Blockchain is best known as the technology underpinning cryptocurrencies like Bitcoin. But it also has wide-ranging applications that have yet to be fully explored, including the potential to disrupt the way digital advertising currently works. eMarketer’s David Greens spoke with Ian McKee, founder and CEO of Singapore-based Vuulr, which aims to disrupt the broadcast content economy using blockchain technology, about how blockchain could remake digital advertising practices.
Ian McKee, Founder and CEO Vuulr
eMarketer: What are the problems that blockchain solves?
Ian McKee: The first is the trust question. With a single view of the distributed ledger that blockchain provides, you no longer need individual parties involved in a transaction to keep their own separate records. The blockchain mechanism provides them with the visibility, audit trail, trust and immutability they need.
The second is managing the transaction and removing the need for a trusted third party. All of that can be published on the blockchain. The third is removing the need for a centralized middleman-one good example of this is in the content publishing business.
eMarketer: How will blockchain change the digital advertising landscape?
McKee: At the moment, unless you meet certain criteria, Google gets to collect all the advertising revenue on your content, so blockchain’s “distributed everywhere” approach is fundamental-it’ll take apart the traditional content publishing ranks. What’s the role of Facebook or YouTube, for example, when you no longer need that to be centralized? Content producers and content consumers can connect through the blockchain protocol.
eMarketer: Aside from removing the need for trusted middlemen, another positive aspect of distributed ledger is its transparency. Is blockchain the answer to ad fraud?
McKee: Cookies, fingerprinting, trackers, programmatic media buying-all of these approaches have slowly eroded your privacy and anonymity. A part of the “cypherpunk” movement is about regaining control over your privacy. It’s an ongoing, inexorable process where consumers are using tech to protect themselves from the advertising industry and brands. Over time, that’s been represented by the “do not call” list to protect people from telemarketing, to spam email filters, to ad blockers. The browser Brave takes it another step further by blocking all of the advertising and tracking very effectively.
eMarketer: And from the advertisers’ perspective?
McKee: Brands choose to interrupt and buy attention vs. create content that’s good enough to earn attention. Brands have used middlemen in the process of connecting the brand and its content-say a banner ad-to the consumer. The industry has become bloated with more and more middlemen that take a large slice in between and perform some function.
The advertising industry looks at the blockchain’s ability to create an immutable audit trail and says, “This is what we need now so we can have more transparency in the industry and understand where our money goes and what happens between us and the user.” Organizations like Mad Network are exploring this area.
One version of the future is that the advertising industry will try to use the blockchain to remove fraud and end up with a solution to a problem that no longer exists-the traditional advertising architecture will simply become irrelevant, because it will all be blocked by a browser like Brave in the end.
eMarketer: If there’s a shift to blockchain, who is likely to lead it within the agency-brand partnership?
McKee: Neither. I’ve been inside a media buying agency and seen the internal attitudes, politics and perception towards the client, and I can assure you there is no genuine interest from the media buying industry for transparency. Transparency opens them up to scrutiny, and they have to answer the question, “What value did you add?”
There is very little appetite for agencies to disrupt themselves. They’re the incumbent, and incumbents never embrace disruption. They have an organization, a structure, knowledge and skill sets and a pool of talent all dedicated to how it used to be.
Innovation won’t come from advertisers, nor will it come from media buyers. It will come, as it always does, from outside the industry.
