Blockchain and the business of digital video advertising

30 April, 2018

Digital video advertising has come a long way. Data analysts are targeting audiences with greater precision, agencies are enhancing interactivity with augmented reality, and now blockchain may soon find itself entering the fold. To this effect, the Interactive Advertising Bureau (IAB) released a white paper on the potential for blockchain technology to help with buying and selling video ads.

Trust and fraud are pervasive issues in the video marketing supply chain. Bad actors often generate fake ad traffic, artificially inflating views and click rates, which in turn inflates the value of the ads themselves. It’s ultimately a transparency issue: neither buyers nor sellers want to work at a disadvantage.

According to Colm Hebblethwaite, editor of The Block, “Blockchain solutions would theoretically make group incentives and motives clearer to parties in the ecosystem, meaning that buyers and sellers could clearly see what the other is trying to achieve.” Blockchain-based smart contracts can also improve transactional efficiencies, reducing the time and cost of production for publishers.

Blockchain innovations in digital advertising are likely to focus around video because there is a smaller total inventory as compared with banners and other displays. There’s only so much room on a website or television screen, and that makes digital video a worthy testing ground for new techniques. “With this familiarity,” says Eric John, deputy director of the IAB Digital Video Center of Excellence, “the players may be more willing to enter this distributed peer-to-peer network that blockchain enables.”

Over-the-top (OTT)—a media distribution practice by which providers like Pandora and Netflix stream content directly over the internet—is another vector for blockchain experimentation. John says that because OTT is so new, “players are not as rooted in traditional business models and may be more motivated to innovate.” But just because they have the capability doesn’t mean they’ll feel the pressure. AdAge reports that demand for OTT is high enough that there’s little need to push the boundaries—at least for now.

 

Image: Lintenair behind the scenes, via Wikimedia Commons.



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