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Yesterday at the CES show in Las Vegas, Mediaocean revealed that its blockchain developed with IBM is currently live. Almost two dozen brands, agencies and technology partners are actively involved. The partnership was announced for the first time in June 2018, with Kellogg, Kimberly-Clark, Pfizer and Unilever as the first major brands to register.
Mediaocean operates one of the leading advertising software platforms that feeds $ 140 billion of advertising spending annually.
So far, the blockchain system records transactions such as budgets, authorizations, orders, checks, invoices and payments. Soon participants will be able to monitor transactions on the blockchain including a consolidated audit journal.
Pain points
Although one might think that digital advertising would make transparency easier than buying traditional media, this is not the case. In addition to the agencies themselves, other intermediaries such as adtech platforms and inventory aggregators sit between agencies and publishers. Some estimate that all intermediaries take 50-60% of advertising spending. Not only is it expensive, but it is difficult to control with so many levels.
A report from McKinsey last year underlines concerns about media reimbursements. Agencies often receive volume bonuses or discounts from publishers and media companies. Generally these refunds are not returned to the advertiser. And the figures are notable for digital advertising at 20-35 percent.
This non-granting of discounts was discovered by the National Advertiser Association (ANA) in 2016. The ANA found a disconnection between the advertiser and the agency. "Advertisers have expressed the belief that their agencies had a duty to act in their best interest." Meanwhile, many agency executives surveyed said that their relationship with advertisers was defined solely by the contract between the two parties. "
Blockchain follows the contracts
If agencies believe that contracts are all that matters, enabling complete transparency across all the different parts will help advertisers see what's going on.
The key is to be able to reconcile purchase orders with invoices and invoices with delivery. Blockchain can make it happen. Mediaocean believes that the blockchain has a role in the two different phases: registration agreements between advertiser and agency and between agency and supplier.
From the last announcement of Mediaocean it seems that the starting point of the blockchain has been between advertiser and agency. In theory it is the easiest part. Getting all the suppliers on board could prove to be more difficult. After all, the advertiser's goal is to maximize spending on publishers which, by definition, will mean squeezing intermediaries. On the other hand, if adtech suppliers and aggregators do not know, competitors willing to blockchain could challenge them.
In a recent blog post, Mediaocean outlined how blockchains are transaction oriented while the media industry uses contracts. So to a certain extent, the blockchain treats campaigns and invoices as goods traded. Smart contracts can guarantee that every transaction respects the terms and conditions.
The Mediaocean blockchain uses Hyperledger Fabric the authorized business blockchain that only allows authorized participants to view their relevant transactions.
competition
The Mediaocean blockchain platform differed from the larger brands. Several other technology companies are working with blockchain. For example, the AdLedger consortium and the Interactive Advertising Bureau (IAB) both have blockchain initiatives. Comcast is working on a television audience platform as are others in the video space. Some brands have already tested blockchain advertising platforms including Toyota and Budweiser, owner AB InBev.
