Bitcoin hit the blogosphere headlines in recent weeks (specifically, Friday 13th, which turned out to be lucky for some) when it reached a peak of $5,856 per “coin” and thereby exceeding the price of gold.
All this fuss has been for something that has no physical entity; a currency that pays reverence to no sovereign state and is not controlled by any government or bank, central or otherwise. Cryptocurrencies and the technology they are based upon have the potential to be the most disruptive phenomenon since the Internet. Whereas many see the upside of this, some governments, extremely fearful of the power of digital currencies have banned them, due to their decentralised nature, and thus their ability to fly under the radar of national governments and their central banks.
On seeing that it cannot put the Genie back in the bottle, the UK and US’ governments have sought to regulate digital currencies in a positive and hospitable way. This enabling approach to regulation has led to a large number of startups using the technology in both the UK and US. Indeed 56% of the world startups adopting this technology are based in either the US or UK.
“I don’t see any available solution
that’s ready to be scaled … by 2019″
So, Can Bitcoin save the ad industry?
It is the technology behind cryptocurrencies that offer the industry the most promise. Every bitcoin transaction is recorded in a virtual ledger known the blockchain. The ledger is maintained by a peer-to-peer community who collectively upkeep it. This activity means every transaction is transparent, accounted for, permanent, verified and traceable. Qualities, to which the ad industry aspires. Through a combination of cryptography and the inherent structure of the blockchain, it is not readily possible to falsify entries in the ledger; or to modify or delete them. If it were possible to apply the qualities of transparency, verifiability and accountability to the world of advertising, it would go some way to reducing the $16.4 billion price tag of global ad fraud.
When can the industry expect the coming of a blockchain saviour?
No time soon, said Jack Smith, chief product officer for GroupM North America, “I don’t see any available solution that’s ready to be scaled with a significant number of transactions by 2019….I just haven’t seen it in the market.”
The problem is this: the speed with which the peer-to-peer community that updates the blockchain can move is too slow to keep up with programmatic advertising. Nonetheless, there are believers in the blockchain’s promise, and these have started their own marketplaces and side projects. One such example of this started earlier this year when, Los Angeles-based startup MetaX joint ventured with software firm ConsenSys to launch adChain, a curated whitelist of publishers and advertisers that will use blockchain to vet sources of inventory with a democratised voting system.
Marketing effectiveness professionals should watch this growing space.
by Dellistina James, Head of Business Development at Mass Analytics
November 2nd, 2017.