It’s rare when a technology bursts onto the scene already fully formed, so it should come as no surprise that blockchain still has maturing to do.

Seb Joseph’s Digiday piece on Wednesday, “Blockchain buzz among advertisers starts to fizzle,” may seem counter to MAD Network’s core beliefs on its face. But beyond the headline, our position is actually not that far apart.

Though the excitement around it led to what some might describe as a “gold rush” over the last 18 months, blockchain’s use in advertising applications is still in its early days. This is not because the technology itself isn’t suited for advertising, or because blockchain’s transaction speeds cannot sustain the needs of the market (despite outlandish claims to the contrary by some early players). Rather, it’s because what is new and truly disruptive takes time - and the right approach. Some of the early players were clearly trying to make a quick buck on an emerging space, and frankly, many were selling snake oil. So it’s no surprise that we’re seeing a thinning of the herd across blockchain projects in general. It can take time for quality to rise to the top.

The smartest players in the space have long-term goals to use blockchain to truly disrupt the current advertising model and solve many of its core issues. And that “fizzling” you hear? That’s natural -- in fact, we believe its healthy. It’s the transition from an overhyped phase to a mature phase. Following that initial burst of excitement, the best players are now rising to the top, leveraging blockchain and cryptography to disrupt digital advertising.

Technology taking time for adoption is normal. Think back to Amazon just after the dot-com bubble burst. The company lost 95 percent of its value. Meltem Demirors, Chief Strategy Officer for Coinshares, eloquently reminds us that it took nine years for Amazon to recover back to its pre-bubble peak. And much like the best blockchain companies are doing today, it deployed its capital over the next nine years to build transformational products that laid the groundwork for the giant brand we know today -- not to mention a share price of nearly $2,000 USD.

With the right approach, blockchain and cryptography will create a new foundation for digital advertising. But many of the early attempts by overhyped projects took an exceedingly simplistic approach to a complex industry and a complex set of problems. Many in the market took the most basic implementation of a blockchain, intended for moving money like in the case of Bitcoin, and slapped it on the centralized programmatic supply chain hoping it would bring transparency that the industry is so desperately seeking.

Alas, this approach is fairly naive. The current state of ad tech is fundamentally broken, so why would adding a blockchain on top of it provide the fix? Moreover, why should we expect the very players whose business models are aligned to the existing, broken system to back the changes that blockchain and cryptography will deliver? In our minds, there is no possible way that the IAB and its constituents (who have heavy margins and shareholders they are responsible to) will wake up tomorrow and say, “We are okay with a new model where we no longer take $.40-$.70 of every media dollar” -- it is not reasonable, likely, or possible.

When I spoke to Barry Cupples, CEO of Global Investment for Omnicom Media Group yesterday, he agreed saying, “the industry needs change and protocols that support transparency and delivery that we can hold up for scrutiny if needed. Blockchain provides that potential and we are too early to pass any judgement beyond the opportunity we have to seek evidence on the concept.”

What’s more, we see demand from the market to test blockchain-backed solutions that actually move the industry forward. Cupples added, “Advertisers obviously think it warrants investment as a number of major clients are heavily invested in resource to understand the potential of blockchain. In a cynical world we need a little more patience to innovate the answers that are needed for change. I for one stand by blockchain as a vehicle to drive that change and recognize that bodies like the IAB will not be the ones to deliver change”.

With that in mind, what is more likely is that a new standards body like AdLedger will emerge whose members, including MAD, Omnicom, WPP, IBM, GABBCON, IPG, Meredith and Critical Mass, among others, share the need for change. Along with a new standards body, new and existing companies who understand the real value of blockchain and cryptography will come to the forefront as the new market leaders, like MAD, IBM, Amino and others. The model will not be simply adding an immutable ledger to the supply chain to create transparency in a fragmented system where none exists to begin with. It’s a nice idea, but it forgets one fundamental truth: garbage in, garbage out. Writing fake or bad data to a blockchain doesn’t make it true or trustworthy. It writes the lie in permanent marker, and dresses it up as truth.

Understanding that last piece -- you can’t slap blockchain on anything and expect it to impart truth and transparency -- is the first step toward what’s next for blockchain.

Chad Andrews, IBM Global Solutions Leader for Advertising and Blockchain, also sees this as the start of a fundamental change across the industry. Speaking this week to Christiana Cacciapuoti, Executive Director of AdLedger, he said, “Early learning suggests that there is substantial value in where we are today, which is gaining agreement across the ecosystem on what data should be shared and how it should be endorsed and decentralized for better transparency and financial process. We are right where we thought we'd be and on course for advertisers and publishers to see many billions in improved efficiencies, starting in 2019.”

We completely agree that we still need to see what blockchain can do and you can expect to see more and more on this front from MAD and our clients in the coming weeks and months. MAD is the first blockchain network for advertising with privacy by design, laying a new foundation for the industry that will fundamentally disrupt how it works, without changing the workflows. MAD leverages blockchain and cryptography to solve the key problems around consumer privacy, unnecessary ad taxes and rampant fraud, providing consumers with privacy and more relevant ads. Meanwhile, advertisers and publishers receive needed transparency on every ad transaction.

Applied blockchain and cryptography is a story of revolutionary disruption, not evolutionary change. And we agree with Seb -- there has been a lot of hype but little action in 2018. But we diverge on one important point: change is not that far from becoming a reality.



