? Marketers want to find, reach and engage consumers meaningfully, while the platforms want to maximise their yield and monetise their content in the most cost-effective way.
As any fule kno, this three-way battle has friction at its heart. The GroupM report outlines the ecosystem currently as based on three models; streamlining processes across multiple entities in the programmatic value chain, building a secure value transfer system through better audience planning, and offering greater data and identity management capabilities. “The clear potential benefits of DLT are in supply chain transparency, audience planning, identity management and content authenticity, but only after billing and reconciliation-led issues are addressed,” the report noted.
The programmatic landscape can be portrayed as an entangled web of technologies, solutions and players. Indeed Nicolas Bidon, CEO at Xavis – a GroupM business – recently told the AdAge Ad Lib podcast “the biggest misconception is that programmatic is easy.” Can blockchain make a dent in this area, or will it just add to the confusion?
The report notes solutions in the programmatic ecosystem to date “have merely been expensive Band-Aids” and argues while blockchain may be attractive to the tech companies, it won’t quite be the panacea many hope for. “By 2020, all major corporations are anticipated to deploy consultants in examination of DLT projects for cost cutting,” Smith wrote. “However, for every dollar spent on DLT, another $20 will be spent on the ‘transformation’ element of these projects.”
Smith nods towards the Interactive Advertising Bureau’s (IAB’s) various initiatives regarding blockchain, particularly noting the multiple collaborators in certain projects, such as the IAB, IPA (Institute of Practitioners in Advertising), ISBA and AOP (Association for Online Publishing) in one great bowl of alphabet soup. Again however, this comes with a caveat.
“While DLT is perceived as viable for providing authenticity and authorisation, its mere application will not mean that fraud will vanish entirely,” the report said. “If an ad impression is delivered on a fraudulent site by a legitimate ad server and written to a blockchain record, that record may not be tampered with.”
The report’s message is one of very cautious optimism – and it is one which many practitioners in the industry are currently adopting. Writing for this publication at the start of the year Mark Miller, VP group account director at RAPP, argued the potential in brand advocacy and customer engagement among others.
“As with any new strategy that requires technology adoption, databases, or third parties, the first step is to understand how the introduction of blockchain will fit in with your business’ vision and objectives,” wrote Miller. “What do your consumers want? And how can you build better relationships with them?
“Companies that want to fold blockchain into their everyday marketing tactics have one crucial thing to do: align it with their goals,” Miller added.
For Smith, any potential rise of blockchain technologies from a marketing point of view needs to be seen from a wider perspective. “DLT’s role in the coming year may be analogous to that of cheap consumer broadband in enabling mass market videoconferencing technology,” Smith wrote. “Real-time videoconferencing and videophones were promised for decades. AT&T successfully developed videophones in the 1980s, but soon discovered that the development of cheap broadband technologies was a prerequisite to rolling out the services.
“Today, for applications like applied machine learning and artificial intelligence, blockchain and other DLTs may play a similar catalysing role,” Smith added. “For this reason, it is important that DLT’s potential [should] not be ignored.”
You can read the full report here.
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