It’s time to standardize the adtech industry.
That, essentially, is the general takeaway from a new study conducted by research firm Industry Index, and commissioned by AdLedger and MadHive, called “Next-Generation Solutions for Ad Tech” (free, registration required). It is based on a qualitative survey of a hundred each of brand marketers, digital agencies, and digital publishers.
AdLedger is a consortium of ad agencies, brands, publishers, and tech providers set up to build rules and standards for the application of blockchain and blockchain-related cryptography to advertising, while adtech firm MadHive utilizes blockchain, AI, and cryptography to create new adtech solutions.
‘Is Blockchain the most promising option?’
92% of survey respondents said there was a need for some kind of tech standardization. Only 6% said they were satisfied with the current system, while 14% saw the need for a complete change. 80% are described as “OK [with the system] as is, but could benefit with new technologies.”
As for the kind of new technology, 73% of survey respondents said that blockchain “is a viable technology to create industry-wide standardization.”
Here are two graphs from the study, addressing the evolution of “Mad Tech” (marketing, ad, and related data and tech).
The report found that 83% of respondents “believe blockchain can be used to create transparencies and efficiencies.” Luke Mulks, Director of Business Development at browser provider Brave, is one of the respondents cited in the report as favoring industry-wide standardization. He described blockchain as “the most promising option.”
Standardization and new technology, he added, could resolve “a lot of the problems that we have not been able to self-regulate. It would lead to a better ecosystem with more transparency, a verifiable record to combat fraud, help people have more control over their privacy, and provide more accountability through verified transactions.”
Blockchain is a peer-to-peer network that can act as a shared spreadsheet or ledger, available and maintained simultaneously across zillions of computers. Every new block of data is added through different kinds of user consensus, which means that it is highly verifiable and very difficult to change without widespread consent.
As a result, transactions recorded to blockchain are highly transparent, stable, and secure. Additionally, blockchain-based “smart contracts” can allow an event to occur—say, as a payout—when a verifiable condition is met, such as an ad being displayed. This lets blockchains support a variety of automated transactions.
But there are drawbacks. Blockchain-based processing can be much slower than other computational processes, although there are new protocols to help speed that up. Integration with existing platforms is still a work in process, and, as the countless fiascos involving bitcoin exchanges have shown (since bitcoin is blockchain-based), there are many ways in which blockchains fail.
While blockchain went through a cycle of highly inflated hype and then a current period of more realistic expectations, 52% now characterize the technology’s impact as moderate, while another 30% said it would have a larger “sizable” impact.
Blockchain might provide support “in a fundamental way,” Mulks said, but “there aren’t enough people on the blockchain and it’s not able to handle enough people.”
The report acknowledged that “there is no panacea” for the ad industry, but it noted that an overwhelming majority of survey respondents saw blockchain as having “high levels of efficacy” for transparency (71%), data verification (71%), fraud (70%), data sharing (69%) and audience verification (69%).
‘A long-term outlook’
Additional areas where respondents felt blockchain in theory could provide improvements included fraud (cited by 66%) and tracking results (66%).
But, if the respondents’ opinions are indicative of the broader community, most are pessimistic that blockchain will have a major impact immediately.
38% of those surveyed said it would take at least one to two years to successfully integrate blockchain-based solutions, while 34% thought it would be closer to three to five years. A more optimistic 17% said the integration would take place within a year, while a more pessimistic 10% expect it to take more than five years.
See full report: adledger.org