This article was originally posted on Coincentral by Alex Moskov, Editor-in-Chief of CoinCentral. Alex also advises blockchain startups, enterprise organizations, and ICOs on content strategy, marketing, and business development.
The Digital Advertising Revolution: 3 Blockchain Projects Looking to Dethrone the Kings
In 2017, Google and Facebook captured nearly 73% of digital advertising revenue in the United States, with the remainder up for grabs for competitors such as Amazon and Snapchat. Digital advertising spending is estimated to be near $270 billion in 2018, and only keeps growing every following year.
With nearly $2 trillion in market cap between just the above four companies, the current digital advertising oligarchy trumps even the (currently) $250 billion market cap of the entire cryptocurrency industry.
The following cryptocurrency projects resemble little more than cockroaches scurrying around trying to build homes and avoid being intentionally or inadvertently stepped on by the Titans wrestling at the top.
So, what happens when Alphabet Inc. (Google), a near trillion dollar company that earns around 84% of its total revenue, sees a threat? What happens when Facebook and Twitter wake up with night-sweats from the distant possibility that some scrappy young company could destroy their business model with a new and unpredictable technology?
They take action where it needs to be taken. It wouldn’t be a stretch to assume the blanket ban on cryptocurrency advertising on Google, Facebook, Twitter, and even Mailchimp wasn’t at least a convenient maneuver to stifle competition.
With 8x the market cap of the entire cryptocurrency market, thousands of employees, some of the brightest talent from all over the world, and access to additional capital essentially at will, the old guard has thousand-foot high walls protecting it’s kingdom.
It’s highly unlikely Google, Facebook, Amazon, and Twitter are even slightly unaware of any of the following projects. Buying and/or destroying at will isn’t so far out of their repertoire, either. They’re even building in-house blockchain-based solutions to improve various parts of their businesses and potentially further shield themselves from any external threats.
Search for the Holy Grail: Data
When Yahoo (1995), Ask Jeeves (1996), and Google (1998) popularized the world of Internet search for the average person, the digital ecosystem was still in its nascent stages. Not only were there very few companies attempting to use the Internet as a platform to sell products and services, few people even own computers.
These were the days that digital audience targeting to the extent of AdWords and Facebook Ad Manager was the stuff of marketing nerd science fiction.
As the Internet evolved, amazing features such as the ability to look anything up at any time and connecting with friends all over the world appeared to be gifts from the tech gods. The vast majority of people didn’t (and still don’t) understand how platforms such as Google and Facebook were free.
The Facebook-Cambridge Analytica scandal of March 2018 was one of the first instances where the general public was exposed to the concept of personal data on the Internet and the impact it can have. In short, Cambridge Analytica is a political data firm that was hired by Trump’s 2016 election campaign that gained access to the private data of over 50 million Facebook users. This firm utilized a variety of strategies, one of which was those stupid Facebook quizzes that probably went something like “Find out which Harry Potter house you should be in!” or “Find out what you’d look like as the opposite gender!” These quizzes were used to identify personalities of American voters and potentially influence their behavior.
Now, this wasn’t by any means a hack or security problem, it’s just that users were haplessly ignoring Facebook’s terms and conditions they agreed to, as well as the alert notifications when they took the quizzes.
Ok, circling back to the role of data. Your data serves as a primary identifier for you and people just like you for thousands of advertisers and companies.
How? Let’s say you have $1,000,000 in advertising budget you want to spend in an attempt to sell as many widgets as possible. Would you rather target everyone in the world, everyone who has the money to buy, or everyone who has the money to buy and is willing to buy? With the right sort of data, you’ll be able to target everyone who can and is highly likely to purchase your product. This means less ad spend going to waste, and ultimately more revenue.
As you can imagine, the right sort of data is worth a lot of money to the right advertiser.
For users, Facebook, Google, and Twitter have provided a “free” service where users themselves become the products and are harvested for data. This leads to two major issues for users: they don’t want their data being shared (especially with the wrong people) and they don’t want to be bombarded with ads that are unrelated to them.
For advertisers, Facebook, Google, and Twitter have created platforms to help collect and refine data, as well as launch highly targeted advertisements while taking a sizeable cut of ad spend. This leads to two major issues for advertisers: they don’t want to rely on platforms that could change their algorithms overnight and undermine entire weeks/months worth of strategy, and they don’t want to cut into their profit margins if they don’t have to.
So, now that we’ve gone over the digital advertising landscape and the role of data at a high level, let’s jump into the cryptocurrency seeking to exploit the 4 major issues of the current model to potentially change the digital landscape forever.
Bitclave is one of the front-runners in the race to dethroning the tech oligarchy and “taking the Internet back” and bringing it to the people.
It aims to do this through its decentralized search engine that eliminates all third-party advertising intermediaries in order to create a stronger and more efficient relationship between consumers and businesses.
BitClave would use a form of incentivized search, where it would only show ads to people who have stated an interest in seeing them. This not only makes the user experience much better, it also qualifies leads for businesses, meaning less ad money goes to waste. This ad money can be used to lower the price of the product or create other forms of value for the user.
Users searching on the BitClave platform would see curated advertisements, while also earning the native BitClave token CAT when engaging with those ads.
In March 2018, Bitclave launched the first iteration of their search engine at https://desearch.com/ and it focuses primarily on cryptocurrency searches.
Basic Attention Token (BAT) is the blockchain-based digital advertising token that powers the Brave browser. The Brave browser is an open-source web browser that automatically blocks trackers and intrusive ads.
Via smart contracts, BAT enables advertisers to send ads with a token payment in a locked state to users. The token payment can be unlocked when users view an ad. The remainder of the payment is sent to the Brave browser and the publisher that hosted the ad.
Users are capable of spending their BAT on anything from premium articles and products, high-resolution photos, data services, or donate to content providers.
BAT’s value proposition is allowing users to safely and privately surf the Internet while simultaneously monetizing their attention. Publishers additionally receive more revenue that would have otherwise been lost to intermediaries and bots. Advertisers get better data in their campaigns and can create better-targeted messages.
AdEx (ADX), or “advertising exchange” is offering a decentralized platform where online publishers and advertisers can negotiate advertising contracts. The platform is completely transparent, has no fees, and provides unrestricted access.
One common theme arises when studying the business models of dozens of cryptocurrency projects: traditional third-party intermediaries across the board are becoming targets for scrappy, young blockchain-based projects seeking to directly undercut the “middleman” business model.
Three projects listed above are by no means the only competitive players in the hunt for the digital advertising market. Projects like Qchain, Adchain, and KindAds aim to accomplish similar goals through marginally different strategies.
Online advertising accounts for nearly 40% of all ad spending, up from 30% in 2015. Regardless of what motivates these projects, whether that be money, power, or a genuine desire to decentralize a near $270 billion/year industry, the opportunity is there. Blockchain has given hundreds of projects the silver bullet to take down the reigning intermediaries – the question is if they have what it takes to build the gun and actually shoot it.