Internet video advertising is a growing sector as the TV audience continues to migrate to internet-enabled devices, referred to as OTT (Over-the-Top) by the industry. Blockchain is making inroads because the growing sector is ripe for new ad management systems. Premium OTT video accounts for only 10% of all ad inventory, but commands 40% of all ad spend.
These devices are capable of streaming video. They include Smart TVs, gaming devices (eg. Xbox One and Playstation), smart set-top boxes (eg. Roku, Apple TV), computers, tablets and smartphones.
Many of these media are cookie-less which makes tracking harder, and is one of the reasons why OTT is a target for blockchain.
A recent Internet Advertising Bureau (IAB) whitepaper assessed the pros and cons of blockchain for the segment. The lower volumes of video compared to other advertising classes makes it better suited until blockchain technologies have improved scalability. Plus there are fewer suppliers which makes cooperation easier. And those suppliers are wary of using middle-men.
Adam Moser, Head of Ad Operations at Hulu said: “My hunch is that you are going to see blockchain flow out from PC and mobile first before you will see it kick off in OTT. For the OTT space, there are a lot of nuances in terms of how you integrate specific technology into devices like streaming sticks and connected-TVs.”
There are multiple solutions already targeting the segment.
Premion / Madhive
Premion, the OTT advertising platform has partnered with Madhive to work on a blockchain solution. The first phase is focusing on the backend, to reduce fraud and costs. Fraud and invalid traffic from bots waste 20% of ad spending.
They aim to reduce manual reporting and reconciliation and improve the reporting accuracy of ad serving.
Premion and Madhive are also founding members of the ad tech industry alliance, AdLedger which is not limited to video.
Freewheel (formerly Comcast Advanced Advertising)
Freewheel is working on a project named BlockGraphTM. It’s an ad tech platform for planning, targeting and reporting. Ad buys can span across digital, broadcast, and streaming while also allowing marketers to anonymously match data with other industry players for analysis and targeting without relinquishing proprietary customer information.
Both stress privacy on their platforms. Jonathan Heller, Chief Product Officer, FreeWheel explains: “The whole point of the distributed database is that the industry needs a way of not exposing, moving, or handing over their proprietary datasets, yet still somehow being able to pull insights across many datasets in a way that’s safe for the consumer and the industry participants.”
The IAB report envisages 2018 being devoted to pilot projects with 2019 seeing projects going live. They also acknowledged the challenges that lie ahead. The first is standardizing data formats. But the crucial issue is speed. Currently, blockchains are notoriously slow with transaction speeds of minutes where digital advertising requires milliseconds.
Then, there must be a clear economic incentive for players to move from existing systems onto blockchain. Adequate identity management is needed so that marketers can connect with consumers across platforms. Finally, there are privacy, legal and regulatory issues, or as the IAB called it ‘the Wild West’.