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Verasity CRO, Justin Wenczka, on how blockchain is poised to clean up Adtech
October 13, 2021
Justin Wenczka, CRO of Verasity, talks to The Digital Voice about how blockchain is the best solution to clean up the ad supply chain, and how the booming esports sector is the arena in which it will prove its worth.
What are the main challenges you see in ad tech today?
There are a lot of interconnected challenges, and many of them revolve around the lack of transparency in the supply chain: where the ads are served, and where the money goes. Back in 2017, P&G chief brand officer Marc Pritchard famously described the media supply chain as, “murky at best, and fraudulent at worst”. Nearly five years on, and despite the best efforts of various parties, the real issues remain: opaque methods, debatable numbers, fraudulent views, falling Cost Per Mile. Invalid traffic (IVT) is a particularly large problem. Fraud bots are everywhere; as Google once noted, half of all online ads are never seen by a human. The result of all this is that brands don’t know what they’re paying for, publishers have to wait too long to be paid and the standard of digital advertising keeps falling. As long as there is more than 5% fraud (and it currently stands at 50%+), video publishers cannot make money and brands are unhappy with their online advertising.
Why haven’t current solutions been able to solve these issues?
Because they haven’t used the right technology. The IVT solution providers are all black boxes. You don’t know what’s being disqualified or why, and publishers can’t actually solve the problems because they are not transparent and are beyond their technical know-how. Then there’s the fact that every party on the chain has different agendas and sets of data, and they almost never match. So you need technology that is transparent by design, that allows everyone to share the same data, and in practice that means blockchain. Only a blockchain company can solve these problems.
Blockchain has a reputation for being baffling. Can you help?
Aside from being a new and complex technology, the whole blockchain landscape is a little bit tainted by the failures of people to adapt this technology and ventures that didn’t seem to be solving a real market problem. Blockchain, the way we use it, is essentially a decentralised database management system. The real point of it, when you sweep away the other things that people have tried to do with blockchain, is that data stored on the blockchain is immutable and since no one company or organisation can control it, it is transparent, visible and auditable for everyone.
By building an ad system around blockchain, we shine a light on the entire process by creating universal data that everyone can agree on, so that collaboration and communication become far more straightforward. And because 45% of ad spend is video and 64% of ad fraud is attributed to video content, that is what we are focusing on.
What does a blockchain-based ad system look like?
From a brand’s point of view, our complete VeraViews system allows them to upload their ad campaigns directly to take advantage of publisher inventory. We have our own patented proof of view technology that cuts out ad fraud in real time, in a privacy compliant way. All the data surrounding the delivery of the ad is entirely transparent and immutable and stored on a public ledger, which means legitimate ad engagement is recognised by every party immediately.
From the publisher’s perspective, that means there is no debate about what ads were served and what impressions were generated, and that in turn speeds up the process of payment. Instead of being paid in the following quarter or the quarter after that, publishers can potentially get paid in a few days, based on their validated views.
What is proof of view and how does it leverage blockchain to resolve video ad fraud?
In technical terms, it is a protocol layer technology, but what that means is that it offers immutability and transparency for video advertisements. The back end of the system uses artificial intelligence and over 200 touchpoints that enable us to determine, in real time, whether a human or a bot is viewing an ad. So there is no longer any need for post-delivery fraud analysis or applications for refunds from ad publishers. Because legitimate views are verified and added to a publicly accessible blockchain containing anonymised data, there is no possibility for manipulations of view count or audience metrics.
Advertising has been focused on manipulating user engagement and metrics for years. We believe we should offer a ‘safe space’ where those practices are removed and instead learn from the video game sector who have been facilitating mutual engagement for years. Why just solve a problem within a system, why not learn to build a better system?
As well as the VeraViews ad stack, you have an esports tournament site. How do these things fit together?
Verasity launched Esports Fight Club (EFC) as a proof of concept for our VeraViews technology. EFC is built on the Verasity platform and has since organically grown to become its own revenue generating product.
EFC, with its “watch and earn” offering provides esports participants to earn rewards when they create, play or watch esports on the official site, efc.gg. This may seem simple at face value, but it changes the esports ecosystem significantly for all. The consumers gain a better experience by earning rewards; content creators in turn have a captivated and invested audience; and advertisers have access to a very clearly defined demographic.
Esports will be a 1.8bn dollar industry by next year, with nearly 70% of the revenues coming from sponsorships and advertising. The barrier to entry is quite high, considering sponsorship is quite costly, and a challenge to measure, as much of it comes in the form of the branding of events. In addition to all of this, advertising has been focused on manipulating user engagement and metrics for years. EFC offers verified human views of esports content, and advertisers will get accurate, timely and transparent data.
Verasity’s unique technology is already available to more than two million video publishers with 110bn monthly views, bringing engagement and revenues back to publishers’ sites.