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Fraud, diminishing revenues and dissatisfaction afflict the online advertising industry. Can a new system by Brave make these woes disappear?
Online advertising is a field that represents a “broken system with eroded revenue, trust and privacy” according to an announcement made by Brave, the Web browser that promises to make your internet faster and safer than your current browser.
The people behind brave are now launching a Blockchain-based digital advertising platform which is based on a Basic Attention Token (BAT).
Online advertising is a broken system that needs mending. CNBC recently cited figures from The&Partnership and Adloox who estimate that fraud in online advertising cost advertisers $12.5 bln in 2016, they estimate that this year these costs will further spiral by an addition $4 bln.
Add to the woes of ad publishers the fact that many users are simply banishing advertisements by using ad-blockers. The existing model for advertising that forces ads down the throats of users whether they want them or not is a major factor that leads to users adopting drastic measures to cut on the annoyance.
We talked with Brendan Eich, President and CEO of Brave Software Inc. on the use of ad blockers.
He tells us:
“We see ad blockers as necessary defensive tools for users but they are not sufficient. Our users tell us they want better ways to support the websites they visit and like.”
BAT is based on a new system that will reward users if they opt-in to view advertising. Using the Brave browser, these viewers can be monitored privately, without tracking. Both the publishers and the users will receive ‘tokens’ for participating in the system.
The data of the users will be kept on the device and in an encrypted form which will protect their identities. Users will benefit from having their privacy protected and since they choose to opt-in to the advertising system, the advertisements will be relevant to them.
Publishers stand to gain through the BAT system because they will get better reporting, improved revenue and there will be fewer chances of fraud. Advertisers stand to gain in terms of economical customer attention, less fraud and better attribution.
The Blockchain that BAT has opted for is Ethereum. Says Brendan on why they picked Ethereum, “Very simply, we need the smart contract support in Ethereum, and it has been a proven platform for token launches.”
On how the system is tied up with Ether, Brandon Eich reveals:
“We are starting it without relationship to anything but Ethereum, so investors will buy BATs with Ethers. After this funding step, we go to an "in-game" token model where users can choose to get private/anonymous ads and receive a BAT revenue share, publishers get the rest of the revenue and advertisers renew their BAT from commerce with publishers and users. Over time and with scale, we expect more interesting flows to emerge.”
In the beginning, BAT will be only available on the Brave browser, At BAT 1.0 stage they would be integrating the BAT wallet into the browser and transactions would be handled by the international Zero Knowledge Proof (ZKP) ledger system.
This will protect the anonymity of the users, publishers and involved third parties. It is expected that in the Beyond 1.0 stage the transfer and verification process will be distributed on Ethereum using a state channel scheme with zero knowledge proof protocol to maintain user privacy.
Brave is hoping that as the system matures into a fully decentralized micropayment system, other developers will use their infrastructure which is free and open source and develop their own use cases.
So how would an ordinary person use BAT on a given day? As Brendan explains:
“One idea I like is this: I pay the FT.com a subscription, find a piece they did that is great, want to share it with a friend who does not subscribe. Could I send him a sealed BAT gift to cover the cost of him reading the link at FT.com? This is quite feasible and avoids copying the article out to him or making him subscribe in full. Yet it is good for the FT too.”
It can be that the future of web advertising is about to become user-centric and that is how it should be.
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