IAB whitepaper explores use of blockchain for video advertising

Thursday, February 8th, 2018
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IAB Explores the Future of Blockchain for Video Advertising in New Comprehensive Whitepaper

  • Report Presents Real World Use Cases for Publishers and Buyers & Identifies Benefits and Challenges

NEW YORK — The Interactive Advertising Bureau (IAB) today released “Blockchain for Video Advertising: A Market Snapshot of Publisher & Buyer Use Cases,” an in-depth whitepaper that uncovers strong use cases for blockchain technology in digital video advertising, with a focus on over-the-top (OTT) advertising. The paper acknowledges that blockchain has captured the public’s attention through the skyrocketing growth of cryptocurrency, but also illustrates that the technology is a natural fit for the digital advertising supply chain—potentially enabling increased efficiencies and a more trustworthy supply chain, as well as reducing cost and fraud for publishers and buyers.

The report outlines the foundational structure of blockchain technology, including terminology and then deep dives into blockchain use cases in digital advertising, exploring applications such as FreeWheel’s initiative BlockGraph™, XCHNG from Kochava, Ads.txt Plus from MetaX, and NYIAX (New York Interactive Advertising Exchange). After laying that groundwork, the report spotlights blockchain use cases and proofs of concept for video and OTT advertising, investigating new platforms using the technology, including MadHive’s MAD Network.

Alongside these real world blockchain case studies and insights from executives at the center of these cutting-edge deployments, the report identifies the key advantages of using blockchain for digital video/OTT inventory:

  • Low queries per second (QPS) compared to digital display advertising
  • High value, premium asset class with well-established standards and transactional processes
  • Fewer suppliers, most of whom are known to each other
  • Market is still nascent so players are motivated to innovate
  • Suppliers have lived through the first phase of automation (programmatic) and are more willing to be transparent, and more wary of intermediation
  • Lots of content delivery networks (CDN) are involved in the supply chain, and the CDNs are already peer-to-peer

The paper also cites some challenges to overcome:

  • OTT inventory is already in high demand with sellers—who, as a result, may be less open to experimenting with new business models and processes
  • OTT digital video is already a high margin buy, so the inefficiency of multiple intermediaries is less obvious
  • Typically OTT has a complex set of endpoints, or clients, to serve the advertising to
  • Shared taxonomies, definitions and standards will be needed to enable “smart contracts” of the future, with flexibility to fix current problems and bring incremental improvements

Nonetheless, the potential benefits for publishers and advertisers far outweigh the hurdles and calls for IAB and IAB Tech Lab members across the ecosystem to join the organizations’ business or technical working groups examining the future of blockchain, to bridge gaps and meet challenges head on.

“Blockchain seems to be the new ‘siren’s call’ in the business world—but there is no doubt that this technology holds tremendous promise for digital video advertising,” said Anna Bager, Executive Vice President, Industry Initiatives, IAB. “This paper is a first of what we anticipate will be many reports from IAB exploring the future of blockchain in digital video. Tapping into our members’ pioneering work and insights from across the ecosystem, we plan to offer thought leadership, guidance, and inspiration that will steer the new course for digital video, OTT, and blockchain.”

“Blockchain presents the opportunity for us to approach the digital advertising landscape and its current challenges from an entirely different perspective. Our adaptation has required not only a recalibrating of our view on the ad buying process, but also the creation of a new protocol designed to address the needs of all the players in the ecosystem,” said Charles Manning, CEO, Kochava. “With a focus on creating new transactional efficiencies, we see an opportunity to replace the standard paper-based agreements with a new form of IO, manifested between buyers and sellers through smart contracts. Through these and other innovations, we see a future for a next generation consensus model, supported by a protocol that will be able to handle millions of transactions per second. We look forward to working with IAB and others in this space to push blockchain beyond its current nascent state towards a more efficient, distributed and trusted way of doing business.”