The online advertising industry isn’t going anywhere. But it needs to change if it’s going to work for all of us.
Advertising online is coming to an inflexion point. Something will have to change, but it’s unclear at this point whether that change will entail a fundamental shift in direction, or a return with a vengeance to the existing trajectory.
Advertising like it’s 1999
Online advertising is almost as old as the internet itself. Anyone who remembers browsing the web in the mid 1990s will recall those invasive pop-up ads that could multiply across the screen faster than it was possible to click the mouse to close them. It was a rudimentary strategy but, the web being at a similarly early point in its evolution, it did the job.
Today, some 25 years later, both web users and advertisers have become far more sophisticated. Advertising is more subtle, perhaps – it wouldn’t be hard – but it’s also smarter. Rather than bombard the user with essentially random ads, today’s advertisers harvest every detail they can about you and deliver highly targeted adverts, thereby maximising the chances that you will click on one. As the web has grown, more and more sites are supported by ad revenues – including some of the most popular like Facebook.
How advertising hasn’t changed is in its fundamental philosophy: that web users are there to be served ads, which they will passively and unthinkingly click, in order to drive traffic and sales to the company in question. The less users consciously engage with the process, the better.
However, people have caught on all the same. They are increasingly resentful of the advertisers’ manipulative behaviour, and of the data that is taken from them without their consent. Ad blindness and Ad blockers are two responses to the problem: the tendency simply to ignore ads on principle, and dedicated software that prevents them from being displayed and from harvesting personal data. Both of these cost publishers many billions of dollars in lost revenues. If the trend continues, some business models will become unsustainable. Therefore, something has to change. The question is what, and how.
Evolution or revolution?
Online advertising is an arms race: a constant competition between advertisers and users to be noticed and to be left alone, respectively. Ad blocking software is a natural response to intrusive advertising; so, too, are the websites that block the blockers and prevent users from viewing their content unless they turn them off. We can expect advertising to become ever more sophisticated and intrusive – and simultaneously ever more subtle – unless something fundamental changes.
Mass Network are offering one such fundamental change. The project, which is a collaboration of cryptocurrency experts, advocates and developers, combines a blockchain wallet with ad blocking software. Mass doesn’t assume that advertisers should or shouldn’t collect personal data, or that web users shouldn’t divulge it. Those questions are left up to the different parties involved. What it does require is that where data does change hands, it does so with the full consent of the owner and at a price set by the market. Users will be able to specify whether they want to see adverts, and the level of personal information they allow ad companies to access in the course of serving them relevant targeted ads. Thus the project aligns the interests of those who are expected to click on ads and part with their money, with those who serve the ads and profit from them. Data is valuable, after all – the ad companies prove that beyond doubt by the lengths they go to in order to mine it. Mass uses a real-time bidding framework to match buyers and sellers and facilitate the efficient exchange of data for funding, so that both sides profit from the deal.
The Mass network will use its own currency for payments, the Mass Coin. The micropayments that will be settled on the real-time bidding framework are the perfect use case for blockchain money: traditional payment systems are far too slow and inefficient. The minimal transaction fees involved mean that the recipient will receive almost all of the money they are paid, with just a tiny slice going to those who maintain the network.
Unlike bitcoin, though, there is a fixed number of Mass Coins: once the coins have been created, there will be no further inflation of supply, so the value should only go upwards, driven by the demand from advertisers who will use the currency to bid for data. One trillion Mass Coins will be created, with 70 percent being distributed to investors who commit bitcoins to the project’s ICO, which will be used for development and marketing. The Mass Network will therefore be its own ecosystem and monetary system. It’s an intriguing example of the way that blockchain technology is developing, and facilitating new kinds of communities and businesses.
Brave new world
Mass is an example of the way that blockchain brings not just quantitative but qualitative change. A few years ago there could be nothing like this – the infrastructure to support it simply didn’t exist, because the existing payment options didn’t work at that kind of small scale. Options like Mass were off the table, and the incumbent systems became entrenched. Thus Mass highlights one possible direction of travel for blockchain application: specific businesses that make use of dedicated payment systems to drive value for their users and investors in ways that were never before possible. Content curation systems, advertising platforms, loyalty programmes – some will share currencies, some will have their own, but they will all be linked through frictionless exchange in any case, functioning like different forms of private money. Some may become more important than that, and find application beyond their immediate ecosystem – perhaps being adopted as broader currencies of payment. Mass is one of the first to see the possibilities of making the free market truly free.