Ads posted on a billboard
The future of advertising doesn’t have to suck. And that’s more than a little bit surprising.
In the future, you only see ads for things you care about. You’re paid for your attention, and that payment has real value. In the future, advertisers negotiate directly with publishers, not through five or six layers of separation, all taking a nickel or dime from each ad dollar. Negotiation is automated, or it can be if desired.
That future is now.
Brave Software, founded by the inventor of the Javascript programming language, and NYIAX, an advertising marketplace built on Nasdaq technology, just announced it. Brands can now choose to show ads only to people who have specifically requested them. People earn tokens for viewing ads. Brands know with absolutely certainty when people have viewed or clicked on their ads, but people do so in complete privacy.
This is, in some ways, the exact opposite of the wild, wild west majority of the current ad ecosystem, where fraud is rampant, people block as many ads as possible, and advertisers try to track people around apps and websites to see if they’re clicking on ads and converting on offers.
If it’s the opposite, that’s exactly according to plan.
“With Brave and the Basic Attention Token, we’ve tried to take the ads and the technology behind ads that people don’t like, and clean out all the bad things, the tracking, the sort of parasites, the high fee extraction from the middle players, and simplify the system to the minimum required components,” Brave CEO Brendan Eich told me recently on the TechFirst podcast. “The problem is that those ads depend on tracking, and the super powers like Google that came to dominate tracking, came to dominate the terms of the ad deals. They came to dominate everything about your digital life.”
Brave is a browser, just like Chrome or Safari or Firefox. But in Brave you can opt into ads rather than attempt to opt out with an ad blocker, as huge percentages of people are doing elsewhere. It’s privacy safe, so even though advertisers know someone’s engaged with their ads, they can’t track you around the internet.
And consequently, it has almost unbelievably high click-through rates.
Average web click-through rates are often well under 1%. Just about the highest-intent property, Google, sees clickthrough rates of under 1% on search results on Google.com, and just .35% on display ad around the web.
But ads on Brave average a 9% click-through rate — almost unprecedented. Some brands get up to a 15% click-through: basically off the charts. Brave is still small — 15 million regular users — but it’s growing fast.
Ad clicks just ticked over a billion, up 930% from October 2019.
And that inventory is now accessible via safe, secure, guaranteed, and blockchain-based contracts, thanks to NYIAX.
“We do believe in the future of advertising,” NYIAX co-founder Carolina Abenante told me. “We built NYIAX to be basically a full compliance engine for upfront and option-based transactions for advertisers, agencies, and … publishers. What we want … is for the consumer to have the most high value sorts of ads that they want to have. So that’s going to inherently increase the click-through rate and it makes advertisers extremely happy.”
So advertisers can come to NYIAX and reserve future inventory of ads shown on websites viewed in the Brave browser. The kicker: those ads are only viewed by someone who has opted in.
And opting in has its rewards, says Eich.
The rewards come in the form of a cryptocurrency, BAT: the Basic Attention Token. 70% of the cost of ads that Brave sells accrues to users who opt in to see ads. Most of them, Eich says, donate their BAT to websites or creators they like, such as The Guardian, The Washington Post, Vice, or Quartz. According to a third-party website, Bat Watch, over 800,000 BAT worth over $200,000 has been given to various publishers.
Most, seemingly, are individual creators on YouTube or Twitch.
While you’re earning BAT by viewing and engaging with ads, however, you’re not sacrificing your privacy.
“When you use a search engine and a browser, or when you navigate from one page to another you click on a link in a search result, the conventional model has been … to track you,” Eich says. “But once you click away, you don’t expect them to follow you any more than when you’re shopping at the grocery store to have a flyer sort of detach itself from the window of the store, fly to your car, stick on the roof, come to your house, get inside and keep spying on you.”
On Brave, that’s not possible.
There’s no server side data, because there’s no server side.
All personal targeting data stays local on your own software on your own device. Ads come to Brave, but the targeting happens locally, so you only see that ones that are relevant to you, if you’ve opted in. That’s a sea change, because it puts the user in charge of essentially 100% of the advertising they see, compared to basically zero percent that most have now.
“The user is in control of what kind of ads they wish to receive,” says Abenante. “So it moves into being a third party ad serving system to one that is more first party.”
That is of course interesting for marketing measurement.
Advertisers typically want deterministic measurement: an exact accounting of who saw their ads and what they did as a result of seeing them. People, on the other hand, would be happier with no measurement at all — perfect privacy — or probabilistic measurement: essentially hiding in the school of fish so they can’t be counted and targeted individually.
Brave, essentially, has both: a hybrid system.
“You will not need to see individual linkable events that can track one person across the web if you’re doing this right,” Eich told me. “You’ll see the deterministic part in the local agent, in the browser or the app. [Advertisers] will see reporting and some ability to forecast that is probabilistic, necessarily probabilistic, but it doesn’t yield re-identification of individual users.”
I can’t say that Brave is a perfect system.
In removing a lot of what is horrible about the current ad ecosystem — the tracking and the privacy violations — it also basically blocks a lot of ads. And while users can choose to collect BAT and donate it, according to Bat Watch, most of that is going to individual creators, not major websites or news organizations.
That means they’re missing out on revenues.
However, Brave and NYIAX are showing the way towards a more fair and mutually-respectful ad ecosystem, where advertisers, publishers, and people can engage with each other on a level footing. Adding in some level of required BAT contributions to pages people visit frequently would help compensate those publishers. Ads matter, after all: most of the platforms most of us use daily are free, thanks to advertising.
And, Brave solves much of the problem of data safety that no amount of regulation, even GDPR, has been able to really adequately resolve yet.
“People say data is a commodity, it’s like oil,” says Eich. “No, it’s very personal, it’s very contextual, and it has a shelf life.”
In an increasingly digital world, we are our data, in a sense. Being able to manage that is, generally, a good thing.