Blockchain is no panacea for transparency in media trading…yet
The flurry of excitement around Amazon’s search for Blockchain-savvy software developers should be taken with a pinch of salt, writes Federica Bowman
Amazon is now the world’s third largest advertising platform, snapping at the heels of Facebook and Alphabet’s Google and YouTube. So, when Amazon so much as twitches, the marketing world sits up and takes notice. Earlier this month, the apparently innocuous announcement that the company is looking for software developers with Blockchain experience to join its Advertising FinTech team made global news. The new team based in the Boulder, Colorado, will focus on “billing and reconciliation systems to provide transparency on transnational financial data.” Here’s the recruitment ad on LinkedIn.
At first glance, using a Blockchain to drive transparency into the overly-complex media and marketing ecosystem makes good sense, particularly with the ever-increasing number of intermediaries between advertisers and publishers. Smart ledgers – and the opportunity to enshrine transparency-by-design into every transaction, every step of the way – are the kinds of solution that marketers have been crying out for ever since the 2016 ANA report and Marc Pritchard’s 2017 ANA and IAB keynote speeches. In theory at least, a Blockchain represents a way of working with the potential to change media trading for the better. It could do this by reducing friction, automating trust, and redefining relationships.
But as ever with stories about Blockchain and its potential to save the ad industry, the latest flurry of excitement about Amazon’s search for Blockchain-savvy software developers should be taken with a pinch of salt. Important as the company’s size and status is as a vendor of media inventory, Amazon owns the advertising delivery mechanism and so it has more control over where ads appear, similar to Google’s AdSense. The transactional chain between advertisers and consumers is shorter and simpler, and so the opportunity for significant savings on inventory sold by Amazon is relatively small. This is particularly true for ads on Amazon’s own site and its own devices, including Kindle and Alexa.
What’s more, it’s too simplistic to think that the monies saved by reconciling inventory delivery within Amazon will contribute to significant savings for either Amazon or those advertisers using its platform. A Blockchain can help to clear up the supply chain by identifying where cents fall through the cracks. Used in conjunction with ad-fraud measurement technologies, it can help ensure that advertisers are not paying for ads served fraudulently.
The challenge is that the media ecosystem faces a much broader set of issues than the short supply chain inside Amazon’s walled garden. By far the most significant issues of transparency in media trading relate to deals that are often negotiated ‘off book’ and are not tied to specific inventory purchases. These include service-level agreements, free space, added value, inventory media, and other non-media related benefits.
As all of these, very significant transactions would by their very nature be inaccessible to a Blockchain and its open ledger systems and technology, there is no way that it could hope to drive transparency into these transactions. And it’s here that advertisers need to be most vigilant and work with their agency and tech partners to ensure they have the levels of transparency – often up to 100% transparency on all trades – that they desire.
Of course it’s understandable that the marketing trade press and the advertising industry were so interested to learn about Amazon’s imminent deployment of Blockchain experts in their FinTech ad team. But in the end it turns out to have been a fuss about nothing – or at least very little. Driving transparency across the media and marketing ecosystem is more complex and involved than cleaning up transactions within one walled garden platform, however big they’ve become. How a Blockchain could do this for ‘off book’ transactions remains to be seen.
Federica Bowman is managing director – digital at FirmDecisions