Mediaocean, an ad services and software company, and IBM have announced the launch of a blockchain consortium for ad-buying blockchain solutions. Other members include Kellogg, Kimberly-Clark, Pfizer, Unilever and IBM Watson Advertising.
The consortium will use blockchain to solve the major problem of the industry: middlemen.
Currently, middlemen plague the ad-buying scene, driving up costs for buyers and reducing income for sellers. It’s not a matter of one middleman. There are several layers of technology providers and agencies.
One ad-buying blockchain project estimated that intermediaries can potentially take up to 60% of the money spent on ad-buying. Back in 2014, the Internet Advertising Bureau gave a figure of 50% plus. Some even refer to it as the digital tax.
But that’s not all, these middlemen make the digital media supply chain opaque, meaning buyers cannot see exactly where and to whom their money is going. In short, it is difficult for buyers to actually know how much of their spending is going toward productive advertisement.
Here blockchain technology can help. Because blockchains immutably record all transactions made, participants could view each step of the way, from order to execution, with trust and see where their ads are going and who gets what.
“By partnering with IBM, we’re able to launch the first advertising blockchain solution that will improve spend transparency – at scale. This will help us come together as an industry under a single source of truth and rebuild trust to push us into a new era of advertising transformation,” says Bill Wise, the CEO of Mediaocean.
The solution will be built on top of Mediaocean’s existing platform which already processes over $140 billion in ad spend. The CEO estimates that 50% of all ad spend goes through their systems.
The programme will launch in July.
Babs Rangaiah, Executive Partner, Global Marketing, IBM iX says “[Blockchain] will bring tremendous benefits to media buying, especially with industry leaders like Mediaocean leading the charge.”
Initially, during the build phase, Mediaocean used the IBM Blockchain Platform Starter Plan, which helps firms design and build Proof of Concepts and testnets.
Other advertising blockchains
There are several advertising blockchain initiatives, but this is the first to include significant advertisers at an early stage.
According to AdAge in 2017 personal care and household products was the second largest ad segment after automotive. It makes up 18% of the spend of the top 100 advertisers.
The other consortia include industry players some of whom are middlemen. Hence it makes sense for the ultimate buyers to form an alliance to protect their interests.
The AdLedger consortium also includes IBM as a partner, and their members are primarily publishers, ad agencies, and adtech companies. In fact, Mediaocean is also part of AdLedger.
There are two video advertising projects. Firstly, Premion/Madhive are partnering, both of whom are AdLedger founding members. Secondly, Freewheel (formerly Comcast Advanced Advertising) is working on a project named BlockGraphTM.
But what none of the consortia mention directly are the giants that take the biggest slice of digital ad spend. Google and Facebook.