Why is Amazon hiring blockchain experts for its advertising division?

A job posting on LinkedIn last week suggested that Amazon has plans to bring blockchain technology into its advertising product.

The adtech giant stands to update its advertising offering in “fairly non-revolutionary ways” like ad impression and payment reconciliation.

The company is looking for a software development engineer with blockchain experience to join its advertising FinTech team. The posting said: “This is an opportunity to define a technology architectural direction of a greenfield area for Amazon‘s advertising business using Blockchain technology.” The team is reportedly focused on creating a “blockchain ledger, billing and reconciliation systems to provide data transparency on transnational financial data”.

With global ad fraud predicted to cost an unprecedented $23bn this year, blockchain has been a much-touted solution. The open-source ledger tech at the core of cryptocurrencies, like bitcoin, could also give brands more transparency over their media buys. For example, Unilever and IBM have said they will use the ledger to bring more transparency to the digital advertising supply chain by offering a real-time record of transactions. 

Christiana Cacciapuoti, vice president of partnerships at MadHive and executive director of AdLedger, said that for Amazon, employing blockchain technology would be more of an “infrastructure upgrade”.

“The reduction of intermediaries is something that is often discussed when it comes to blockchain in media, but when it’s employed by the giants, that’s not quite the case,” she explained.

“Independent adtech can write transactional data to a shared location to have an immutable, trusted record of what’s happened – which may eliminate some intermediaries. But Amazon, Google and Facebook, already own the entire tech stack from buyer to seller. These companies are already acting in many cases as DSP, DMP, ad server, SSP, and third-party verification partner all rolled into one.”

At the smaller adtech firms, there are least three or four tech interventions which means the crossover of numerous data sets. These are not easily consolidated. By bringing the data onto the same ledger, the belief is that campaigns can be better optimised by as much as 15%-20%.

Cacciapuoti said Amazon will probably use blockchain in “fairly non-revolutionary ways” at the start, for impression and payment reconciliation”.

“Especially in light of the significant regulatory backlash Facebook has faced since it released the wisps of an idea for Libra, I would doubt that Amazon would take a more aggressive, cryptocurrency-centric approach.”

An ad exec with knowledge of Amazon’s ad workings said it will have difficulty handling the blockchain “trilemma” – finding the balance between scalability, security and decentralisation. Currently, “there are compromises” to be made in these spaces – but they are of the belief it will be solved with hires Amazon is making.

Growth in Amazon’s ad business is slowing, but experiments with new technologies could act as a catalysts to boosting its offering. Luke Bozeat, chief operating officer at MediaCom UK, wrote in The Drum earlier this year that in order for Amazon to displace Facebook and Google’s market dominance, it will need to utilise its rich customer data to help predict interests and purchases. 

“Amazon’s data set is different, and it’s that difference that gives it a competitive advantage.”

Its significance in voice tech, the prominence of Alexa in homes, and the clear line of sight between consumers and its products, could prove attractive. 

There is a concern that its move into branded products is providing competition for brands. Just the other day it muscled into toilet roll and office supplies.  Bozeat questioned the message this sends to brands and wondered whether it should be more focused on providing a comprehensive marketplace and marketing platform. 

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