Unilever encouraged by blockchain ad-buying pilot

FMCG giant wants to develop blockchain as solution for wider digital supply chain.

Blockchain: Unilever has been working with IBM
Blockchain: Unilever has been working with IBM

Unilever’s foray into digital ad-buying backed by blockchain has begun positively, the FMCG giant has reported, after a pilot project found "zero leakage" in any of its media investment. 

Luis Di Como, executive vice-president for global media at Unilever, told Campaign that the project has helped the company save money in ad reconciliation – the process by which advertisers ensure contracted agreements are actually delivered.

Unilever has been working with IBM to create a blockchain solution for the past 18 months. IBM, which has pivoted into an artificial intelligence pioneer in recent years, has estimated that Unilever has saved "two to three percentage points".

Many of the world’s biggest advertisers, including Nestlé, McDonald’s and Virgin Media, are looking at blockchain as a solution to drive down costs and increase transparency in online ad buying, which can be a complex ecosystem vulnerable to waste and fraud. It’s a particularly acute area of focus in the UK, where more than 60% of advertising is now spent online.

Following the test in the US, Unilever is now scaling the pilot and has created a consortium with Mediaocean, the ad software and computing company, with a view to developing blockchain as a solution for the wider digital supply chain.

"This is not going for the latest shiny tool," Di Como insisted. "We are going through our rules and our principles to built trust again and having full transparency across all of our operations." 

Blockchain is a distributed ledger system in which records are supposed to be tamper-proof (because records are immutable and shared throughout the chain) and is potentially much cheaper because it does not require a centralised database.

However, Di Como insisted that this is not a "cost-cutting exercise". He added: "It’s about finding better ways of dong things and releasing capacity to invest more in strategy, communications and media investment."

Clearly, there will be an incentive to in-house more digital ad buying if Unilever can find a workable blockchain solution at scale. But Di Como said he has been working hand in hand with Unilever's media agency Mindshare, having used a "hybrid" approach over the past decade.

"There is a debate right now in the industry: in-house or agencies. This kind of polarised view is not the approach we take at Unilever. We truly believe in a world of 'and' rather than 'or'. We truly believe in a world where we maximise and leverage all our Unilever scale, while using the expertise, processes and technology that our partners bring. We talk about a hybrid approach.

"Over the years, we’ll dial up or dial down some of the areas based on the challenges that we have, but I truly believe in the added value that agencies bring to the table, in terms of people, expertise, sale, technology. Getting the best out of media agencies helps us maximise the returns on our media investments."

Programmatic ad buying, for example, has inspired a signficiant change in how Unilever works with its media agency. It has its own Unilever trading desk, Ultra, which fits into the company’s "hybrid" model.

"We didn’t have, 10 years ago, a programmatic trading desk, neither internally nor at our agencies," Di Como explained. "Our solution was to co-create something that is fully transparent. Now we are working on this with all of the skills and scale that we and our agencies provide together."

On the rise of agencies specialising in blockchain in the UK, Di Como said: "I am familiar with some of the agencies that have launched here. I’ve seen some experiments in the UK where people are trying to replace media agencies with those companies. That was maybe why it didn’t take off. IBM, Group M [Mindshare] – all of us are working hand in hand throughout this process."

In the UK, Truth and Fenestra are the most high-profile blockchain companies that have launched in recent years. Truth said it would "change focus", while Fenestra (which describes itself as a platform rather than an agency), by its own admission, been getting about its business quietly.

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