Parsec, a software firm mainly recognized for cloud-based gaming, is releasing AFOX on the R3 Corda blockchain to provide a solution to the unpredictability of the advertising market.
Parsec has released a pilot program for providing options and futures trades and settling digital contracts on the R3's Corda Blockchain.
MediaCom, a company that purchases digital advertising contracts, and Future US, the firm behind ten trade publications like PC Accelerator, Guitar World, and TechRadar are the only participants on the platform. The firms have declared their first futures contract traded without Parsec's third-party intervention.
The Advertising Futures and Options Exchange (AFOX) platform uses an ensured quality metric, measured at one-second of full attention per advertisement, and encrypts these "impressions" on the blockchain.
During the press time, Parsec stressed upon some of the common issues faced by the advertising industry by saying:
“Current media contracts don’t enforce quality standards, so buyers demand favorable cancellation terms. Since contracts are cancellable, a publisher’s business is unpredictable.”
The unpredictability of the media firms' jobs results in volatility in the ad companies' revenues and financial structures as marked out by Charlie Fiordalis, managing partner of MediaCom. He further stated that media contracts which take weeks to write and months to settle could also be canceled within 24 hours of payment. He said, “You get what you pay for.”
Parsec's main purpose is to decrease contract cancellation by allowing buyers to track who saw an advertisement, “see where it ran, and how it was optimized by viewer variables,” stated Fiordalis, hence reducing the need to have an "out" from an unfulfilled contract.
Fiordalis stated that currently, the best media asset is Superbowl ad, that gets a lot of attention in just 30 secs, via Parsec's security to supply one second of full attention per advertisement has an "absolute quality to them" as they are non-cancellable. The event offers certainty to the company buying it, and its "per second" value is easily measurable. Parsec wants to introduce a solution that is non-cancellable and quickly measure the attention value.
AFOX aims to tokenize the blockchain-based media contracts and make them accessible in the secondary market as media futures and options. Future contracts allow firms to safeguard against their price inputs and possibility advertisements in advance at a 40-50% discount.
The second-order effects of the contract financialization can increase market liquidity, as media firms can bet against their guaranteed advertising revenues.
In spite of constant efforts of running the AFOX platform and promoting the sale of futures and options on a blockchain, Pasrec will not remain in the field for long. The CEO of Parsec Media, Marc Guldimann, stated he expects that the future of advertising futures and options is fully decentralized by removing middlemen like Parsec Media Company.