By: Ayla Quinn
Industry Index’ recent Roundtable, “The Blockchain Revolution: Understanding Blockchain's impact and applications for MadTech,” set out to find the roadmap between blockchain buzzword and widespread blockchain adoption.
The room, packed… texplanations, out of the way. The opening salvo was delivered by Lou Severine, CEO of NYIAX: “If your your platform doesn’t have an immutable ledger - you’re not going to last in this ecosystem.”
Why? Our Roundtable participants: Lou Severine - CEO of NYIAX, Dave Strauss - Director of Revenue Operations at Hearst Digital Media, Manny Puentes - CEO of Rebel AI, Ivan Guzenko - CEO of SmartyAds, Kyle Csik - Managing Partner at GroupM, Bob Walczak Strategic Advisor and Consultant, Tom Bollich - CTO of MadHive, Ed Zabar - CEO of Verif-y, Andre De Castro - CEO of Blockchain of Things, framed this with a little more depth and candor.
Dave Strauss, Director of Revenue Operations at Hearst Digital Media, stated that there are a number of problems in adTech regarding transparency. “We want to solve fraud, we want to solve spoofing… get some transparency into the ecosystem and [gain] an understanding of how much money is being taken out in the middle.”
Simply, many are seeing an opportunity to use blockchain to create an open market. “We have to strive to take programmatic and use it to facilitate media trading without human intervention – and you want to be able to trade media with security,” Manny Puentes, CEO of Rebel AI, added.
What often is labeled as the results of fraud, (i.e., “bad actors”) are actually the results of human error. Considering that, if projections prove accurate, digital will capture 50% ($129b) of all ad spends, unmitigated human error (i.e., “fat fingers”) will be responsible for an increasing number of errors. Error does not equal fraud in these instances. More robots = fewer errors. Though, there is plenty of actual fraud.
Ads.txt is billed as a fix, but many see it as a temporary, and incomplete, solution. Ivan Guzenko, CEO of SmartyAds, stated, “…People think that ads.txt will help them, but ads.txt is introducing different types of fraud.”
“That’s why you have to hold your exchanges accountable,” Kyle Csik, Managing Partner at GroupM, interjected. If there is any fraudulent activity happening — the exchange has to be shut off, immediately.”
A Group Effort
Meeting these challenges may be possible, but there needs to be an industry-wide initiative. Severine offered, “If we don’t work together as a group – and if we don’t collaborate as a group – our industry is going to go down hard, because fraud will take over. Black boxes will take over. We need transparency, we need collaboration, and we need adoption.”
Without an industry-wide shift to blockchain technology, Strauss explained that, “If you have one point of failure, you are more or less a system that won’t work — and there are a lot of players involved.”
Where does this group effort start?
“I think a part of this is building out that ecosystem, determining who will be the verifiers and what are the peer-to-peer transactions happening between two trusted counter-parties,” Bob Walczak, Strategic Advisor and Consultant added, “That to me is what’s not built out in the ecosystem right now. There are no market leaders, and not enough scale to determine what’s going to work yet.”
A Practical Education
Google “blockchain” and you’ll get videos, infographics, long-winded, dry explanations… even clever, “explain blockchain to your grandma” blog posts. Yes, there’s a glut of general explanations, but far less MadTech-focused practical information.
Guzenko stated, “Education is the one main barriers to blockchain adoption, because people don’t understand how blockchain works – and they should, because otherwise it will [only] be a big promise.”
In short, buzzwords are one thing, action something entirely different.
Csik addressed the force that NYIAX interjects into the space. “Your company terrifies me,” Csik said (to Severine.) Severine laughed and rejoined, remarking, “And why is that?” Csik continued, “[NYIAX] introduces a tectonic shift of how we purchase media because of the ability to create speculation marketing.”
Closing the Gap
Puentes offered a clear position, stating, “Blockchain is going to revolutionize and change the way we trade media today, period. And, if it’s not today, it’s going to be tomorrow. If you’re not ready for it, you’re going to be hurting.”
But are we ready for it… industry-wide?
Tom Bollich, CTO at MadHive, addressed the need for speed. “There are a lot of speed weaknesses… The next six months [of early-adopters working on the tech] will increase [speed] by a magnitude or greater.” Within a year, he predicts, blockchain adoption will usher in an era where perhaps transactional speed will no longer be a negative factor.
Puentes added, “In a year, I think we will have the foundation to give people their public and private key – let’s start there.” Then the public and private key tech companies can start encrypting transactions.
Linking the Chains
“I think that the public/private space is a huge issue just because it’s so technical in nature these days,” Ed Zabar, CEO of Verif-y said. “If that is all solved and there is an electronic way to transact public feeds and private keys that is seamless and UI friendly, that will take this whole thing to a higher level of implementation.”
“There are three sets of chains: public, consortium, and private,” Bollich explained (read up on that here). He continued, “You do have the ability to move the data between the chains. I can take all the hashes within the last ten minutes from a private chain, and write that hash to a public blockchain. That private blockchain is immutable now. So, even though I can’t see it, I know for a fact that if I have to audit it, I can.”
There are still a number of questions without answers. Is blockchain technology just another new tool, temporarily dulling the pain of an existing problem, rather than a cure? Is blockchain overkill for accountability? And, as moderator Jonathon Shaevitz, President of Industry Index, posed, could blockchain be a threat to the current ecosystem?
Severine elaborated, “If you look at some of the large brands that are out there today, every conference that we have been at this year, the brands are talking about transparency, fraud… and where are the dollars going?”
Csik presented the agency perspective, “The agency enforces on exchanges what the exchanges enforce with publishers.”
This is the next face of the internet,” Bollich firmly stated. “TCP/IP was the first, then the WWW [HTTP], which is almost what every company runs on now, and blockchain is the next. This is true cloud computing.”
Puentes agreed, “Why is there a transparency problem? There is no accounting in HTTP.”
Walczak made the point that the industry also has to look at startups that are building their companies with blockchain at the forefront. “I don’t think those companies that are already existing, those large players right now will augment their business.”
“The decentralized model is also that application towards transparency — which is knowing your counter-party. That’s the one thing that [MadTech] lacks: even in a fully transparent model, most companies still don’t know their counter-parties… that peer to peer nature. That’s the shift companies all have to evolve to.”
He added, “I agree that this is going to be the next internet. But, how do you make that shift?”
To build, or to buy, the tech… that’s the question.
Rob Norman, the outspoken global chief digital officer of GroupM, is leaving his full-time role at WPP's media investment group after more than three decades at the company.
Norman, who had been CEO of GroupM North America before he took over the new chief digital officer role in 2012, will remain an advisor to GroupM and clients with a "reduced workload that allows him more time to pursue personal interests," GroupM said in a statement. He will leave the full-time role effective January 2018.
Media is a tough business with its share of difficult moments, Norman tells Ad Age, and some keep at it because they have "unbound brilliance" or "unbound determination."