Despite the plunge in the crypto markets, the underlying blockchain technology keeps growing consistently. Latest reports reveal that Unilever’s venture into digital ad-buying supported by blockchain has started positively. The FMCG giant company stated that after completing its pilot project, it discovered ‘zero leakage’ in all its media investment.
The executive vice-president for global media at Unilever, Luis Di Como, said that the project has enabled the company to save money in ad reconciliation. That is the process by which many advertisers make sure that the contracted agreements are delivered.
Unilever has been working in conjunction with IBM to develop a blockchain solution for the around 18 months. IBM has also ventured into an artificial intelligence pioneer in recent years. The technology giant approximated that Unilever has saved “2-3 percentage points”.
Most of the biggest advertisers in the world like Virgin Media, McDonald’s, and Nestle are now turning to blockchain. They are looking at this technology as a solution to reduce costs and enhance transparency in online ad buying. The process of online ad buying could sometimes become a complex ecosystem that is vulnerable to fraud and waste.
It is quite an acute subject of focus especially in the United Kingdom where over 60% of advertising is now spent online. After successful tests in the United States, Unilever is now expanding the pilot and has even set up a consortium with Mediaocean. Mediaocean is advert software and computing company that has a view to creating blockchain as a solution for the general digital supply chain.
Di Como said:
“This is not going for the latest shiny tool. We are going through our rules and our principles to built trust again and having full transparency across all of our operations.”
The blockchain infrastructure is described as a distributed ledger system where records are stored in a tamper-proof manner. They are tamper-proof since records are immutable and shared all over the chain. It is potentially much affordable since needs no centralised database. But, Di Como suggested that it is not a ‘cost-cutting exercise’ adding:
“It’s about finding better ways of doing things and releasing capacity to invest more in strategy, communications and media investment.”
Notably, there will be an incentive to in-house more digital ad buying in the scenario that Unilever can get a practical blockchain solution at scale. Nonetheless, Di Como stated that he has been working together with Unilever’s media agency Mindshare, after using a “hybrid” approach in the past decade. Currently, there exists a debate in the industry’s in-house or agencies.
That type of polarised view is not the strategy that IBM intends to take when working with Unilever. IBM explained:
“We truly believe in a world of ‘and’ rather than ‘or’. We truly believe in a world where we maximise and leverage all our Unilever scale, while using the expertise, processes and technology that our partners bring. We talk about a hybrid approach.”
IBM now plans to dial up or dial down some of the sectors depending on the issues that they encounter in the coming years. However, Unilever believes in the added value that agencies bring in terms of expertise, technology, people, and sale. Getting the best out of these media agencies assists in the enhancement of returns on the company’s media investments.
Programmatic Ad Buying
Programmatic ad buying has inspired a considerable change in the way Unilever works with its media agency. It has its local Unilever trading desk, Ultra that properly fits into the company’s hybrid model. The company did not have such a desk internally or at its agencies 10 years ago.
The most viable solution was to co-develop something that works in a fully transparent manner. Now, Unilever is working on that solution will all of the skills and scales that it get from within its ranks and from its agencies.
Since there is an increase in agencies that specialize in blockchain operating in the United Kingdom, Di Como thinks that people are trying to swap media agencies with those companies. He stated:
“I am familiar with some of the agencies that have launched here. I have seen some experiments in the United Kingdom where people are trying to replace media agencies with those companies. That was maybe why it didn’t take off. IBM, Group M [Mindshare] – all of us are working together throughout this process.”
In the UK, various agencies like Truth and Fenestra have failed to make a huge impact after launching in the last two years. Truth had promised to ‘change focus’ while Fenestra has admittedly confirmed that it has been getting about its business quietly.
If this project by Unilever and IBM succeeds, the advertisement sector will be changed extensively. Companies will from then on use blockchain to enhance efficiency while simultaneously reducing the costs of advertising.