Home Analysis Advertising GroupM report outlines implementation roadmap for blockchain in advertising

GroupM report outlines implementation roadmap for blockchain in advertising

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Today, more than half of information resides outside our own corporations or ownership, but in future external databases will comprise nearly two-thirds. A distributed database will alleviate the need for one central authority to manage or control information, creating a ‘trustless’ information value chain. But this requires that distributed ledger technology (DLT) provides the cryptography and consensus to build trust and transparency, and the authenticity and authorisations needed.

This is some of the context that GroupM provides for why multiple industries, including the marketing/advertising sector, are so interested in DLT and its sub-set blockchain. In its recent report, ‘Blockchain & Marketing – Technology Design Considerations for Implementation’, the company says DLT is likely to become the backbone for the transaction layer of the Internet, or the ‘Internet of Value’. “Cryptographic keys across distributed ledgers supports users in securing and formalising digital relationships”, report author Jack Smith, Chief Product Officer, Investment at GroupM, writes.

Two promising areas of DLT are the management of digital identities and providing supply chain transparency. DLT should be able to provide a cryptographically assured trust mechanism for distributed identity management, data permissions and distributed consent management, the report notes. In the marketing industry, software applications are being built to streamline the layers of what GroupM calls overcrowded technology stacks that will impact advertising dollars.

GroupM, which is the world’s largest media investment company, is actively encouraging its clients to test-and-learn with DLT and prepare for its use. The agency group says it will partner them on that journey. The company is also exploring a fully-fledged blockchain pilot with a next-generation, high-throughput blockchain platform across multiple application areas, starting with smart contracting, billing and reconciliation.

GroupM sees potential for DLT in the programmatic space. It says the programmatic ecosystem is increasingly complex, making it even harder to build trust among advertisers, agencies, consumers and publishers. “Solutions, to date, have merely been expensive Band-Aids [small plasters] and not full answers to the fundamental challenge: helping marketers follow their data and dollars across the consumer journey.

“Authentication and authorisation are now critical to advertising because of privacy-focused laws and regulations like the European Union’s General Data Protection Regulation (GDPR). And, growing cost pressures in the CPG [consumer packaged goods] industry and beyond have given rise to new questions about working versus non-working media.

“Technology and data costs are being closely scrutinised. Demands for greater efficiency are evergreen in advertising, but the volume is intensifying. DLT is seen as a possible solution.”

GroupM says there is friction in the marketing/advertising system, particularly as it relates to identity management, data monetisation and capturing consumer consent for use of their data. “DLT may potentially reduce this friction if implemented effectively.”

The report lists some of the decentralised applications, built on blockchain platforms, that are relevant to the marketing industry and which are currently being piloted. These cover:

1/ Entity-level reconciliation. This includes streamlining processes across multiple entities in the programmatic value chain to capture efficiencies. It also includes increasing record transparency and ease of auditability in the ad-tech ecosystem via smart contracting.

2/ Impression-level optimisation. This covers building a secure value transfer system from ad dollars to impressions to sale, through better audience planning. It also involves utilising a democratically governed mechanism to codify measurement standards for better campaign management and optimisation.

3/ Data and identity management. This includes understanding that GDPR and related privacy concerns are making data security even more important through better identity management. It also looks at reducing the need for trust among value chain stakeholders, and between the advertiser and the consumer for authentic content.

 

The GroupM report warns about DLT/blockchain related hype, or thinking that everyone needs it. “Among those who understand it, the technology is considered a useful and powerful mechanism for processing transactions in a trustless, decentralised environment. However, the cost, performance and complexity have yet to be assessed and may vary on a case-by-case basis.

“In many cases, it is expected that claimed savings will come from the digitisation of legacy and inefficient processes, not necessarily from the adoption of DLT. Not all business situations require a blockchain/DLT-led solution. Often, a simple or distributed database-led solution is more than enough.”

The report adds: “By 2020, all major corporations are anticipated to deploy consultants in examination of DLT projects for cost cutting. However, for every dollar spent on DLT, another $20 will be spent on the ‘transformation’ element of these projects.”

GroupM has developed checks to help clients navigate the landscape, including whether a distributed ledger technology solution is really needed. The report offers more detail and it also outlines five critical steps that should be performed in sequence to derive maximum benefit from DLT adoption. These are:

1/ Get the data strategy right in the first place. “In the emerging world of Web 3.0, where each one of us will probably have only 30% of our information with us and the remaining 70% scattered around the Web, it is important to understand the distributed nature of our information. This includes the nature of ownership, consent and permissions.”

2/ Move from a distributed database to a distributed ledger.

3/ Understand the world of cryptography. Report author Smith warns that we will soon learn more about cryptojacking – where data is stolen, destroyed or mutated for individual benefit. GroupM thinks we need to find the right cryptographic technology for the marketing/media sectors  – “one that is common to all, protected and constantly upgraded across the industry”.

4/ Incentivise consensus protocol. “We need to align on the consensus protocol that is best suited for our industry,” the report confirms.

5/ Decide if all of this is public or permissioned. “DLT addresses many of our industry’s challenges across reconciliation, identity and campaign management,” the report states. “How can a permissioned blockchain address this, or should it? There are still debates as to whether it should be a private permissioned network like the financial institutions, or a public permissionless network.”

 

The report contains a warning for anyone who thinks DLT/blockchain can eradicate advertising fraud. “While DLT is perceived as viable for providing authenticity and authorisation, its mere application will not mean that fraud will vanish entirely.

“If an ad impression is delivered on a fraudulent site by a legitimate ad server and written to a blockchain record, that record may not be tampered with. Other data feeds (oracles) will be required to identify that the original impression was invalid, similar to the way third-party verification providers are used today. Our industry is still coming to terms with these challenges.”

The 18-page report can be downloaded here. It clarifies the ongoing dialogue about blockchain and how it can be leveraged by marketers. It takes a deep dive into the technology, discussing how some marketers are already using it successfully, as well as outlining how organisations can begin to implement blockchain to improve current processes and ensure future success.


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