Advertising in a Decentralized World: Rethinking Best Practices for the Rise of Distributed Systems
By: Ds Media
Tags: Distributed Systems, Blockchain, Technology, Decentralization, Advertising

Written by Adam Chambers, June 17th, 2017

On the brink of the horizon, a new world is emerging — a fundamental shift in trajectory for industry and culture alike. The internet is changing, exploding into small pieces and distributing across networks. The reign of the tech giants is coming to an end and the user force is taking over. A transparent new world is emerging, driven by the principles and intentions of the original world wide web — a decentralized world, run by peer networks and driven by interaction.

As innovators and citizens of the internet age, we must keep up with this shift, modify our behaviors, and rethink best practices. We are now advertising in a decentralized world.

The Blockchain

Blockchain is the underlying technology powering the culture-shift toward decentralization. By now you’ve probably heard of it, or the buzz it has created around cryptocurrency investment. A blockchain is essentially a ledger, a record of transactions, shared amongst the peers of an entire network and absent of a centralized owner. This transparent, decentralized system allows unprecedented validity and ownership of digital assets; a missing piece of the digital puzzle that we’ve almost grown to accept. Ownership of digital assets can now be proven and transferred with valid records, through peer validation of every transaction on the chain and without reliance on a centralized middleman. This marks an unprecedented shift in how we monitor, trust, and transact.

Ethereum & Smart Contracts

Bitcoin was one of the first widely-used implementations of blockchain, validating the theory and proving a decentralized currency based on cryptography is not only possible, but worth nearly 40 billion dollars (at time of writing). A more recent advancement of the blockchain technology was the advent of smart contracts; a means for crafting the rules and logic of a particular transaction. Blockchain is no longer limited to cryptocurrency, but rather, primed to support industry and society worldwide — from digital asset ownership to political voting systems, crowdsourcing to media publishing. Even banks have even been jumping on this trend, with Goldman Sachs publishing entire sites and reports on the topic. The blockchain, and it’s push for open transparent interaction, means a number of possibilities and threats to the future of finance.

Ethereum is a distributed computing platform that makes use of blockchain and smart contracts. The excitement around the platform is more than apparent in the massive spike in its currency ETH, which propelled to over 400 USD at one point, bringing its market cap to over $20 Billion. The Ethereum platform has created a wealth of possibility, bringing logic and functionality to the blockchain, and with it a new world, and a new way of thinking.

Advertising on the Blockchain

Digital advertising has long been troubled with problems of fraud and transparency. Recently, innovators have been looking to blockchain technology to solve these problems in ways that were previously not possible. For example, ad tech company MetaX launched adChain; a service that uses the blockchain ledger to follow ad creative and calculate who saw it, where it ran, conversion rates, and much more. The blockchain essentially lets multiple parties work together without the requirement of a centralized middleman system. So, theoretically, adChain could encrypt the details of every impression of a particular ad on the blockchain and broadcast it to every single participant on the chain to be verified by all.

The web of today is far removed from the open and transparent knowledge share it was intended to be. With middleman ad exchanges and cross-device user tracking, the tubes are clogged up and slowed down to a near halt at times. There is a wealth of tracking scripts sent down the wire, following users through the web, slowing page load times, destroying experiences, and all while charging users for the privilege of sharing their data in cold hard cash. It’s the system we’ve grown to accept, but perhaps there is a better way.

A Brave New World

Brendan Eich is an innovator like very few; creator of JavaScript, the Mozilla foundation, and countless invaluable contributions to the modern web. His latest venture is Brave; a new browser and new system for valuing user attention, which uses the blockchain in an inventive approach to digital advertising. Eich’s vision is a decentralized and transparent digital ad exchange; a brand new system that will be released in stages over time. Brave blocks ads and tracking scripts by default, just like many of the ad-blocking systems already installed on millions of devices globally. But, while doing that, Brave is introducing a ledger system that rewards sites, garnering user attention. It’s a simple philosophy in that you are rewarded for producing great content that users enjoy and devote their attention to.

Basic Attention Token (BAT)

The second phase of the Brave project will see the system move to a truly decentralized ad exchange, built on the Ethereum platform and introducing a new form of currency, the Basic Attention Token (BAT). According to Eich, the token denominates attention, or “focused mental engagement,” be that on an advertisement, great content, or whatever the user may be engaging with. The browser will privately monitor your engagement with websites in a highly accurate manner that Eich argues will combat fraud and malvertising. An important aspect of Brave to note is that not only will publishers receive tokens when a user engages with their ad, users will also get a share if they choose to receive ads, which can then be donated back to publishers they wish to support. Publishers may also choose to reward users for their attention, or perhaps charge BAT for premium content. Eich sees the Basic Attention Token as a new standard for valuing user attention in a decentralized digital world; a giant step forward for advertisers, marketers, and publishers alike.

Basic Attention Token from BAT on Vimeo.

The Tech Giants

The handful of tech companies that currently rule the web will not miss out on this monumental shift. Their financial strategies and livelihoods depend on it. You must innovate or get left behind, and you can bet your bottom Bitcoin that the tech giants won’t miss this ship. Advertising platforms like Google and Facebook are examples of wholly centralized systems, they are the gatekeepers between advertisers and users, who are dependent on the platform, unlike Brave’s proposed Ethereum driven BAT ecosystem. But Facebook itself, as a social network, is centralized; as users get more savvy with the technicalities of decentralized systems, in particular the benefits for privacy and ownership, perhaps we’ll see Facebook explore other more distributed architecture.

At Facebook’s Communities Summit, Mark Zuckerberg spoke to Facebook’s new vision: “Give people the power to build community and bring the world closer together.” Zuckerberg plans on using artificial intelligence and machine learning to help users find Facebook Groups (mini social networks, that they may want to be involved in). Could this push on the relatively small feature of Facebook Groups released back in 2010 be preparation for the future? Perhaps what we’ll see is Facebook exploding into a network of networks; small peer-to-peer networks based on transparent blockchain technology — a decentralized system in which Facebook does not control user data, but rather values the attention of small interest groups.

Peer-to-Peer Social Networks

The idea of peer-to-peer social networking is already being explored by a handful of forward-thinking innovators. Dominic Tarr, who grew up on a remote farm in New Zealand and now lives on a sailboat, is one of those innovators. He is an engineer who’s experienced unreliable connectivity and the issues with centralized systems throughout his life, and this experience perhaps gave Tarr a unique perspective on networking in the modern age and how the web ought to work. He built a system called Secure Scuttlebutt (SSB); a decentralized system for sending encrypted messages to small communities.

In a system like Facebook or Twitter, a user will post data to company-controlled servers where it’s rendered for others to view. However, SSB applications retain the posted data and automatically sync with small communities when local network connections are made, using an append-only blockchain log validated with a cryptographic key. The data spreads like word-of-mouth gossip. Patchwork is an example of an application that makes use of SSB technology in a Facebook-like social network — a social system like the ones we have grown so accustomed to, yet completely absent of a centralized power owning the data. Are these types of system the future of social media?

Prepare for the Future

As marketers, engineers, designers, and innovators we must prepare for this important shift in computing and digital culture. We must embrace new systems and technologies, and thrive on the innovative opportunities they provide. The web is growing up and perhaps growing apart, but in a way this decentralized network of networks can bring us closer together. A community of communities driven by like-minded individuals and brands they trust, support, and show loyalty to world of transparency.

We’re looking to add additional partners to explore these exciting possibilities. Reach out and let’s see how we can reinvent the way your business thrives in this brave new world.