Ad holding companies ramp up support for blockchain

Dive Brief:

Dentsu Aegis Network's digital performance agency iProspect, along with S4M, Futurs.io, Smart and Mondadori MediaConnect are launching the Adschain Consortium to apply blockchain technology to address ad fraud in programmatic buying by increasing transparency, according to a news release provided to Marketing Dive.
As part of the consortium, advertisers can declare a list of authorized buyers and publishers can send a list of authorized sellers, who can "automate reference" to validate their legitimacy before any transaction. Supply-side and demand-side platforms have access to the same information to eliminate unauthorized sellers or buyers in the programmatic supply chain. The distributed ledger process will be based on Ethereum to provide more transparency, trust, security and traceability to the full supply chain.
In other news, IPG, Publicis Groupe, Omnicom and GroupM are partnering on the launch of a blockchain working group with AdLedger, and the group just released its first report, "Blockchain & Advertising Special Report," with input from Coindesk, IBM and MAD Network, per a news release provided to Marketing Dive. According to the report, 50.7% of marketers say the domination of the digital duopoly of Facebook and Google is the biggest problem in digital advertising, followed by transparency at 24%, brand safety at 13% and fraud at 11.6%.

Dive Insight:

By working to improve the digital supply chain through the use of blockchain tech, agencies hope to improve relationships with brands and boost their standing in digital advertising. Eighty four percent of multinational brands see agencies as struggling with technology, and 74% are reviewing their current agency arrangements, according to research from the World Federation of Advertisers.

Ad holding groups, under pressure on a number of fronts, are wagering blockchain tech can improve the programmatic supply chain, create industry standards, address issues of transparency and increase security. Ad fraud is estimated to cost publishers $1.27 billion annually, according to a study by 16 programmatic publishers, released last year. Unless something is done to address fraud, the problem could grow even larger as more media buying shifts to programmatic solutions. By 2019, nearly two-thirds of all digital display ads are projected to be programmatic, reaching an estimated $84.9 billion, according to Publicis Groupe Zenith estimates released last year.

The research released by the ad holding groups suggests blockchain could also impact the advertising industry by helping agencies better compete against the Google, Facebook duopoly. The research shows that marketers see blockchain as a way to reduce their reliance on Google and Facebook. The duopoly will control a combined 57.7% of U.S. digital ad revenue this year, down slightly from 59.1% last year, according to eMarketer forecasts.

According to the "Blockchain & Advertising Special Report," 31.3% of marketers think blockchain has the ability to solve the industry's problems, while 37.7% say maybe and 13.4% say no. Just over 50% think blockchain will reduce the number of intermediaries in the supply chain, with 34.8% saying maybe. More than a third, or 39.4%, agree and 32.4% strongly agree that blockchain is the future of advertising.