How improvements in blockchain technology will change programmatic marketing

By Trevor Grigoruk

For many in the publishing industry, blockchain’s potential to reshape programmatic ad exchanges is a longstanding promise, but one deemed challenging and expensive enough that it has long been a promise delayed. However, as blockchain technology and its applications to programmatic improve, vendors and their partners are putting their lens on the technology again.

In this Q&A, Custom, the in-house agency at Digiday Media, spoke with Ben Putley, CEO and co-founder of Alkimi, one vendor working to solve the blockchain equation for programmatic marketers, about changes to the programmatic ecosystem and how blockchain factors into them.

Custom: To date, approaches to blockchain in programmatic marketing have amounted to something like a layer of ad tax because they haven’t offered the speed bidders need to compete for inventory. How have new technological advancements addressed this issue for publishers and advertisers?

Ben Putley: Blockchain solves a lot of the issues right now, but so far iterations of products that were using blockchain only represented one part of what it might have been. Traditional blockchain technologies, while groundbreaking, have been lacking for industries such as advertising — where a vast amount of transactions need to be processed in a short finality window, and at low cost. A programmatic bid request taking 30 minutes to be filled (like a Bitcoin transaction) would obviously lose every single time. Similarly, a high transaction fee (e.g. Ethereum “gas” fees) to deliver every single impression would bankrupt a business in hours.

We’re the first project to be incubated by Constellation, a distributed network designed to enable fast, scalable solutions for organizations needing to process and transfer data quickly and securely. At the core of Constellation’s technology is the Hypergraph, a fee-less decentralized network. Hypergraph technology is the only existing technology that can match the cost and speed requirements of hosting an ad auction on a blockchain. The Hypergraph’s interoperability with existing systems and applications means that we can connect to existing endpoints via OpenRTB 2.5 and Prebid, and to existing ad tech solutions (e.g. DSPs) These kinds of advances are enabling programmatic teams to go to market with pipes that feel the same, integrate the same but that perform wildly differently — cheaper, more efficient, more effective pipes for you to trade in the way that you’ve always traded if you’re an advertiser.

Custom: Will these blockchain advancements ‘clean out’ the programmatic ad exchange system? What would be the first three ways you’d say it’ll do this?

Ben Putley: I wouldn’t necessarily say clean out; the metaphor I use is that, at the moment, advertisers and publishers have inventory that they sell and they’re just kind of peeking through the letterbox. They’re like, ‘Oh look, I think that’s what’s going on, I’m going to make a decision based on what I think I can see.’ I think the first step following the advancements underway will be transparency of data, which will then allow much better use of that data — allowing an advertiser to think about their strategy. It’s going to be a …read more

Source:: Digiday