Digilant Hosts Panel On Blockchain Innovation in Ad Tech

Blockchain Explained for: Digital Marketers, Media Buyers & Advertisers

BOSTON, June 28, 2018 /PRNewswire/ — Digilant, a global provider of programmatic ad buying solutions and services, assembled a panel of speakers in Boston, to discuss the impact of blockchain innovation on the advertising technology industry. The panel was moderated by Adam Cahill, Executive Chairman, Digilant US and CEO of Anagram and the panelists included:

One of the more prominent buzzwords in digital circles these days is “blockchain” and, as is the case in the early days of a market trend, there’s significant confusion about its meaning, application, and future. That’s certainly the case with blockchain in general, and more specifically, what it means to marketers and digital media professionals.

To give our community insight into where this trend is going, Digilant pulled together ad-tech’s leading experts on the topic of blockchain for a dinner panel at the scenic Legal Harborside in Boston’s Seaport District. The room was full of  leaders across the spectrum of digital media buyers, technologists, and investors. After an hour of conversation, everyone walked away with a deeper understanding of the topic but here are the highlights.

The Digital Media Supply Chain Is A Serious Problem Looking For a Solution

That the advertising industry has efficiency challenges to address is undeniable. And while digital advertising channels have created more opportunities to address consumers where they are across screens and experiences, the supply chain needed to deliver relevant and compelling ads is complex – likely, unnecessarily so – to the detriment of the channel. By some estimates, more than 50% of internet advertising is wasted due to issues relating to viewability, fraud, and transparency. In an industry category that totaled almost $90 billion in the U.S. last year, according to the IAB and PwC, that means serious dollars are frittering away.
Joe Zawadzki of MediaMath, one of the largest independent digital advertising software companies, described the reach and complexity of the supply chain challenges: “In too many instances, advertisers lack transparency, discrepancies arise among stakeholders, inventory fails to meet quality standards, and/or a noisy minority of bad actors exploits internet infrastructure weaknesses to siphon unearned value from the ecosystem.” And this doesn’t even speak to the privacy and GDPR concerns that have been front-and-center in recent months, which add yet additional complexity.

While industry associations and watchgroups have been discussing these challenges for years, momentum accelerated in 2017 when CMOs from some of the largest advertisers on the planet — Procter & Gamble, Unilever, Bank of America — began talking about the issues publicly and frequently. In turn, the mainstream business press now covers the trends more closely, and that means CEOs and CFOs have been put on alert. That of course means that CMOs need to be armed with information and problem-solving tactics to explain how they are addressing the problem. And blockchain will be part of the longer term solution. MediaMath has already started working towards integrating blockchain for their programmatic platform by announcing its investment in a new business, Underscore CLT.

How Blockchain Works?

At its core, blockchain is a relatively complex and technical suite of technologies that “allows a network of computers to agree at regular intervals on the true state of a distributed ledger,” according to Christian Catalini of MIT. And a quick Google search reveals a slew of explanations, including this user-friendly video from Simply Explained.

Isaac Lidsky of Underscore CLT, offered an analog example to explain blockchain. “Imagine,” he explained, “that it’s the Middle Ages and you’re a general of an army that’s loosely confederated with other armies, and you’re about to attack a position that’s defended by the Roman Army. If the attacking armies act in concert and coordinate their attack, everything will work out great. The worst thing they can do is not act in coordination. But at the same time, it’s impossible to trust the communications being transferred by the generals and their runners. It’s similar to the situation faced by advertisers, publishers, and intermediaries today — except more complex; there are thousands of players involved, and blockchain technology offers the ability to facilitate communication and transaction which can be taken as the truth.”
Sound complicated? It is. But marketers don’t need to worry too much about the underpinnings of blockchain. Others will figure that out — entrepreneurs, technology companies, regulators and the like. But just like marketers don’t need to understand how the internet works, they do need to understand its implications on the ability to go to market effectively for their companies and clients.

Blockchain Will Disrupt The Ad-Tech Supply Chain In The Near Future

Blockchain will offer significant benefits to marketers — and it will probably be disruptive at one point but we are not sure when — the technology being used to power digital advertising today is due for a significant upgrade, and quick fixes are not a longer term solution. That’s why MediaMath, Facebook, Google, Amazon and others are all investing in blockchain right now as the marketplace expects more data privacy and transactional transparency from these advertising giants.

Erich Wasserman, CoFounder of MediaMath thinks that “there are structural imbalances, fraud in the marketplace, vendors of dubious value, and people are unclear what the contribution to the value actually is by individual participants. We are in need of a mechanism to go deeper into the ad impression and surface what exact value individual technologies are adding to the return on investment.”

Ross Benes of eMarketer summarizes the promise and challenges of blockchain neatly in a recent piece. “Some ad industry observers believe that blockchain’s open and distributed ledger could clear up some of these issues by making advertising transactions more transparent. But right now, blockchain doesn’t operate quickly enough to work in the fast-paced bidding world of programmatic advertising. Until the technology gets faster and more people adopt it…” Fortunately, if there is one thing of which we can be certain it is that technology will continue to develop and disrupt at rapid pace – which, of course, is the reason we’re here discussing blockchain at all. As stated above, there is heavy investment in the technology, so marketers need to keep their eyes on the prize.  It’s going to be a race to the finish line.  The first company able to mainstream the technology will write the rules for everyone else.

When it comes to broad marketplace adoption, it’s always difficult for new technologies to enter on a grand scale, and usually requires either massive investment from one or a handful of companies (think Android / Google), or a disruptive evolution in user behavior, such as the massive increase in smartphone adoption (negligible in mid 2000s to around 80% in mid 2010s).

Companies like MediaMath and Underscore CLT are working on the speed and adoption issues, while organization’s such as Dave Balter’s Flipside Crypto are constantly on the lookout for attractive companies to invest in that rely on blockchain technology or infrastructure. Dave Balter used an analogy to the music industry to explain the resistance of some in the ad industry to adopting blockchain: “at first, the music industry was very opposed to digital music. It was a ten year process to get them to adapt to the digital side but they quickly realized it was a process in which they would make a little less money in the short term, while transitioning to secure a sustainable future.”
 

In Summary

The dinner panel was a great education for all who attended, an opportunity to hear from real experts, and get a glimpse into how blockchain could impact the digital advertising business. And like MediaMath, we are very concerned about the internet advertising supply chain, as it’s core to our business — and these are the areas of our industry where blockchain could be most impactful, at least over the next several years. So these are the three primary takeaways:

  1. We are keeping close tabs on blockchain. Just as we do with any other market trends that have the potential to impact data management, demand-side platforms (DSPs), exchanges, and trading desks.
  2. We do not anticipate blockchain having a material short-term (6-12 months) impact on ad-tech methodology. Programmatic vendors need to stay customer focused and transparent until blockchain enables the technology to automate more fraud detection as well as changing the value supply chain.
  3. Big players in the industry could accelerate blockchain’s application in the digital advertising business. As is the case with any emerging technologies — think about the growth of open source in the mid-2000s — the adoption and acceleration of blockchain could be turbo-charged by big company attention and investment. For example, IBM made an announcement at Cannes last week; if this launch is successful, it will likely attract other influential organizations (Oracle, Adobe, etc.) and so blockchain’s role in advertising could look very different in 2019 or 2020.

 

Boston Dinner, Dessert, Fireworks & Everything Marketers and Media Buyers Need to Know About Blockchain

On Tuesday, June 12th, Digilant hosted a dinner panel in Boston titled “What Marketers & Media Buyers Need to Know About Blockchain.”Anagram’s Chief Executive Officer, Adam Cahill, moderated a discussion about the complexity and opinions on where blockchain is headed and how marketers, media planner and consumers will be affected with the following leading experts on the topic:


When discussing blockchain, most people have a very general idea of what it is – something to do with cryptocurrency, transparency, or monetary safety. But, when it comes to how blockchain is implemented, used and especially how it will affect marketing, media and consumers, most people are not well versed. Experts, like Dave, Isaac and Erich expressed their thoughts during the evening and gave their opinion on how best to prepare and stay up to date on changes due to blockchain.

This is my summary of what was said and what I took away from the event and not word for word for how the speakers answered each question.

Adam kicked off the event with the first question: What problems is blockchain designed to solve?

Isaac took to answering this question with an analogy that dates back thousands of years – dozens of commanders are defending their army and they need to coordinate their action, they need to decide to attack or retreat. Obviously, if they act correctly, everything will work great, however, the worst thing that can happen is if they don’t act in coordination. Within their army, there are messengers, which you can choose to trust, with the hope that they aren’t lying. Through all the chaos, they must come to a consensus on a truth of the situation and decide on what plan will work best. Blockchain is the first time we are able to solve the problem in a meaningful way, which doesn’t necessarily yield trust, but facilitates a conversation that everyone can take as the truth. So to draw a direct analogy, in the world of bitcoin, the general’s are the million of people that want to trade. These people need to decide who has how much and who needs to give what to whom. With the increasing complexity of ad tech – over 2000 tech providers and any given campaign you can invoke dozens of them and that will serve one ad to one person – we can now solve this very effectively. With blockchain, there is the ability to (1) solve longstanding structural issues in the industry and (2) solve the dumb pipes of the internet that weren’t meant to survive, bringing about a whole new generation of innovation, models and tools.
Erich joined in stating that blockchain is going to solve everything. Through all the issues that ad tech and digital marketing face, the consumer is the victim. Blockchain is in its infancy, people are talking and trying to figure out what they think. The companies who are quickly and aggressively creating a solution are a mess because it is such an early start. However, from this mess, applications that answer some of these questions will emerge, some taking longer than others.

Adam then asked Dave to play the role of contraire, to which he responded that out of ten possible use cases, there’s a handful of real cases where blockchain would help and ad tech is is at the top of that list. For ad tech, the problems really need to be solved. But he questioned, can blockchain change a company from the inside? Will you start adding blockchain or will you have to rebuild from the technology from scratch? People are saying they will start from the inside, but it isn’t happening. He posed the question if it can really be done?

Erich responded stating that after 22 years of ad tech, it would be ironic if this was the answer, if we are going to use the “stuff” we have today. The “stuff” we have today is bubblegum and duct tape – a quick, easy fix that isn’t sustainable.

Inspired from Erich’s response, Adam asked him why after all the different fields he has found success in and companies he has started, he planted his roots in ad tech?

Erich stated that he is a believer in ad tech, not to say it is without problems. He was surprised to see, after significant research, that many of the problems that ad tech is facing today, stem from the late 90s. Blockchain is new, it’s misunderstood, misapplied and many people say they have the solution. However, when you take into account that there is an opportunity to completely change the industry, there is a generation one opportunity to roll out some core functions that would sit next to and eventually replace that technology. His choice to work in ad tech was deliberate. He believes there is an opportunity to develop a new standard platform that will only succeed with adoption. But, they will get it done.

Adam turned to the audience as someone was curious to learn who profits from the current model? And if this were to start from the roots up, that would mean people are demanding this type of transparency. So, who can block this? Or who would be an objector?

After Dave joked that he’s the guy who isn’t benefiting from the current model, he went on to explain that the finance industry is taking their slice from everyone else. Everyone wants to maintain their part and when you insert something new, everyone wants their piece to be protected. However, no one gets a piece until we use this new system. You would need a consortium of the biggest companies who come together and break down the whole system. It would start from no one getting anything, building back up, and forcing big companies to join in. Naturally people are going to resist.

Erich jumped off of Dave’s point to say that there are people making more money than they should because the inefficiency is bigger than it should be. There are structural imbalances, frauds in the marketplace, vendors of dubious value and people are unclear what the contribution to the value actually is. We are in need of a mechanism to go deeper into the ad impression and see what the vendors are doing to the plan. Doing this would add a lot of value because as of now, lots of people are profiting but not off the right denominator.

Isaac concluded the answers to the question simply stating that there is no doubt that it is a big deal to get an industry to adopt a new idea. It is a challenge but that’s why it is interesting.

The next question also came from someone in the audience who asked how long they thought it would take for this to come to fruition?

Erich first stated the cop out answer that this will come to fruition during our lifetime, continuing to say that the real answer requires a conversation with publishers. There is an iterative way to roll this out that will provide accountability and legitimize the technology, all of which through new innovation. He concluded saying that he sees this happening in five to ten years.

After hearing those numbers, Adam asked if Erich thought it would be possible to see something like this happen in the next year?

Isaac jumped in to say that there are certain things that could sit next to the current technology.
Erich added that other organizations are developing their own points of view. Very large media planning organizations have a process where they sit in front of a media planner and select where they want to provide orders. There is a great deal of buying that happens quite transactionally. So, there is clarity, reporting and accountability in this process that can be taken and applied to blockchain. This could provide an intermittent step in showing the value in accountability for traditional media buying. At the impression level however, this is much more interesting as there are 12+ companies involved in each impression served to a consumer. He concluded stating that the analog way of buying is not going to last throughout our lifetime.

What is motivation to create this and bring it to the marketplace?

Dave used a comparison to the music industry to answer this question. At first, the music industry was very opposed to digital music. It was a ten year process to get them to adapt to the digital side but they quickly realized it was a process in which they would make a little less money while transitioning over in order to secure a sustainable future.

Isaac stated that there is a noisy minority of bad actors who are largely spoiling things for the other folks. The core of all of this comes from eliminating the waste this is directly related to fraud, automated inference processes and the creation of a new protocol to initiate blockchain into the marketplace. More money spent at a more efficient rate will produce better results. All of this will be a reckoning of the noisy bad actors.
Erich posed the question asking how long the industry is going to be passive to the fact that they are wasting half of what they are spending? There is a coalition of the willing who want to spend more money, more efficiently, but changes need to be made now in order for that to happen.

Who are the winners and losers through all of this?

All panelists jumped in to agree that the advertiser wins, the publisher wins, and the consumer wins. The biggest loser is the holding company, those writing the check that knows what is costs but don’t know why or how?

Where is the resistance coming from?

Erich was the first to jump in saying that there are agencies in the world whose business practices are suspect, which has nothing to do with blockchain. But, there is also a group of enlightened agencies, and with this group, there is hope that the conversation about blockchain enables empowered advertisers and agencies to make a better decision, have clarity in where value is created. Blockchain could disrupt how some agencies operate today.

Adam then asked if people are going to come together to make this happen? Obviously blockchain technology helps with transparency and fraud, but many people associate it with cryptocurrency, so does that mean that media will need to be paid for by cryptocurrency?

Dave explained that people often mix the technology of blockchain and cryptocurrency. Cryptocurrency can ride on top of blockchain and utilize it; there would not be blockcahin without cryptocurrency, but you don’t need cryptocurrency to validate it. Cryptocurrency can have nothing to do with the payments. He then used the example of lbry. Lbry is “free, open and community-run digital marketplace” built on the idea that people deserve free information. If a publisher is going to take upwards of 30% of the ad revenue, we should just let the people deal with each other. There is already iterative technology that is being built to take away the idea that you can make money from advertising.

Adam again went to the audience and someone asked how does someone go to P&G, for example, and ask them to use blockchain? From a security point of view, blockchain was built to be secure, but cryptocurrency has been hacked. So, how does one prove that blockchain is safe?

Erich took to answering this question by explaining that there are many insecure systems still in their infancy. We keep putting our own paradyme on how the industry should work, but, maybe there is a different paradigm that we have to play within.

Isaac added that blockchain itself has never been cracked, but people are trying to build so fast, people are leaving holes that can be cracked.

Adam brought up Brave Browser, started by Mozilla, which is a browser that lets people manage their identity and get paid for their personal data – a unique approach that questions who gets paid for what. He then asked if the panelists believed that people care enough to build something from the ground up?

Isaac’s opinion on this question was that if you have to ask consumers to install new browser, new marketing, new ways of “everything,” it doesn’t strike as the most optimal way forward for the industry. New protocol should enable those kinds of interaction. Everything should be built into the new enabling infrastructure or technology. He also added that we shouldn’t count out the traditional advertising people,
Erich believes that people do care. He brought up ad blocking and the poor advertising environment that consumers currently experience. The current answer to the ineffective environment is more volume, more poor advertising. 50% of advertising is fraud so the other 50% has to work harder, at a higher volume, with a lower cost. So, how do advertisers do it? What do they need? They don’t need  a new internet, but rather a well articulated process between the advertiser and the consumer. We need new technology that is reliable everyday with an optimized consumer experience.

The final question of the evening came from the audience. GDPR has unveiled a lot of questions with cost – companies have closed because they can’t afford the new costs. Could this prohibit companies from activating blockchain? Will small start-ups not be able to afford it?

Of course it costs money to reformat a business, stated Erich. However, he is weary that cost is not the sole reason companies left the market after GDPR. Effective deployment of the technology is at an infrastructure level. This would not require companies to create an entire new workflow.
The pipes of the internet are GDPR compliant, added Isaac, so it would be efficient to have smarter pipes that do the heavy lifting for us.
Adam concluded the panel, thanking the panelists for their time.

There is much to get excited about regarding blockchain. Although still at the beginning stages of development, adoption and acceptance, there is so much to be learned and gained from its adoption. A world that enables less fraud, more transparency and more brand safety is something to look forward to.
After more conversations and a delicious dessert, we were all pleasantly surprised by a spontaneous fireworks show over the water. Great discussion, delicious food and a beautiful view made for a spectacular Boston event. We want to thank our three amazing panelist once again for giving their unique and informative perspectives on this very relevant topic. We look forward to seeing you at one of our dinner panels in the near future.

Seattle Dinner, Drinks & Conversation About Programmatic Buzzwords: Transparency, GDPR, Attribution, Data Privacy and More

On Tuesday, June 5th, Digilant hosted a dinner panel in Seattle titled the “2018 Fast Track to an Integrated Digital Media & Marketing Strategy.” Digilant‘s Chief Executive Officer, Raquel Rosenthal, moderated a discussion on the evolution of digital marketing with the following local marketing and advertising professionals:

This is my summary of what was said and what I took away from the event and not word for word for how the speakers answered each question.

Raquel from Digilant kicked off the discussion with this first question.

What industry buzzwords or shifts do you think will impact digital marketing this year? For example: GDPR, Transparency, Attribution, In-housing or Blockchain.

David from Vulcan was the first to answer this question.  For him from all the buzzwords Blockchain is most likely to have a general impact on the advertising world and what we will probably talk about the most.  It fixes a trail of action and shows you how a fish gets caught before it gets to your plate. Transparency, attribution, GDPR, Blockchain will talk to all of that.  How we process the amount of data that we are creating will be huge. So Blockchain is my topic for the year because it will be huge.

GDPR to me, said Sharon from The Seattle Times, is like Y2K, a lot of build up and preparation especially in the media.  At the Seattle Times we talked to attorneys and thought it would be a bigger deal for us, but then all we really did is turn off retargeting in the EU. In the meantime, the panic of GDPR has made us all become consent monkeys.  AI (Artificial Intelligence) is one of the keywords I would pick, voice assistants are going to be a big deal.

Adam from Formative said that he is interested what GDPR will mean for the longer term.  What it will mean for advertisers who can’t retarget their visitors, paywalls cost more, publishers will make less money for premium inventory.  In the US we’ll get a couple of years to see how Europe deals with it before we do. Voice, Alexa and Google home, if we think how search has dominated the advertising space for such a long time and now voice interactions will be increasingly part of our lives, so it will be interesting to see what that will look like.

Transparency and in-housing are two big buzzwords we are reading about a lot in relation to programmatic media buying. But the reality is that most brands are not taking things totally in house but still relying on their agency partners.  Why is it such a buzzword then? Is it because of transparency? Why are people talking about it, but not really doing it?

David’s response was that there is an expertise related to the traditional way of doing things.  People are only bringing in some of it in-house because they don’t know how to do the execution part on a bigger scale.  Adam thinks that clients like to talk about bringing stuff in house like social and search but there is an expertise and value that comes from working across different clients that you don’t get from working in-house.  I personally came to appreciate what agencies can provide to their clients.

We haven’t talked about the customer experience yet, there used to be only 50 partner options in the ad-tech ecosystem and now there are 5000 so the customer experience is now really changing and Customer Experience Officer (CXO) is becoming a common job title.

I get the idea of a CXO started Adam, I get it, but it’s also what a CMO is responsible for.  The CXO is somewhat driven by Silicon Valley startups as an anti-marketing thing, that they don’t need to invest in marketing, and that their companies and products can be successful without spending money on marketing.  The need to focus on that overall experience, thinking about it holistically as a cross channel experience is a big shift. With the 5000 ad-tech partners there is no excuse not to present a better experience for the consumer.
Sharon’s answer was that customer experience is something we struggle with at the Seattle Times.  We sell advertising and subscriptions and have hundreds of ad calls. Advertisers are looking for a better experience for their consumers and to me It’s shameful that Google had to come up with ad standards with Chrome, all because publishers weren’t paying attention to the experience.

What about the silos of data? What are the consequences of these trends?

David was the first to respond by saying that he is having a very hard time with the amount of data we are getting.  It’s getting to the point where we can’t deal with the volume of data in a way that it will inform us in a nimble fashion.  We are not sure if we are pulling real insights from all these new great dashboards that are supposed to show us how to use our data, even if you stitch it all together, you have to know how to make great decisions from what you pull out of all the data.
Sharon said that they are trying to be very focused on what is driving that actual subscription. Their AI team is developing a subscriber influence score; they want to know what story or email they read before they subscribed. Building their own scoring system and own analytics so that they can answer one simple question: ‘what influenced that consumer to subscribe?’  According to Adam, nothing slowed the innovation of ad-tech more than Facebook because they don’t allow 3rd party ad tracking, something we could do before, but not anymore. GDPR is actually pushing us back rather than improving the user experience.

What do you think the impact of the announcement that Google just made, about no longer being able to export DoubleClick IDs, will have on targeting, performance and ​attribution?

David said that he thinks it’s going to affect all of those things. Google has been good at thinking of that end user experience because they have the data on that user and people will be forced to used their solutions because it’s most efficient and cost effective.  It’s more concerning for the advertiser but not for the end user.
Adam thinks that Google is trying to get ahead of the curve and make all the changes at once. People will start to complain about the crappy ads they get targeted with as it becomes more difficult for ad formats like native. Instead of being very specific to the user, contextually relevant ads will have to be more generic and not as targeted, because it’s going to hard to do much else.
For Sharon, from a news publisher’s perspective, they tend to trust Google more than Facebook for now and are taking the wait and see approach.

Are you or companies you work with investing in marketing attribution platforms and strategies and why yes or not?

David said that they are not investing in it at this point.  For right now they are not very interested in how the consumers converted but getting the conversions. They aren’t investing enough dollars to make the investment in an attribution solution.
Adam also said that they are not spending the ad dollars at the level they used to, so attribution has not been that important for them right now.  Attribution a bit passé, they’ve been hearing about for a long time and now walled gardens are making it more difficult. What’s going to become important for them is attribution between online to offline, people have smart TV’s that have data, real attribution will be really important when online and offline are not blurred and the consumers get a real experience.

Do you think that brands are going to continue to invest in social advertising or will they be more hesitant based on Facebook’s recent data privacy news or YouTube’s brand safety challenges?

There has been no pullback from social at all, even during the Zuckerberg trial, answered Sharon.  So yes, she thinks people will continue to invest in social. David said that when social platforms first launched they brought together people that weren’t able to connect. Facebook, Twitter, Snapchat, are all free and nothing in America is free. People are going to remember that, so how do we keep it free, the benefits for the consumers will outweigh the data privacy issues. Adam thinks that eventually the pressure for data privacy will decrease as brands get more slack for data breaches. Facebook made a bunch of unrelated changes to their platform after their data scandal and people seemed ok with that.

What new digital ad formats or platforms have you tried over the last year?

David said that they have been talking a lot about podcasting, they are starting to dip into the programmatic area. People are passionate about podcasts and it would be efficient because we can narrow down the targeting to exactly who we want to reach.  Voice will be fantastic and huge especially combined with Amazon and Google e-commerce offerings, because they have so much data the ads will be even more effective.
Sharon said that this year they tried a couple new things, one of which was headline ads and was a huge failure.  Now they are trying to do more with native. For them the way they decide what to do is a little different than on the publisher side. If they try something new or develop something new it has to be profitable for the business. But if she was on the other side she thinks that she would definitely try something like podcasts.
Adam echoes the podcasts, but also SMS and messenger, because it feels like a one-on-one connection with consumers, more like a conversation and specific answers for their situation.

Again, thank you to our wonderful panelists.  We look forward to our next event in Boston, June 12th.  If you are interested in attending please reach out to us here: info@digilant.com.

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