Will new Crypto platforms reduce Advertising & Media agency revenues?
Background image courtesy of Adhive.tv
In the last 6 months there have been a raft of new Influencer Tools and "creator markets" (even Facebook is getting into the game – more on that later..) and a number of them say they will revolutionise the advertising industry by utilising AI, Blockchain and Cryptocurrencies – what I call “the holy triumvirate of tech”.
One of the first platforms to fully integrate the above technology is Adhive. https://adhive.tv
It is currently in Beta but its able to carry out massively scalable global campaigns with multiple content creators in a fully automated way. All the client does is enter the brief and the tool does the rest. No need for an ad agency, no need for media buying, production companies, talent search or creative, and no need to even check if briefs have been fulfilled or worry about bank accounts and payment processing…it does all of that for you - supposedly.
So is it all true , and if so what does it mean for ad world?
To go into a little detail, the way Adhive works is as follows. Brands enter the demographics and locations they want to reach and write a content brief. The Tool then sources creators that fit the requirements, communicates with them, briefs them and they then create the content. It then has an AI tool that automatically checks if the Influencers content has executed the creative according to the brief, checking for brand mentions, time of product on screen etc, if it deems the content fits the brief it then releases payment to the creator in the form of a cryptocurrency. The idea is that this will enable hundreds of on-brand ads in multiple territories to be executed by numerous creators in a simple and effective way – a revolution indeed. If it works it has the potential to funnel money away for agencies as brands execute with creators at scale by themselves.
The company have created and launched their own cryptocurrency to facilitate this, using Ethereum as a platform, and use “smart contracts” and blockchain to determine content ownership and IP – and yes that’s a massive mouthful for an opening couple of paragraphs – if any of that doesn’t make sense DM me and I will be happy to (sort of) explain.
In theory the above all sounds amazing, and the team behind it are seriously well qualified in technology and they have over 17,000 people on their telegram so they have made a big splash. But…there are some obvious concerns..
The first is that I can’t really find many quality brands / advertisers using it. It is of course a nascent system and the key people in the business seem to be linked to Russia so maybe they are going gang busters for it over there and I just have no awareness. It would however have made sense for them to give some free / discounted Tokens to a global brand / agency and create a case study for us to review. They have some YouTube blogs and Instagram posts as live examples on one of their sites – see links below, but they seem very underwhelming. This doesn’t mean it’s not going to work, but its interesting as there are literally thousands followers on its Telegram account (17,000 or so) - but none of them seem to be talking about advertising, they are all just obsessed with getting hold of some of Adhives cryptocurrency -“ADH tokens”.
Posts created through the Adhive system. Image courtesy of Adhive.tv
Question 1) Tokens – why use them?
Why launch your own crypto currency instead of just using cash? Brands / Agencies need to buy the Tokens, putting cold hard cash into the Adhive crypto eco-system to pay the Influencers who create the content. So I asked the co-founder, Dmitry, specifically;
“Why would an ad agency risk buying crypto tokens that tie-up its cash and could also suffer from a drop in value” – Tokens are like that, they change value depending on the demand and supply. His response was that they “hedge” the ad agency / brands cash – so no matter what happens to the underlying token value the cash value of the Tokens purchased is maintained. OK, in theory that’s fine, but it’s pretty complex. He says the advantage of using this system is that hundreds of influencers and campaigns can be executed all around the world with no need for bank account details and there is no need to worry about currency exchange or international transactions.
That’s all well and good, but other creator platforms allow you to place money in escrow and not worry about bank accounts of the creators – without using a cryptocurrency. I’m not sure the advantage of easy banking outweighs the risk of Tieing cash up in a random cryptocurrency which can only be used on that platform? Is it just me or do you think big brands / agencies are not going to be too keen on doing this – hey I could be wrong but it sounds risky and we all know how much brands love agencies being risky with their media spend. On the other hand, its cheap, and some brands love cheap..
And I have other questions too.
Question 2) The AI tool, can you trust it?
This tool is supposed to determine if the Influencer has executed the brief correctly. It automatically scans the content to see if the product has been on screen long enough and if the text messaging has been executed correctly. Now there are AI mage tools that can facilitate this – for sure – and the idea is that it will help advertisers to "scale", as it automatically scans every piece of content to see if it fits the brief, and it leaves Influencers feeling secure they will be paid if they do the job right.
But this seems like a massive risk. I use these AI image tools and they can be great at picking out images in videos and content (once you have “taught” them to find specific mages – which takes a long time) but they give no context. So the content be awful but the AI could say it “fits the brief” and automatically pay the Influencer. I also havn’t met many clients or agencies who would want to leave the decision of determining if a video has been produced correctly to an AI - have you?
Image courtesy of Adhive.tv
So in conclusion I think the platform is technically an incredible achievement, the people behind it seem sincere and qualified. I like the theory of it but I think in practice it will be low value, low brand equity or “discount” companies that will want to be involved, if you care about how your brand is presented you are going to want more control than this allows.
The interesting thing for me here is the scale this could achieve and how easily some brands could activate this themselves. We are not talking about quality, brand controlled advertising here, we are talking about Influencer based content that fits a simple brief. But if Adhive achieves the scale they say they will, it could be a channel that the brands execute on themselves, taking revenue away from the agency - but that's just speculation.
It’s a brave new advertising world out there and we have to not be frightened about using new tech, we just need to go into with our eyes open and mitigate the risks wherever we can.
Dudley Nevill-Spencer
Link to one of their first adverts - https://www.youtube.com/watch?v=jjGlxewDvTM Hope you can speak Russian
Link to some of their clients and posts https://medium.com/adhive/the-wait-is-over-adhive-beta-is-here-7c1e0a065d46
Link to a freaky ad explaining what they do – sort of - https://www.youtube.com/watch?v=8dQVIj4oWS8
Link to an explanation of the service https://www.youtube.com/watch?v=IYx4qk6OYaM
Link to website https://adhive.tv/
Link to white paper https://adhive.tv/Adhive_whitepaper.pdf
Link to platform https://adhiveplatform.com/ (I havnt been able to make this work yet..)
Link to Telegram chat: https://t.me/adhivetv (meet 17,000 crypto fans!)