Two Views: Blockchain and the Future of the Internet
From within the “I-COM Data Science Blockchain and Advanced Research Subcommittee,” Sizmek and Brave share their respective visions for the future of Internet advertising. Will free access to content and service be supported by a competitive ecosystem of thousands of third-parties or instead evolve to enable publishers and consumers to exchange value directly? asks, Joshua Koran, Managing Director, Sizmek, in this article co-authored with Luke Mulks, Sr. Ad-Tech Specialist, Brave Software
In April, the global data community convened in San Sebastian, Spain at the I-COM Global Summit 2018, just as the “I-COM Data Science Blockchain and Advanced Research Subcommittee”, released our latest research. The timing of coming together has been particularly relevant for some of us, given our respective vantage points on the industry and the mounting debate on blockchain that we find ourselves inhabiting. So, we decided to put hands to keyboard to share what have been revealed to be somewhat opposing views of probable future states.
You see, over the last year, Sizmek and Brave have been frequently asked about their respective visions for the future of the Internet. At face value, both companies appear to be on opposite ends of the spectrum. Brave began by bringing an opt-in, privacy-by-design browser to market, which for privacy and security concerns, blocks third parties by default. On the other hand, Sizmek’s open advertising stack offers marketers a seamless way to plan, optimize and measure their media, while at the same time encouraging marketers to benefit from the innovative solutions provided by a host of third-parties.
Which of these companies’ perspectives will win? Will free access to content and service be supported by a competitive ecosystem of thousands of third-parties? Will the Internet instead evolve to enable publishers and consumers to exchange value directly? Are third-parties a tax to be eliminated or beneficial market makers to be more widely embraced?
In discussions during the I-COM Data Science Blockchain and Advanced Research Subcommittee, two technologists from each of these companies met to discuss their positions. As is often the case, their respective visions had far more in common than the was at first apparent. The two areas both companies agree upon were the need for improved transparency and the need for additional education about consumer privacy.
Both companies want a transparent Internet. Marketers want transparency to improve the efficiency of their supply chain. This is often perceived as a zero-sum game, where the improved transparency negatively impacts the margins of publishers – advertiser ROI increases linearly with decreases with drops in intermediary and publisher revenues. Yet during our discussions, we widened our perspective to think instead of an iterative game. Disclosing additional information and bringing more big data analytics to media planning can help advertisers shift budgets to new tactics. While the fixed budget may move from a small handful of publishers to a wider set, these publishers’ revenues increase with this shift. In short, transparency, an efficiency of big data platforms (such as the next generation DMPs) and AI-based recommendations can help buyers more effectively engage their target audiences at a much lower cost and often greater reach and performance, by shifting budgets away from the largest publishers to a more diverse set.
Brave too supports improved transparency and a diversity of opinion supplied by a host of independent publishers. This was one of the key reasons behind offering the Basic Attention Token, that enables consumers to pay publishers directly for the Internet content and services they enjoy. Brave also enables consumers to pay publishers indirectly, by opting into receiving ads. In this case, advertisers pay the publishers that consumer visits.
In addition to buyers and sellers of media, consumers also want transparency. These conversations are often closely tied to those of consumer privacy. Two fundamental privacy principles are consumer notice and choice, and both companies have architected their solutions with privacy-by-design principles.
Privacy experts at Sizmek have been playing a leading role in developing both Internet advertising guidelines to protect consumer rights as well as the technologies to support greater consumer notice and choice. Most recently, they have been key contributors to the IAB’s consent manager framework set to roll out in support of GDPR.
Brave too has also been a voice in privacy conversations. As an alternative approach to traditional attribution methods, Brave is working on offering zero-knowledge proofs to associate marketing outcomes (e.g., website conversions) with prior consumer exposure to and engagement with advertising. With a zero-knowledge proof, the consumers’ data remains on their device and is not passed to Brave or other third-parties. Brave acts only as a verifier that the consumer did perform the desired action after exposure to media, without disclosing the identity of the consumer.
Both companies want a robust and competitive Internet, which is in part supported by advertising. The companies differ only on their primary focus. Sizmek focuses on providing consumers an indirect and anonymous advertising-supported payment mechanism, while Brave offers consumers both this option as well as a direct and anonymous payment mechanism.
So what does this all have to do with blockchain?
Not all market participants desire full transparency. Sellers face increasing sales channel conflict with increased transparency. Moreover, many sellers are concerned about the leakage of their data, such as which audiences frequent their websites or the price at which they sell their inventory. Similarly, most buyers do not want to share their marketing plans or prices they have negotiated with their direct competitors. Even value-adding intermediaries are reluctant to share how they use proprietary data to improve their matching of content to consumers. Given the desire of many entities to not publicly disclose their custom data and algorithms, their purchasing tactics and the amounts transacted, it is unlikely that this information will be made available in a publicly viewable blockchain.
What is clear is that the Internet is facing another seismic shift. The first decade was about scaling hardware and software to support the rapid orders of magnitude growth. During this decade the leading companies were browsers and large publishers. However, we saw a diversity of expression and experimentation that was thrilling to behold. The second decade was about innovation and the rise of third-party players. During this decade many of these third-party players pioneered new social interactive services, new devices, and new content formats. During this period the need for centralized search, commerce and communication companies thrived. Now in the third decade of the Internet, we will see whether it develops around centralization (similar to the first decade) or decentralization (similar to the second decade). Whichever direction the Internet develops it will be interesting to see whether consumers prefer a pay-per-view or ad-supported model to engage with each other and the information and services they enjoy.
Co-Author: Luke Mulks is currently the Senior Ad-Tech Specialist at Brave Software, and is a core member of the Basic Attention Token (BAT) team. Prior to joining Brave, Luke was the Director of Ad Products at OAO, where he handled ad product integrations and operations for OAO’s clients, who are among some of the largest media companies and publishers on the web. Luke’s focus at Brave is to apply his expertise from his background in publishing, startups and advertising into the Brave browser and Basic Attention Token platform.