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IBM Blockchain Aims To Boost Unilever And Digital Media Ad Profit

The new partnership between the world’s second-biggest advertiser and IBM will use transparency to cut out confusion and unnecessary costs.

IBM Blockchain Aims To Boost Unilever And Digital Media Ad Profit
[Photo: Avi Richards/Unsplash]

On Monday, Unilever’s chief marketing officer Keith Weed gave a speech at the Interactive Advertising Bureau’s Annual Leadership Meeting in Palm Desert, California, in which he outlined the world’s second-biggest advertiser’s concerns with the toxic environment and content on social platforms, as well as the lack of transparency in the digital ad supply chain.

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In his speech, Weed said that what were once industry issues have become consumer issues. Consumers “don’t care about sophisticated data usage or ad targeting via complex algorithms, but they do care about not seeing the same ad 100 times a day,” Weed said. “They don’t care about ad fraud, but they do care about their data being misused and stolen.”

To help solve some of these issues and tame the Wild West of digital ads, Weed has enlisted IBM iX, the company’s business strategy arm, to create a blockchain solution to simplify the digital ad supply chain and provide more transparency and, consequently, build more trust. The partnership came about when IBM iX’s executive partner of global marketing Babs Rangaiah saw the potential impact IBM’s blockchain technology could have on Unilever’s digital ad challenges. Rangaiah is uniquely qualified to bring the two companies together, given he spent 14 years at Unilever before joining IBM in 2016.

He says the current programmatic digital ad landscape is riddled with discrepancies, redundancies, and other problems, and that clearing it up could help both marketers’ and publishers’ financial stake in the digital advertising market.

“It provides transparency, everyone knows who’s in the picture and what they’re getting paid, there is one agreed upon audience metric that everyone signs off on,” says Rangaiah. “That’s phase one. Some of the things Keith was talking about are cultural, some are editorial. There is a whole slew of safety and brand trust issues involved, but there are some things that we think, in phases, can be solved.”

Traditionally, ad buying was pretty straightforward. There were only a few parties involved–brand, media agency, publisher, and measurement firm Nielsen. The agency would get its 15% commission and the publisher would get 85 cents on the dollar. Today, Rangaiah says estimates report publishers are getting between 30 and 40 cents on the dollar.

That’s because with digital, more parties got involved with ad servers and the like. Then it got even more complicated with programmatic, with issues like fraudulent bots, videos only seen for a second being counted as a view, that sort of thing. As a result, more companies were added to the supply chain to help solve those issues. “Now when a purchase is made, you’ve got the client sending money to an agency, with a trading desk that then has six or seven or more ad tech players in the middle before it gets to the publisher,” says Rangaiah. “The publisher gets far less money than they used to.”

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Not to mention the discrepancies that occur when this many players are involved, like what they’re getting paid versus how much they should be getting paid. “That’s transparency–with blockchain, you’ll be able to see everyone in the process and exactly the function they perform,” says Rangaiah.

He says it can take weeks after a campaign to figure out just what those discrepancies are, and what numbers are right. “You can have 10 to 20 people at an agency doing nothing but trying to solve these issues,” he says. “It’s a total waste of time and resources. With blockchain, at its most basic level, it will solve for that.”

Already, IBM iX and Unilever are seeing positive results. In the weeks leading up to Weed’s announcement, they ran historical ad data through the system and found discrepancies immediately, rather than having to wait the duration of a campaign. The blockchain finds discrepancies daily and demands they must be fixed before an ad buy can go through.

Ultimately, it’s still early days but Rangaiah sees this initiative as a major step in illustrating the potential of blockchain in advertising and media, particularly because it’s being utilized by such a big marketer like Unilever.

“You can say that blockchain will do for transactions what the Internet did for communications, which is a huge statement,” he says. “But this is like 1992 for the internet when we had no idea what was possible and when. We had an idea of what it could do, but not how soon we’d get there. That’s where we’re at with blockchain.”

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About the author

Jeff Beer is a staff editor at Fast Company, covering advertising, marketing, and brand creativity. He lives in Toronto.

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