NEW YORK — These remain very early days for blockchain, but the opportunities that the technology presents for media and entertainment (M&E) and other companies are significant according to Chad Andrews, IBM global solution leader-advertising and blockchain.
“In the crawl, walk, run progression of this technology, we’re really still in the ‘Honey, I think my water broke’ stage,” he said July 24 during a session called “Blockchain + Advertising = Transformation & Innovation” at the Smart Content Summit East event, part of the Media & Entertainment (M&E) Day at the Microsoft Conference Center.
The 2018 M&E Day also included Content Protection Summit East and Entertainment Production in the Cloud (EPIC) conference tracks, providing M&E technology teams insights into the creation, production, distribution, security and analysis of content.
Andrews provided a brief history of blockchain technology, pointing to its start within bitcoin, which he noted was an example of a public blockchain application, where anyone can see the details of a transaction, but there is anonymity. There are now, however, private blockchains, where users know who they’re dealing with, but where access to what each party can see can be controlled.
“There’s two really different uses of the technology” around M&E, he noted. One is around the supply chain and being able to use a public permissioned blockchain so that parties that don’t traditionally share information have a mechanism to do that. The other use is “tokenizing” and trading assets on the marketplace, Andrews said.
It’s all about “removing business frictions and it’s making it easier for buyers and sellers to transact,” he said of these uses of blockchain, noting IBM “started investing heavily about five years ago in blockchain.”
IBM was interested in the “core technology” – the “shared ledger system” made possible by it and realized that the technology “could actually create trust in shared information in business networks and it could change the game for a lot of different business models,” he said.
Despite the opportunities provided by it, he said: “Blockchain is not like a magic solution that will change everything – you implement blockchain and tomorrow your entire business is going to be transformed. It’s not a silver bullet.”
Blockchain participants are still “pre-baby walking at this stage — so, we’re going to see a lot of things really need to change and the way that people are collaborating around information has to be reformed before you’re going to see the major impacts of blockchain,” he said.
But blockchain “is a very big deal,” he said, comparing it to the creation of the U.S. and European railroad systems.
There are “two broad use cases” being addressed for blockchain in advertising now, he went on to say: the supply chain and identity/targeting.
Noting that the advertising industry is “notorious for the inefficiency in the system,” he said up to 60 cents on the dollar in programmatic advertising is typically spent on “intermediaries and fraud” – and it can often take many days before a company even realizes there’ s been fraud.
There’s also “some fundamental problems of transparency in the supply chain,” he said, noting CMOs often don’t even know what they bought, especially in programmatic advertising. “This is a really broken supply chain,” he said.
IBM recently took what could be a major step forward in the evolution of blockchain. It recently launched a blockchain pilot program with Mediaocean, initially centered on advertisers including Johnson and Johnson, Kellogg’s, Kimberly Clark, IBM, Pfizer, Unileverr, he said. The initiative will also include ad tech providers and a few publishers gthat IBM is in the process of recruiting he told the summit.
“We’re looking at the entire lifecycle of the media buy, starting with the advertiser” and the program will run through the rest of this year, he said. Mediaocean and IBM iX in June announced the launch of this blockchain consortium for the digital media supply chain. Bringing together some of the world’s largest advertisers, agencies and publishers, the solution aims to provide transparency and build trust and accountability in the advertising ecosystem, according to the companies.
Andrews ended the session by urging attendees in the room to “think outside of the box” because they can be “next pioneers of this technology.” He added: “We’re at a moment and an inflection point with this technology where we have the ability to make the future”
The 2018 Media & Entertainment Day was presented by Microsoft, with sponsorship from IBM Watson Media, Amazon Web Services, IBM, LiveTiles, Microsoft Azure, NAGRA, NeuLion, Ooyala, EIDR, GrayMeta, MarkLogic, Qumulo, Avid, Cloudian, SoftServe and TiVo. The event was produced by the Media & Entertainment Services Alliance (MESA), the Content Delivery & Security Association (CDSA