Blockchain technology will disrupt online advertising by giving us back control over our personal data.
Something went wrong with the internet we all use today. It didn’t seem too problematic at first when Facebook and Google collected our personal data to find out if we were interested in skiing and offer us the best deals as the season approached. But in recent years, when scandals such as the Cambridge Analytica revealed that our personal data was being used to “micro-target” voters and influence our political views, for example, we began to grasp what all the fuss about our personal data was actually about.
The 200 billion-dollar per annum online advertising industry is the lifeblood of the internet. Back in its early days, Google actually struggled to find a business model that would allow it to make money from online searches. Ultimately, it went for an ad-based model and was soon followed by Facebook and the internet’s other big tech firms. Facebook and Alphabet (Google’s parent) went on to rely on advertising for, respectively 97% and 88% of their sales.
Yet, when privacy breaches and data scandals made people take a step back to rethink about how the tech market actually works, we all became more aware that we were actually paying a high price for our seemingly “free” online services. It took all of us time to wrap our heads around this idea because the currency we were paying with, didn’t seem to hold any value for us. We all ‘paid’ by giving away our personal data, apparently useless information about our gender, shopping preferences, social connections and the likes, which really didn’t seem to matter much to most of us.
This model led Facebook and Google to go on to become databases on a planetary scale, collecting troves of (free) data and using them to become more effective at identifying customers, anticipating their needs and enticing them to spend money. For these giants, our insignificant personal data was crucial for ‘feeding’ their ad-based business model. In general, the more information they could get, the better they could target their ads and the more they could charge for them.
Why it was so difficult for us to think of our personal data as a real asset, even though most of us understood the tremendous value it produced for these tech giants? Probably because from the very first days of the internet, we were never able to safeguard or monetize it, so we never quite developed a sense for its real value. Our network’s architecture ‘educated’ us to dismiss the privacy of this information, simply because it made our lives way more convenient if we simply agreed to give up this data, and eventually, giving you free products, always leads to higher conversion rates, in this case- higher and faster adoption of those free products. As the old saying goes- Its the economy, stupid!
The current infrastructure of the World Wide Web makes it very easy to copy, spread and use digital content and very difficult to maintain rights or ownership over it and this creates a general problem for safeguarding intellectual property online. We could view personal data as one form of intellectual property, but one that we never felt that we could actually use or gain anything from.
The seed of the data revolution came with the introduction of bitcoin, but very few people noticed it. With bitcoin, blockchain technology actually demonstrated that it offered a new tool that enabled items of value to be both digital and verifiably unique. It offered a way for any form of value to be represented on a blockchain ledger as an entry in a blockchain transaction and nobody could ever alter or “double-spend” it. This is because one of the key features of blockchain ledgers is that they are immutable to change.
The immutable, distributed and transparent nature of blockchain technology enables the digitization of new forms of value. These forms could be cryptocurrencies, but they could also be videos, music tracks or… our personal data. And while these digital assets will be encrypted and protected, they will not be kept on a single central company-owned server but in a public decentralized network. The huge business potential behind this opportunity is easy to understand with this simple question: if you could easily control your personal data and decide whether the likes of Facebook, Google, and others get to exploit it for profit, you would, right?
Blockchain technology opens up the opportunity to introduce new software for managing the economy that operates around our new ‘digital assets’. When each one of us will be able to control their own personal data, surf the internet anonymously and manage which sites get to access it, the old relationship between the online advertising industry and the consumers it serves will have to be renegotiated.
By giving people a way to monetize their personal data and sharing the massive revenues that the ad-tech giants consume, Blockchain technology will dramatically influence the very basis of the data-based online advertising industry. New, more participatory, models for targeting and communicating information between people and organizations online will gain ground while old, centralized solutions will have to find a way to reinvent themselves. The future will be based on new technological solutions that are based on rewarding participants for their data and pro-active online behavior.
The future holds many disrupting promises, and we are going to see new methods for communication breaks through while the best of them will be based on transparency, of code and information, and new economic models, less greedy, more egalitarian, helping the redistribution of wealth to enter a new phase in history.
About the Author:
Erez is the the Co-Founder, CEO of 2key.network
2key’s Blockchain technology is re-inventing the link by fusing smart-contracts into regular HTTP links, embedded with groundbreaking multi-step tracking protocol.
We are building the 2key network, where online sharing is fairly rewarded!!
