Digital Marketing used to be simple. An advertiser struck a deal with a publisher and that was basically the extent of it. However, as technology progressed, publishers realized they were leaving money on the table and advertisers realized they wanted better metrics and higher targeting capabilities. Bring in the third parties or “middlemen”.
Ad exchanges, DMPs, cross-device matching, various analytical trackers, and a host of partners vying for a piece of a marketers budget have led to an industry filled with fraud and a lack of transparency. That’s not to say that they don’t work. If done right, these “middlemen” can serve immense value and bring incredible returns for brands. Even so, users and publishers are still paying a price.
According to Business Intelligence, one study found that “up to 79% of mobile data transferred during visits to popular publishers was the result of ads”. If you base that on a 2GB carrier plan, it means that you are “paying up to $23 a month to download ads, trackers, scripts and other related data”. On a desktop, this translates to slower page load times. If you think about it, this makes some sense. Download Ghostery and take a look at how many tags show up on a popular publishing site like ESPN or Buzzfeed. Each one of those is using data.
We all have that one friend who can talk for hours about how the blockchain is going to disrupt every industry, solve world hunger, eliminate climate change and facilitate peace in the middle east. That may have been a little bit of an exaggeration, but seriously, only a little bit. I’ve done some research on these ‘cryptocurrencies’ and it is true; the possibilities do seem endless.
I won’t pretend to be any sort of expert, so if you’re looking for one of those, a quick google search will help you out. What I do know is that there are two major crypotcurrency platforms, Bitcoin and Ethereum.
Bitcoin is used primarily for electronic payments. Ethereum has the ability to facilitate a number of other transactions; smart contracts, government elections, supply chain auditing, file storage, protection of IP, land title registration, and stock trading are just a few examples of its potential. (Click here for a more detailed explanation of Ethereum and how the platform works)
Digital Advertising is another.
Basic Attention Token
Mr. Eich’s goal is to eliminate all of the ‘middlemen’.
The first step is Brave. A “privacy-focused internet browser that anonymously measures user attention in order to properly reward publishers”. Brave is currently available for anyone to download and I suggest trying it out. It is indeed fast and if you’re one of those individuals that actually reads through privacy agreements, this is definitely for you.
The next step is the Basic Attention Token (BAT). Essentially, it’s a form of currency that powers this ad exchange. The token is based on the Ethereum blockchain using smart contracts that are capable of enforcing performance. The goal is to facilitate a decentralized ad exchange.
Here’s where it gets interesting. If you think about user attention as a commodity, then publishers are paying for your attention with interesting content. In return, advertisers want to capitalize on the attention you’re giving the publisher, so they pay them to host their ads there. Ever since publishers loaded their pages with dozens of trackers to measure this commodity, their revenue has decreased and so has the user experience.
Using this token, Advertisers will opt into the Brave exchange. Brave will determine how to best target an individual based on user behavior. From there, a publisher will get paid in BAT depending on how much user attention was given to their site during the time of a viewable ad. Additionally, the user will get a percentage of those BAT tokens for opting into the exchange. You are getting paid to view ads. The end goal is for the user to then be able to use those tokens to unlock premium content or donate back to certain publishers. If you’ve gotten this far, you may just want to listen to the creator himself describe how it works.
This model is a long way off, and there’s still a lot of questions that need to be answered. What will constitute a viewable ad? What other metrics will be rewarded? What type of model are they using for targeting? How are they linking site activity outside of the Brave browser? and various others.
But, it’s an interesting take on the digital marketing industry and investors are taking notice. Just yesterday, the BAT token had it’s ICO (Initial Coin Offering) and raised $35 million in under 30 seconds, resulting in one of the most successful crowdfunding campaigns to date. From here, we’ll have to keep an eye on advertisers that opt into the exchange, and their resulting performance.
If anything, this will be a very interesting trend to watch. Will Brendan Eich be able to place his name once again among internet lore? or is this just a long-winded try to disrupt a very powerful industry? Only time will tell.