Unilever and IBM's blockchain experiment: a silver bullet for digital or a 'glitzy' quick fix?

IBM and Unilever believe blockchain could be the key to stopping nefarious bot traffic

The specifics – or lack thereof – of Unilever marketing chief Keith Weed’s IAB Annual Leadership Meeting keynote have been extensively probed. Less examined, however, is Weed’s outlining of Unilever’s new collaboration with IBM, which will see the FMGC brand harness blockchain to reduce ad fraud, and what that means for the wider industry.

IBM and Unilever believe blockchain could be the key to stopping nefarious bot traffic; when impressions and clicks are generated by a fake audience rather than humans. Blockchain's ability to detail a distributed real-time ledger of all transactions, they argue, will allow for a more transparent way to record how media is purchased, delivered and interacted with with by intended audiences.

While Unilever is in the early stages of an experiment to see how it can use the technology to protect its own interests, both the advertiser and IBM say they hope the partnership will “lay the foundation for solving multiple problems across the ecosystem,” showing there’s a wider discussion to be had.

Details in Weed’s speech were scant, but a blog from IBM explains that iX (its business strategy arm) is working with Unilever to create a solution that will streamline the digital media buying process, minimise the risk of manipulation and provide greater transparency for advertisers.

The first phase of the initiative will identify and correct any billing issues by showing Unilever and the third-parties it works with, such as agencies and ad exchanges, a unified view of audience delivery.

IBM will use “smart contracts” – blockchain speak for when pre-defined terms of an agreement between buyers and supply chain partners are written into code – in order to validate agreed figures, which it claims will head-off any discrepancies immediately.

This is significant because advertisers and their partners sometimes have to wait weeks, or even months, to resolve such media buy issues.

‘Huge potential’

The World Federation of Advertisers (WFA) forecasts ad fraud will cost brands more than $50bn by 2025, citing it as “second only to the drugs trade” as source of organised criminal income.

Blockchain is geared towards recording every transaction along the supply chain, which could go some way in alleviating the some 70% of brands currently amending their media agency contracts to bring clarity to the buying process, particularly fee structures.

In some instances, brands are revising their programmatic spend downwards altogether.

While these trends are spurring some in the industry to ensure that finding solutions to the issue is high on their agenda, whether blockchain is the answer to ad fraud woes remains to be seen.

Matti Littunen, of Enders, warns brands on how they approach it: “Blockchain is a typical glitzy technology fix and it sounds like a silver bullet that’s going to solve these issues for the industry. However, they need to remember that even tech like blockchain calls for a trust between partners to set up, and strategic direction in terms of where the industry wants to go,” he says.

Marketers, he argues, should look to iron out the more fundamental issues in the industry that have to be solved before they look to deploy an entirely new technology.

One thing for certain is that trade bodies are observing the partnership with interest, including Internet Advertising Bureau (IAB UK). Although the group’s chief digital officer, Tim Elkington, concedes that the tech is still in its early stages, despite all the hype. He adds that there is “huge potential” for it to have an impact in tackling issues around trust given that it can track any sequence of transactions from currency exchanges to contracts, records of ownership and fees.

Unsurprisingly, he points to the IAB-backed ads.txt initiative – which openly lists companies authorised to resell premium publishers’ inventory – as another recourse.

“It’s exciting to see marketers embracing all the opportunities that new technologies can bring to the table. While these might not be the sole solutions to all the unique challenges facing the digital industry, they’re certainly steps in the right direction,” he adds.

Richard Reeves, managing director of the UK Association of Online Publishers (AOP) recalls how before his trade body committed to supporting the ads.txt standard he was in conversations with small vendors in a bid to better understand blockchain and see if that was a viable alternative.

He concedes that he is still asking questions about blockchain on behalf of publishers, but says many of the experts he has discussed it with have expressed concerns about the current capability to scale the technology.

Reeves continues to explain how Unilever’s announcement of the blockchain partnership with IBM did stir excitement among members, especially when it comes to addressing transparency issues such as fraud and misattribution at scale.

“When the big boys adopt something it gets everyone’s attention,” he adds. “I think this now elevates blockchain ‘up the chain’ to a point where there is going to be much more sincere investigation and discussion around it.”

Another trade body monitoring the media buy side closely is Phil Smith, director general of ISBA, who says it's clear that "much work still needs to be done to address the many issues advertisers are facing when buying and evaluating digital media."

He adds: "Our members want reassurances that they are getting what they have paid for and in many cases this is still not happening. Therefore we are watching with great interest any technology that aims to improve transparency in the digital supply chain and look forward to hearing more about the Unilever and IBM partnership."

Banking on blockchain

Unilever is already banking on blockchain in other capacities. Last summer, along with more than a dozen food companies and retailers including Walmart and Nestlé, it formed part of a consortium dedicated to using the tech to glean better insights about the origin and condition of food.

Again, Unilever has moved forward with IBM on a year-long pilot project that will use blockchain to manage transactions within its physical tea supply chain, indicating that the FMCG firm sees it as more than a passing trend.

Ultimately, Unilever's media buying trial could influence other brands and digital players to adopt a test-and-learn attitude to the tech and the ways in which it can be leveraged to improve the digital supply chain.

However, the IAB's Elkington cautions that investing in up-and-coming tech is just one part of the puzzle: “Getting the right technology in place makes up just one part of digital advertising, along with brilliant content and remembering that we’re communicating with people," he says.

"We need to think about what we’re putting on the screen because better content will lead to better advertising."

With the blockchain marketing landscape estimated to have grown by 400% over the past 12 months, however, it looks like the technology will have a growing impact on the industry for some time to come.

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