Earlier this year, research and development consortium AdLedger teamed up with IBM and Salon Media Group to educate marketers about blockchain. Surveying 100 senior advertising executives for a new whitepaper, the group realized it had its work cut out for it.
When asked if they can confidently explain the difference between blockchain and cryptocurrency, 67.6% of respondents said “yes.” Interestingly, an equal number answered “no” and “maybe,” meaning that plenty of marketers aren’t even sure how well they understand blockchain.
“We want to get to a point where we’re no longer spending the first 25 minutes of a 30-minute meeting explaining how blockchain is different from Bitcoin,” says Christiana Cacciapuoti, AdLedger’s Executive Director. “It’s an underlying technology that the average consumer isn’t going to see or touch. The comparison I make is, you may not know why your credit card information is safe, but you know it is safe if you see that green lock.”
“This is dot-com explosion big”
AdLedger isn’t even a year old and this whitepaper is the group’s first output, which Cacciapuoti sees as step one of the education initiative. It’s noteworthy that partners include IBM, in addition to Omnicom Media Group, Publicis Media Group, IPG Reprise Digital and GroupM: four competitors that each represent a different one of the world’s largest advertising holding companies.
These agencies’ involvement establishes them early authorities. That can ultimately help them as blockchain becomes more prominent, as they face increased competition from consultancies; brands taking their advertising in-house; tech giants such as Google, Facebook and now, Amazon; and of course, each other. Ford was WPP’s largest global client for decades and recently named BBDO its new lead creative agency.
With 20 years of technology public relations under his belt, Jay Kolbe, EVP of Emerging Technologies at Clarity PR and host of a podcast called Blockchain Bridge, has seen countless “next big things.” In his opinion, for these competing agencies to unite shows that blockchain is far more than just a flash in the pan.
“This is dot-com explosion big, the kind you see maybe once or twice in a generation,” he says.
What’s impeding investment
In August, Deloitte surveyed more than 1,000 senior executives from various industries and countries about their blockchain investments. For 20% of them, the fact that the technology is unproven is the greatest barrier to investment; 28% cited a lack of in-house skills and understanding.
While Kolbe believes strongly in blockchain’s potential to transform the industry, he understands many marketers’ reticence to embrace the technology. He compares current attitudes toward blockchain to the initial ad-tech boom.
“How many people were out there selling vaporware and creating DSPs, and racing out to say the same things?” he asks. “There are moments of exuberance and then it gets hyperbolic. We’re still in the very front end of the provable end of blockchain.”
When the first ad appeared online in 1994, only the advertiser (AT&T) and publisher (Wired.com) were involved. Today, there are countless intermediaries, naturally leading to decreased transparency, which contributes to the staggering amount of fraud in the industry. According to Juniper Research, fraud will cost advertisers $19 billion this year. That’s nearly four times the collective cost of every single Super Bowl ad that’s ever aired.
One of blockchain’s selling points is its ability to improve transparency. However, when AdLedger surveyed ad executives about the technology’s ability to solve problems like fraud, fewer than half confidently answered “yes” or “no.”
“The goal is to get everyone speaking the same language,” says Cacciapuoti. “Now that we understand what blockchain is and what it enables, what does the world look like? What does everyone—publisher, agency, brand—need? That’s why we founded AdLedger.”
Bringing blockchain to the consumer
As Cacciapuoti pointed out, blockchain is under-the-hood and intangible. The average person may not even realize it exists. However, Walmart could change that, as a brand using the technology in a way that impacts consumers’ daily lives.
Contaminated food kills 400,000 people every year. The source of contamination has traditionally been difficult to identify, due to a lack of traceability from farm to fridge. Using IBM’s Blockchain Platform, Walmart can trace produce to its original source in less than three seconds, something that would have taken weeks before. Similarly, De Beers uses blockchain to monitor the gemstone supply chain, assuring consumers that diamonds are pure and conflict-free.
“It comes back to, ‘How is it going to impact me?” says Kolbe. “We’re just getting to the point where it’s actually real and I think there will be a point where someone says, ‘I don’t know what exactly blockchain does, but it delivers this experience and makes sure my broccoli is fresh. When you start seeing how blockchain impacts the consumer, that will start to change people’s understanding of it, and what they want to invest in it.”