Decentralized Ads– The Web3 Solution of Advertising
The classic web2 experience is inextricably tied with ads. This, in and of itself, is not a problem, as online ads are an extremely important way for companies to reach new audiences, and for platforms to continue providing free services to their userbase. However, the way ads are handled in web2 is a problem– not only for the users who view ads, but for the companies who buy and promote them.
For starters, most ads are managed through highly centralized tech organisations that pull all the strings, such as Google AdSense, Facebook Audience Network and Apple Advertising. These corporations decide whether your ads are suitable, and can choose to limit your exposure or even ban your ads without much recourse or clear reason.
Smaller ad networks are not much different either, as they are also centralized, meaning that your ads are essentially in their hands. This, of course, is worrisome as it takes away a business’s autonomy, and can act as a thorn in any media and marketing strategy.
Not only this, but web2 users often have an unsavoury opinion of ads as they can feel annoying and invasive, especially considering that people are well aware of how platforms sell user data to ad networks. As a response, users can have a bitter and uncomfortable reaction to receiving ads, especially highly personalised ones, as they are indicative of a platform misusing their information. This will, without a doubt, cause users to have a negative view of the ads they see via this method.
It goes without saying that something needs to be done.
The Solution to a Broken Ad Culture
These problems can have a detrimental effect on advertisers. Companies are nervous about the strength ad networks have, and users are uncomfortable with how their data is applied to push personalised ad content. These problems cannot carry over to the web3 space.
The solution is to use a decentralized ad network, one that respects both advertisers and users alike. Idena is creating a network that does exactly this, running on top of its own proof-of-person blockchain, giving advertisers autonomy and ad viewers peace of mind. One of the best perks of this is that companies do not need to worry about getting their ads limited or removed without just cause, as all ad-based activity will essentially get approved and monitored by the Idena community. This is especially positive as it means that the advertisers will be judged by their potential userbase, rather than a faceless corporation.
Plus, as Idena is decentralized, advertisers do not need to disclose sensitive information such as passports or other identifying data, meaning ads can be run privately. This might raise alarm bells for some who worry that a lack of ID means a lack of accountability, but this is not necessarily true as ads will still be judged and assessed on an individual basis by validated members of the Idena network. This means that, even without knowledge of who an advertiser is, their ads can still be vetted and evaluated.
In turn, this creates a more hands-on incentivised experience for Idena users. While users do not receive direct payment for viewing ads, by being included in the ad assessment and approval process, they are brought more directly into the fold, making them feel more enfranchised and optimistic about the ads they see.
Instead of feeling like they are being passively fed ads (leading to a bitter outlook) users are given control over the type of content their community sees making them feel more involved. This could even lead to an uptick in impressions for the advertiser, as users may be more inclined to concentrate on an ad if they know their fellow Idena members approved of it.
Speaking of the Idena community, the best benefit for these users is that they can confidently view ads with the knowledge that their own sensitive information is not being used to push personalised content to them. The Idena blockchain does not store personal data about its userbase, and so people do not need to worry about their information being used to distribute personalised ads. Instead, the open source Idena app allows developers to review the code and change the ad filtering algorithms, giving users autonomy over the type of experience they want (including ad relevancy and ad ranking measures).
Why Does Decentralized Advertising Work?
We believe that web2 mechanisms that force users to watch ads are both ineffective and can be easily blocked (e.g Youtube). Alternative models that use direct payments to users for views/clicks on ads (e.g Brave browser) are vulnerable to abuse, because there is no way to determine whether a user clicks the ads to purchase a product/service or to just earn rewards by clicking the banners.
Decentralized advertising neither forces users to watch ads nor pays users for their clicks or views. It’s based on completely different principles. However it can only be run on top of a network that is free of fake accounts. The attention economy of such a network is built on the coin inflation which is distributed among only validated users (not bots) who are involved in supporting the network. For such users, viewing ads is cost effective as advertisers use the coin burning mechanism to promote their ads. Users are shown only those ads whose creator burns the most coins.
By viewing and clicking on ads, users incentivize advertisers to burn more coins in competition for audience attention. This creates a shortage of coins and stimulates the demand for coins in the market, where users in turn can sell them freely. Therefore, despite the fact that users do not receive direct rewards for viewing and clicking on ads, it is beneficial for them not to block them and to actively click them when it’s really useful for them. This model of decentralized advertising is possible due to the fact that validated users (not bots) receive rewards unconditionally by participating in the network. At the same time, abuse resistance is ensured by the inability to create an unlimited number of fake accounts. We think this is the most critical element that makes it possible to build decentralized ads in Web3.
Final words
The standard methods of running and managing ads are no longer working. Companies are feeling ignored by centralized corporations that tightly control the way their ads are distributed, and users feel disheartened by ad networks that never listen to their input. However, with Idena’s decentralized ad system, both advertisers and users are given a seat at the table, and are provided with the autonomy to properly regulate their ad experiences.
