Ignore The Hype, But Don’t Ignore Blockchain And AI

March 15th, 2018 | ACA Team, Association of Canadian Advertisers

Is marketing ready for AI and blockchain?

After a period of confusion—verging on chaos—in the digital ad industry caused by the explosive growth of programmatic buying, Ratko Vidakovic had detected some calm and stability returning of late.

It’s not totally fixed, but things are improving and progress is being made in some of the areas that rightfully concerned many of the marketers he spoke with about programmatic.

“Generally speaking it is getting better by virtue of the press coverage, law suits and the giant CPG companies beating the drum about transparency and brand safety,” said Vidakovic, one of Canada’s leading authorities on programmatic ad technology and founder of Toronto-based consultancy AdProfs.

But now he sees two new technologies emerging, expanding, generating a lot of buzz and, once again, causing confusion in ad tech: AI and blockchain.

Ratko Vidanovic
Ratko Vidakovic

“Artificial intelligence is one of those things that is being misused and exploited as a buzzword by ad tech vendors,” he said. “People are talking about blockchain like it will magically solve all of the challenges in the ad tech space.”

A lot of marketers are feeling that way these days. Clearing up some of the confusion about AI and blockchain is the focus of a half-day executive forum in Toronto from the ACA on April 9. Keynote speakers include Konrad Feldman, co-founder and CEO of Quantcast and Will Luttrell, CEO, Amino Payments.

With artificial intelligence, there is disagreement about how to define it, let alone apply it, said Vidakovic.

However, he has no doubt that AI holds enormous promise for marketers looking to improve campaign operations, planning, execution and optimization. “I think all those things can be automated,” he said.

That automation will have massive implications for agencies and brands alike. “Given the challenge with recruiting for programmatic, this could go a long way to where you don’t have to hire as many people and use algorithms instead.”

In a talk earlier this year, Feldman shared similar ideas about AI.

“Artificial intelligence is overhyped, and it will be completely transformative,” he said. “It will be completely transformative to every company, to every industry to every brand to every customer experience…. It will herald in a bigger change in our industry, and every other industry, than the internet.”

AI is a powerful tool but it needs to be used the right way, he said. It needs to be optimized for the right goals and be fed with the right data.

“First party data will reign supreme,” he said. Third party data still has a use for consumer insights and assessing outcomes, but less so when it comes to targeting new customers. Feldman will be going deep on data and AI during his keynote address to the ACA.

As far as blockchain goes, Vidakovic said the potential isn’t in transaction processing—it’s too slow to handle an ad auction—but in restoring transparency to what has become an enormously complex supply chain.

A lot of marketers are wondering what happens when they make a buy, not just who gets what, but how the money flows through the system, he said.

“In some cases, agencies are withholding payment for months to gain interest, but that slows down the supply chain,” he said.

These are exactly the kinds of issues that Luttrell’s Amino Payments was designed to address.

Fundamentally, blockchain is about transparency—distributed ledgers that anyone can access. That transparency not only gives marketers peace of mind about where their money is going, but puts margin pressure on intermediaries in the system. “It should put more money into the pockets of the publishers because less is being syphoned off by intermediaries,” said Vidakovic.

In a recent interview, Luttrell explained that when a buyer puts $10 million into a large advertising campaign, they should know where every penny of that $10 million went. On the sell side, Amino’s blockchain-based solutions mean faster payments and more revenue in the pockets of publishers as bad actors are identified and removed from the supply chain. “Ultimately, controlling the money is what will allow us to control the problems that remain in ad tech,” said Luttrell.

But realizing that kind of real and positive change may not happen fast, warns Vidakovic. “Any time you are trying to change the status quo in an industry, it is never going to be easy. Especially when you are trying to shift the power dynamics,” he said.

The pressure has to come directly from marketers because they hold all the bargaining power.

“The agencies and other intermediaries are going to fight this,” he said. “It will be a challenge because this is truly disruptive technology.”

Learn more about the ACA’s April 9 forum: Question The Data / Follow The Money – Is Marketing Ready For AI?