Does blockchain offer a solution to media's transparency problem?

Recent media agency and solution launches are advocating blockchain technology as the key to solving the lack of transparency in media buying.

Does blockchain offer a solution to media's transparency problem?

 Last November, TMG launched a blockchain based media agency called Truth an agency that promises to provide full transparency to clients thanks to its blockchain-based trading desk.

Then just last week, Unilever partnered with IBM's business strategy arm, iX, to create a blockchain solution that would simplify the digital ad supply chain and provide more transparency.

And on Monday, founder of Base79, Ashley Mackenzie received $1.5m (£1.1m) in equity partner funding to launch Fenestra, a blockchain-based media transaction platform.

While blockchain can solve some of the media industry's transparency issues, it is still a new technology and is perhaps not ready yet to resolve the murkiest area of the media industry - online

These companies believe that blockchain will, first and foremost, address the issue of transparency by providing a distributed ledger of all transactions that can be validated in real time.

Blockchain can also be used to move assets between peers without the assistance of intermediaries – thus cleaning up the supply chain.

And both Truth and Fenestra intend to use blockchain technology to validate transactions, replacing trusted third parties and intermediaries.

Mary Keane-Dawson, co-founder and global chief executive of Truth, said that several advertisers were currently testing the agency's trade desk in beta mode.

"Once advertisers see how it works they are delighted that they have the assurance that media-buying is happening the way we said it was going to happen," Keane-Dawson said, adding that Truth was in talks with "the top 20 advertisers in the world".

Truth is also currently one of five media agencies that are set to pitch for the UK government's £140m ad-buying account.

Fenestra's approach is slightly different. Rather than start an agency based on its technology, it instead intends to make its blockchain-based platform available to all agencies and clients and solving the ecosystem as a whole, Mackenzie explained.

"Either an advertiser will choose to use us and the agency will administer, or, and we very much hope, that agencies will choose our platform," he said.

But while blockchain can solve some of the media industry's transparency issues, it is still a new technology and is perhaps not ready yet to resolve the murkiest area of the media industry – online.

"Before we get too excited, the question remains just how far we are from full adoption and whether the speed of blockchain is compatible with the demands of real-time bidding and optimisation," Ryan Kangisser, managing partner at global media consultancy MediaSense pointed out.

Indeed, Fenestra is only aiming at tackling traditional media for now as underlying blockchain technology is not yet capable of handling the volume necessary for online trading, Mackenzie explained.

There is also the danger of blockchain itself becoming a tech "black box", Tim Hussain, managing principal, tech, Europe, Ebiquity, cautioned. "Advertisers who want this transparent view will need to invest time and resources in understanding blockchain, while avoiding the inevitable 'specialists' that will spring up to offer their services for additional fees."

Raja Rajamannar

Chief marketing and communications officer, Mastercard

In theory, yes. In concept, yes. But the proof of the pudding is in the eating. How does it get translated, executed and implemented? From my perspective, blockchain is a very interesting phenomenon that has tremendous potential across various parts of the value chain of marketing, not just in media. Most of these are in very nascent stages right now – most are experimental in nature. But if you fast forward a few years down the line, I think blockchains will play a very key role. 

Mary Keane-Dawson

Co-founder and global chief executive, Truth Media Agency

Yes. But the bigger problem in terms of the question of transparency is really that the business model of media is dominated by a handful of network media agencies that have created, through consolidation, a lack of transparency by over-engineering the entire ecosystem.

Ryan Kangisser

Managing partner, MediaSense

Absolutely it can, but to reduce it to merely a solution to the transparency problem (which for many is rooted in the lack of financial disclosure) is potentially doing it a disservice. Beyond the obvious benefits of improving supply chain transparency and stripping out ineffective and opaque non-working media, we see huge value in blockchain creating more plurality in the market (thereby reducing reliance in the walled gardens), improved visibility on where advertisers’ assets are appearing (minimising fraud & brand safety infringement) and critically improving control on how data is being used and whether it is compliant.

(But before we get too excited, the question remains just how far we are from full adoption, and whether the speed of blockchain is compatible with the demands of real-time bidding and optimisation)

Matt Dailey

Chief performance officer, Havas Group Media

At a top line level, yes, though I’m reminded of the quote, "If you think you understand Quantum Mechanics, then you don't understand Quantum Mechanics". How much do people really understand about Blockchain? How easy is it going to be to start integrating it to existing platforms at scale? What are the implementation and integration costs going to be and does this just shift non-transparency to another part of the relationship? And if it proves true that the technology can't keep pace with trading platforms, some clients are going to be losing out on performance when transparency could be achieved with a more open contract.

Tim Hussain

Managing principal, tech, Europe, Ebiquity

While blockchain has potential to be helpful, like programmatic it is in danger of becoming another "black box" for advertisers to figure out. For any advertiser to have a transparent view, they need to invest time and resources in understanding blockchain, while avoiding the inevitable 'specialists' that will spring up to offer their services for additional fees.

With the commercial opportunity blockchain creates for tech providers, in some areas, it is being proposed as a solution just so revenue growth can be achieved. Many transparency issues can be resolved without the need for expensive, technology led systems: just because you can, doesn’t mean you should.

Hugo Pinto

Managing director UK and Ireland, Accenture Digital

"Because Blockchain supports a transparent model of information sharing across multiple entities, it can make a big difference to media transactions, especially around programmatic campaigns. Having seen all the moves from the likes of IBM with Unilever, TMG’s Truth and more recently Fenestra, there is a clear intent to comply with the demands of the global brands around transparency and safety. But the opportunity is bigger than that. Blockchain provides a reliable, trusted source of the supply chain of media buying. As marketers want to get more insight into the effectiveness of their ad spend, they need to understand what’s been executed. As information becomes more open, it can also be securely distributed to a wider group of ad agencies, allowing different campaigns to be served on a more personalised basis. And that’s going to be good for everyone!"

Mark Howley

Chief executive, Zenith UK

A ledger that captures all transactions from start to finish and thereby provides transparency in the programmatic supply chain is definitely where the industry needs to get to, but there are a number of challenges to making this a reality. The main barriers today, as I see them, are threefold: the additional associated costs that such a solution would bring; the need for widespread adoption across inventory, data and tech providers for this to work; and that current processing times are not sufficient for real-time buying platforms. Directionally it feels right, but the end solution is not currently a reality.