It’s over 10 years since Google bought DoubleClick the online advertising company for a reported $3.1 billion. It is estimated that in 2017 US companies will have spent over $200 Billion dollars on online advertising — all just to get our attention.
Everything we buy online today is recorded, analyzed and predictions are made on what we are likely to buy next. Type a few keywords into a search engine and then visit a website with embedded adverts and the targeted advertising will begin. We are grouped into categories based on our browsing history, location*and habits. Applications frequently offer ‘free’ versions with embedded adverts. App based games offer incentives to watch commercials or interact with demos of the latest games. Streaming services like Netflix record everything you watch and use the data to power ‘recommendation’ engines that predict programs you may like, and to decide the types of programs to create in the future. Companies are competing and paying for your time, but instead of being rewarded youare the product the advertising agencies are selling.
Over the Holidays I watched my eight year old son playing a game on his iPad. In order to aquire an item he needed in the game he had to watch and interact with an Ad. Someone had clearly put some time into developing this interactive advertising experience. It required him to play part of a game, responding to various prompts and clicking some highlighted buttons as overlaid text attempted to explain why this new game was the greatest. I observed him hit one button five times, another two, then as soon as the ‘x’ appeared in the top right corner he closed the Ad and continued with his game. If the add was 10 seconds, he interacted for 10.01. He didn’t process anything. He clicked what he had to click to generate the prompt to close the advert and continue with his game. It was impressive to watch.
A few things came to mind:
1 — The advertiser really has no idea who is viewing the advert.
2 — How much money is being being paid out to ‘bots’ simulating Ad clicks.
3 — How bad have conversation rates become. Advertising still works, if it didn’t we wouldn’t see it everywhere, but more then ever this is a numbers game — X displays = Y clicks = Z sales.
4 — If I am the target of your advert, and you want me to pay attention to your product, why don’t you just “Pay me per view?”
I took a look at online Ad fraud (Ads being clicked by Bots). According to a WhiteOps paper published in May 2017 (https://tinyurl.com/k9mqpfa) fraud losses for 2017 are estimated to be around $6.5 billion globally. The number is reported as lower than the value reported for 2016. The survey is across a consistent list of companies, each of which have implemented technology in 2017 to detect and block bots. The truth is that bots are getting smarter and its almost impossible to tell what is a real person. The fraud number could very easily be higher and the bots could be winning. Either way, the fact remains that a company has no way of guaranteeing a person in their target audience actually viewed their Ad.
Most of the Ads we see on websites or inside Apps are served up by affiliate marketing companies (and there are thousands). The Site/App owner gets paid per click, often just a few cents. Paying the viewer of the advert would require a solution to track micro payments to millions of internet users every day.
So what has this got to do with Blockchain?
Imagine you created a blockchain smart contract that recorded the adverts people viewed. It would not matter whether the add was displayed on a Phone, Tablet, Laptop, SmartTV or in a store as the user enters an email address for their receipt — one smart contract could be updated by any number of authorized nodes. The contract would record that it was ‘Mike’ that read and/or interacted with the advert. The micro payments made to the advertising agency could now be made directly to the person who viewed the advert, and what’s more, for a fee that person may decide to share more information so that advertisers can target them better.
We could create a Token to be used to purchase advertising based on targeting rules, fund a common platform to serve the adverts, and importantly pay people to view the adverts. Blockchain would enable a very large user base to be managed, multiple independent advertisers and points of advertising to participate, and micro payments to be tracked transparently. Nodes would be by invitation, immediately removing the ‘Bot’ issue and enabling a fast ‘Proof of Authority’ model to be used.
Any user could register to be paid for adverts they view. The user could choose to be anonymous, or be paid more per view as they expose more information about themselves and the adverts become more targeted and valuable to the advertiser.
The real challenge here is how we deliver the adverts.
Has anyone taken on this challenge?
Brave announced the Basic Attention Token (BAT) in 2016. BAT is an ERC20token built on top of Ethereum. Brave’s goal was to create a currency for decentralized, open source, blockchain-based digital advertising. In Brave’s solution the entire platform is powered by Basic Attention Tokens. Advertisers will purchase Tokens and transfer them to publishers based on the attention of their users. The users themselves will receive tokens for viewing the Ads. The users personal data is kept private, but users are grouped for targeting. Advertisers experience less fraud, better analytics and reporting.
Braves delivery mechanism was to launch their own Web Browser. This is a cool browser as it blocks adds and trackers from existing advertising solutions (I wrote this post through Brave and it reports 138 Trackers blocked and 63 Ads blocked!). Blocking all these Ads and Trackers has a very positive effect on performance.
Brave’s use of Blockchain is smart and they are providing a real solution to a real problem. The challenge they face is that as a user Ads don’t bother me enough to change my browser, and I suspect the value of BAT’s I earned would be low. The cost inefficiencies of online advertising are a problem for the advertiser not the user. Until there is strong driver for the users to change browsers I suspect adoption will be low. Without strong user numbers the value to the advertisers is low.
This is one company I will be watching.
Addendum — Since writing this I have discovered Earn.com. This space is moving fast !
#DigitalTown#Brave #BasicAttentionToken #BAT #Blockchain
*Your IP address provides basic information on your location unless you use a VPN to mask it.