Blockchain has passed through the wild ride of the early hype cycle, and its advocates are readying for a more mature period of implementation.
The IAB Tech Lab Blockchain Working Group on Thursday published its first guidelines for implementing blockchain tech in digital advertising.
Hilary Chapman-Roberts, a GroupM product marketing manager and co-chair of Tech Lab working group, said the blockchain guidelines are meant to “foster a test and learn philosophy” so stakeholders across the ecosystem could evaluate blockchain tech for specific parts of their media buys.
Blockchain tech’s most exciting potential is around data privacy and compliance, she said, but marketers and publishers must first understand the practical applications of the technology.
The IAB Tech Lab’s OpenRTB working group oversees programmatic ecosystem standards. And that group wouldn’t seize on ambitious blockchain technology initiatives because it manages tangible changes affecting digital media buys, said Miguel Morales, CTO and co-founder of the blockchain ad tech company Lucidity, who’s a member of both the openRTB and blockchain groups.
But with these guidelines, the openRTB group can take more concrete actions with blockchain tech.
Smart contracts, for example, determine actions on a blockchain. An exchange of bitcoin, for instance, must be certified on the ledgers of every bitcoin participant in the world. A digital media transaction operating on blockchain would require contractual certifications by every link in the media supply chain. That’s a difficult conversation for a blockchain provider to have with every publisher, advertiser and ad tech company.
The blockchain guidelines help tech vendors talk about what their solutions do, instead of muddling through discussions of blockchain technology, Morales said. It’s much easier to pitch smart contracts as a plug-and-play integration that brings log file transparency to DSPs and marketers.
The IAB Tech Lab’s Blockchain Working Group is also piggybacking on the adoption of related IAB Tech Lab initiatives, like ads.cert and sellers.json, that use cryptographic technology to certify ad inventory.
The new blockchain guidelines lay out how ads.cert integrates with the supply-side equivalent, sellers.json, so a single ledger can track each impression from the publisher with every dollar from the demand side. Without the whole supply chain plugged into those programs, it’s impractical to implement blockchain solutions.
Despite using similar technologies, IAB Tech Lab has avoided the term “blockchain” because the technology has a bad rap due to its associations with cryptocurrenciesm scam startups and failed businesses, said Richard Bush, president of the blockchain-based advertising marketplace NYIAX and co-chair of the Tech Lab working group.
“It can be a bit tough being the Blockchain Working Group,” Bush said. “We talk about sub-groups within the technology, like smart contracts and distributed ledgers, as opposed to saying ‘blockchain.’”
But the Blockchain Working Group sees a chance to prove the technology by targeting low-hanging fruit, like transparency and campaign reconciliation.
The blockchain guidelines examine the use cases for any company in the advertising supply chain. But brands are, unsurprisingly, the key for catalyzing change.
The Tech Lab working group features three agency holding companies, media companies like ESPN and Pandora and every kind of vendor in between: But zero brands.
The ad tech opportunity is expanding, though, because many big brands have tested or implemented blockchains for other parts of their business, Bush said, like Walmart shuffling CPG and grocery suppliers onto its blockchain project to track its fruit, produce and food quality.
In the digital media world, the challenge for blockchain tech is that it must upend a system with a lot of momentum, he said. “So the question is, ‘Where is the value in starting with something new?’”