AT&T And Bayer Bet On Blockchain To Tame Digital Advertising

Major brands like AT&T and Bayer are on a crusade to bring transparency back to the digital media supply chain – and are hoping the blockchain-based solutions they’re testing can be an answer.

“Who specifically are those tech providers [in the supply chain] and how much of a fee are they assessing to my working media dollars?” said Mark Wright, VP of media services and sponsorships at AT&T. “It’s pretty murky and thus you need technology to help you get under the hood right now.”

Pharma giant Bayer has been scrutinizing its digital media supply chain since the ANA’s blockbuster 2016 media transparency report warned advertisers of waste and fraud in the ecosystem.

Both brands are working with blockchain tech platform Amino Payments. Bayer started working with Amino last year, said Jeffrey Rasp, director of digital strategy for Bayer’s US consumer health group, and just began media-buying and reporting tests of blockchain-based campaigns that will run through 2018.

Bayer overhauled its media practices in 2017, building a team to report on ad platform data – bids, clearing prices and inventory – and re-examining its agency and vendor contracts, Rasp said. But that still doesn’t break down the split of every dollar within the supply chain.

Wright said AT&T began piloting its blockchain solution early this year.

“We’re a significant investor in the bidded programmatic space, and we have a significant stake in understanding where our money goes and if we’re getting our money’s worth,” Wright said.

He didn’t want to pin down a specific timeline for the test – although he anticipated the first round would be complete “in the near future.” Once the results come back, AT&T will summarize its findings and plan its next step.

Like Rasp, Wright sees the value in shoring up vendor contracts to understand which middleman is providing what value at what price. “But first you need to know who to assess that to, and you can’t get that until you know who’s in [the supply chain,” Wright added. AT&T is also working with AdFin, whose solution complements Amino’s.

And Amino is certainly building on the momentum, with a $4.5 million seed investment announced Wednesday and led by First Round Capital to expand Amino’s footprint in the market.

Amino has integrations with the buying platform Dstillery and with AppNexus, which as a DSP-SSP hybrid is uniquely suited for the blockchain tech partnership.

The gang gets together

Of course, it’s impossible for blockchain to reveal who’s in the supply chain if all the stakeholders aren’t somehow connected.

Building inventory at scale is a headache for blockchain vendors because they need to add media networks or publishers one by one, but AppNexus eliminates this hassle by integrating almost its entire supply network.

AppNexus started working with Amino and other blockchain initiatives as a potentially better way to manage reconciliation in digital media, co-founder and CEO Brian O’Kelley told AdExchanger last October regarding its partnership with Amino.

The ad tech platform added a “trust and transparency rider” to its media network and publisher contracts last year, O’Kelley said, which includes permission to apply inventory for blockchain partner campaigns.

For AppNexus, though, the appeal of blockchain-based ads comes from mollifying brands.

The past year has seen a string of lawsuits over unreconciled ad campaigns. Uber sued the Dentsu-owned mobile agency Fetch, The Guardian sued Rubicon Project, and DataXu and RhythmOne are in a cycle of suit-countersuit.

AppNexus experimented with blockchain-based tech as a way to resolve these campaign issues, O’Kelley said, because brands are more likely now to refuse payment over reporting errors or confusion around, say, whether a bid should have been on a first- or second-price auction, prompting cascading lawsuits in the supply chain.

Bayer previously ran a portion of its programmatic spend through AppNexus, and the difference now is that its spend on the platform will come with guaranteed reporting on fees paid to intermediaries and the amount spent per unit of inventory, Rasp said.

He expects to consolidate more spend with AppNexus over the course of the year as insights from the platform show what’s working and what’s not.

The pharma giant is more aggressively turning off vendors, data suppliers or media companies that don’t demonstrate value under Bayer’s more rigorous standards, and Rasp said he expects savings to materialize as it trims its roster of spoofed inventory or non-performing media based on Amino reporting.

Eventually Bayer would prefer to be able to pay for media directly on the platform, with prompt and guaranteed payments as a “carrot” to entice agencies and ad tech companies into the system, Rasp said.

Agencies and ad tech companies face a payment-cycle dilemma because publishers must be paid immediately for inventory but advertisers pay vendors on weeks or months-long cycles. And brands are looking everywhere they can for leverage in reshaping uncooperative digital media intermediaries.

“The majority of every dollar should be focused on outcomes for the business and not the players who own part of the marketing process in between,” Rasp said.

Ryan Joe contributed

This post was syndicated from Ad Exchanger.