Jamie Tolentino is currently working as a Digital Marketer at a Global Asset Management firm. She was previously an Innovation Strategist at Jamie Tolentino is currently working as a Digital Marketer at a Global Asset Management firm. She was previously an Innovation Strategist at Quirk London. Aside from writing for TNW, she also blogs on the Huffington Post UK.
The online advertising model is far from perfect, in fact, it is broken. From a consumer’s point of view, they get served way too many ads on overcrowded banners or in their spam box. From a business’s point of view, the ads are too pricey.
Businesses currently pay for ads on an “impressions, views and click” basis. This means that large online advertising companies like Google, Facebook and Amazon are not motivated to optimise for a conversion, which occurs when a customer buys the product. They are instead driven to maximize their own profits by increasing the price of desirable ad placements and click-through rates. However, what would justify a return on investment for the business would be paying for it on a ‘conversions’ basis.
Furthermore, there is no guarantee that the traffic to the ads are genuine because nearly 50 percent of all advertising traffic are generated by bots. The result is that ads have low conversion rates, hardly justifying a return on investment. This makes up an ad network model that defeats the point of advertising because the businesses spend significant portions of their marketing budgets on ad impressions, page views, and click-throughs which only loosely translates to business sales or customer value.
Getting rid of the middlemen
BitClave argues that an advertising model comprising large online advertising companies as “middlemen” is not only unnecessary but potentially detrimental to business value and reputation. It would be more beneficial for customers and businesses to directly connect in mutually beneficial market activity throughout the entire promotion-to-purchase value chain.
For example, a business could only choose to advertise discounts to new customers who are interested in buying their products. The business benefits by not wasting advertising dollars on uninterested customers while the interested customers benefit by getting a cheaper product.
To enable this to happen, the next logical evolution in advertising is to use blockchain technology. Blockchain is a powerful emerging technology that enables mutually distrusting parties like businesses and customers to engage in mutually beneficial co-enterprise without the requirement of a central authority, or a middleman. BitClave believes that a blockchain-based system is well suited for enabling an ad model that redirects promotions to reach customers who are genuinely interested in the products being sold.
BitClave offers this service through their BitClave Active Search Ecosystem (BASE). BASE offers a decentralized search solution which enables big and small companies to participate in an open ecosystem. Decentralized search is achieved by supporting distributed, customer-driven data like customer profiles, search preferences and interests collected in an anonymized activity ledger.
Activity anonymization is done in a way to that allows only authorized parties to attribute multiple activities to the same customer. For all other parties, the data is not attributable to specific individuals (or linkable beyond certain lengths of times). This gives the customer control over what and who they share their data with.
BASE also cuts out traditional hurdles found in digital advertising like privacy infringement, untrusted sources of data and expensive third-party ad networks.
There are several search use cases that would particularly benefit from BASE.
# Lawyers and legal advisors
Each legal case can widely differ from another so sharing personal data can be critical in finding the right professional for the job. As each individual case is full of nuanced information, it’s challenging for prospective customers to communicate all the important details. It’s also difficult for the lawyer to have enough information to make informed decisions, especially in the early stages. In these situations, personal data can help legal professionals determine if they could be a good match for the potential client.
Since BASE supports the ability for a user to post personal information and transaction history in a protected way, the user can later choose to share selected information with a potential legal professional. If particular user data would be useful to the legal professional, the user can choose to reveal it to them, without revealing it publicly. This allows legal professionals to target more relevant clients and personalize offers to them.
# Educational degree programs
Educational institutions operate in a crowded marketplace where they seem to promote similar features and benefits. Therefore, it can be difficult for a potential student to discover which school is the best fit. In the current advertising model, the largest universities with significant advertising budgets can outbid smaller institutions for advertising space. As a result, these smaller schools lose opportunities to connect with students who might be a perfect match for their community.
Let’s take the example of a student who is about to graduate from high school and is interested in a Biology program at a university near their home town. The traditional ad model will show them universities that spend the most money on advertising. On the other hand, BASE well use information already stored privately in their BASE profile to guide potential university admissions coordinators to respond to their search with details of the relevant Biology program. Unlike third-party networks, BASE creates more relevant connections between the student and degree program based on the ability to selectively share the most relevant information for the search.
# Job search
Similar to the use case of matching students seeking to further their education, BASE can be used as a job search platform. Job seekers can use the BASE decentralized search platform to search for employers, while employers can find potential employees with particular skill sets.
BASE can also be used as a sort of “reverse job search”. Job seekers can anonymously post their job interests and core skill sets, and subsequently allow employers to target particular job seekers with a custom-designed position tailored to fit both the needs of the company and the unique skills of the employee. This is particularly useful in highly technical jobs as traditional job search boards in this sector have generic job positions such as “Software engineer” which can lead to high turnover rates within the company.
Introducing the consumer activity token (CAT)
On top of this distributed activity data collection system, BitClave is introducing a token, called the BitClave Consumer Activity Token (CAT), to be used internally within the BASE ecosystem among the participating parties. CAT tokens will be used to facilitate rewards within the system for a variety of services available in BASE.
For example, a business may be offering a product that two customers, X and Y are potentially interested in. If the business asks for additional information, and only X responds, the business may choose to reward X with a CAT token as an offer as they find that X is more likely to convert into a sale.
In summary, BitClave tries to fix the broken ad model with a blockchain powered platform that enables businesses and customers to interact without the need for intermediaries. This makes online advertising more relevant, effective and cost efficient.
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This post is brought to you by The Cointelegraph and shouldn't be considered investment advice by TNW. Yes, TNW sells ads. But we sell ads that don’t suck.