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A radical solution for broken digital advertising

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Introducing the first global ad platform built on privacy
that works for users, publishers and advertisers

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A radical solution for broken digital advertising

  1. 1. © 2019 Published by WHITEPAPER A radical solution for broken digital advertising Introducing the first global ad platform built on privacy that works for users, publishers and advertisers
  2. 2. Summary Digital advertising needs an upgrade. The exponential growth of programmatic advertising has led to a web full of risk and frustration. • It requires users to sacrifice their privacy • It consumes data and slows page loads • It fills the web experience with fraud, malware, and uncertainty Brave and its partners believe there is a better way. They share a vision for an inclusive and rewarding global private advertising platform that: • Respects people’s privacy by design • Gives brands direct connections to users, through which they can provide rewarding experiences • Ensures publishers keep a fair share of revenues • Avoids wasted spend by showing ads only to people who want to see them • Rewards users for their attention This paper will show why the time has come for this big new idea, and how it works.
  3. 3. A radical solution for broken digital advertising | 3 1. Introduction It’s time to reboot digital advertising. Users, publishers and advertisers deserve a system that respects privacy and shares the rewards fairly. Digital advertising isn't working. People have growing concerns about their loss of privacy. They don’t know who can access their data, and they are frustrated by the proliferation of disruptive ads that slow page loads and drain batteries. Meanwhile publishers face diminishing returns from digital advertising – and see their audiences increasingly swallowed up by Facebook and Google. Finally, advertisers face new risks to brand safety. These risks are compounded by increased fraud, malware and uncertainty over where their ads are served – and even if they are seen by real people. Many brands have lost faith in the digital advertising they buy, while being provided with few alternatives. The current ecosystem appears set up to serve the Google/Facebook duopoly, and the hundreds of shadowy intermediaries that take a cut of every click. It’s time for something better. Brave has spent the past two years building a new system with the participation of leading publishers including The Washington Post, Dow Jones, The Guardian, Vice and Slate – and privacy-minded partners including Qwant, DuckDuckGo, Uphold, Tresorit and TAP. This alliance has created an alternative approach to monetizing content, which invites users to opt in to see ads that are private and rewarding. Brave monitors user attention locally, and uses machine learning to match ads directly on the user’s device. This process is private by design. Brave puts a smart ad server directly in the smart device. So, under this new system, personal data about the viewer stays local. It will never be shared with publishers, advertisers or other third parties. Meanwhile, all parties participate in a fairer division of rewards. Users can receive up to 70 percent of the ad revenue (depending on where ads are shown). The system allocates rewards in Brave’s own blockchain-based Basic Attention Token or BAT. Users can spend the tokens with the publishers they like best. Brave and its partners believe this alternative system can start a new era for digital advertising.
  4. 4. 2. What’s wrong with the current digital ad system? 4 | WHITEPAPER Privacy, malware, fraud, duopoly… how the dominant programmatic model fails users, publishers and advertisers. USERS It's hardly controversial to claim that users are frustrated with programmatic digital advertising. They are deeply worried about privacy intrusion, and resent ads that slow down their connections, consume their data and drain their batteries. They have expressed their dismay by downloading a myriad of ad blockers. More than a quarter of US internet users now block ads, says eMarketer, up from just under 16 per cent in 2014. However, on many sites catering to more tech-savvy users, the numbers using ad blockers can reach 50 percent. PUBLISHERS In the current digital ad climate, advertisers find it easier to reach large targeted audiences via Google and Facebook than on thousands of smaller publisher sites. This helps explain why the aforementioned digital giants utterly dominate the market. According to eMarketer, Google and Facebook earned around $65 billion from digital ads in the US alone last year. That's a 58 percent market share. And this dominance has become self- perpetuating: as advertisers choose YouTube, Facebook, Instagram et al, publishers move their content to these platforms, and users stay on these platforms for longer. Clearly, publishers have taken a huge financial hit as content has gone digital. And even those who have maintained their audiences face the prospect of a 'race to the bottom' in the prices paid for clicks. In a 2018 programmatic ad study by Digiday, US publishing executives said pricing was their biggest concern. ADVERTISERS In any ad system that pays out on traffic and attention, one obvious question arises: how do you know the traffic is genuine? Hackers exploit this uncertainty. They use malicious bots to produce bogus websites that fool advertisers. They install remote-controlled software on compromised PCs that siphon billions of dollars each year from the ad industry. A 2016 study by WhiteOps estimated that bots inflict $7.2 billion in damages to digital advertisers per year. The World Federation of Advertisers says ad fraud could cost advertisers $50 billion a year by 2025. Many advertisers are also questioning the fundamental promise of programmatic advertising: targeting. The system can be clumsy, such as when people are frequently shown ads for products they have already purchased. Finally, when programmatic algorithms make decisions about where ads are placed, the results can be disastrous. Many brands have faced PR crises when their ads have run alongside inappropriate content, for example. • More than a quarter of US internet users block ads (eMarketer) • Up to 50 percent on average of a user’s mobile data is consumed by ads and trackers (New York Times analysis; Pew Research Center and comScore) • Large media sites host as many as 70 trackers. • Google and Facebook earned $65 billion from digital ads in the US alone in 2018 (eMarketer) • Bots inflict $7.2 billion in fraud a year (WhiteOps)
  5. 5. A radical solution for broken digital advertising | 5 3. How Brave's system fixes the problem For all the flaws in the current system, the truth is: consumers do accept advertising. They know it is necessary to fund great content. As such, they will happily view ads from brands as long as they can opt in to see them. Even more so when the ads are relevant and privacy- respecting. Meanwhile, publishers and brands need fair and reliable digital advertising. They know there’s a limit to how many paid services consumers will support. Brave believes it is well-placed to take action on this issue. It designed its flagship browser product with privacy in mind. Today, the browser has an audience of five million monthly active users – and growing. Brave contends that its browser can tackle the big challenges of digital advertising. Here’s how. USER PRIVACY The Brave advertising platform asks users to opt in. It then monitors their browsing habits to see where their attention goes. It uses this information to show them relevant ads. However, all the targeting is done inside the browser. Publishers and advertisers never know anything personal about the viewer. And neither does Brave Inc. TARGETING Initially, Brave's system will infer a person’s interest in ad-related subjects from the content of websites they visit. It will calculate an ‘Attention Value’ for the ad based on duration and pixels in view in proportion to relevant content. Finally, it will anonymously match ads and customer interests, using local machine learning algorithms. THE GOOGLE/FACEBOOK ISSUE Advertisers favor Google and Facebook because they believe they can better target users on these platforms. However, in practice, the targeting is not always accurate. For example, in 2016 Facebook was revealed to be inflating the average viewing time for videos on its platform. Brave’s system returns highly accurate targeting to every participating publisher.
  6. 6. 6 | WHITEPAPER * Mobile Roaming: Regulations, Opportunities & Emerging Sectors 2017-2022 — Juniper Research REVENUE-SLICING PROGRAMMATIC THIRD PARTIES There are hundreds of intermediaries in the current ad ecosystem. They are the companies that decide which person sees which ad when a click or page load happens. These third parties take a cut of revenue from every ad served. That means less revenue for the publisher and higher costs for the advertiser. In Brave’s system, there is no role for these intermediaries. Brave itself manages all the ad serving, data management and publisher negotiations. BOTS/CLICK FRAUD Brave’s browser already blocks conventional ads and trackers by default. This reduces the ability of nefarious firms to smuggle in malware and bots. And for the new ad system, Brave plans to mitigate possible ad fraud with cryptography, better client-side integrity, and transparency achieved through the project being open source. INCENTIVES (USER REWARDS) How can any digital ad system defeat the historic reluctance of people to engage with ads? Brave’s system has three answers. First, users voluntarily opt in. This provides a self-selected group with a positive attitude to ads. Second, it accurately tracks user interest, so ads should be genuinely relevant. Third, the system rewards all users financially. It will pay them up to 70 percent of ad spend (depending on the placement) using Brave's own blockchain-based token, BAT. How the new system works: A user walk-through 1. A Brave user opts in to agree to see ads 2. As she browses, she will occasionally see pop-up notifications from relevant advertisers 3. When she clicks on an alert, she will be redirected to a private tab showing the ads. These ads do not merely replace the banners on websites. 4. She can customize her settings to determine how often she sees these notifications. 5. She can check her BAT wallet inside the browser to see how much BAT she has earned from watching ads
  7. 7. A radical solution for broken digital advertising | 7 4. Who is participating? Brave's challenge is to build support among its stakeholders. It has already made progress. USERS More than five million people browse with Brave every month on mobile and desktop. More than 10 million users have downloaded the Android version. In summer 2018 a small group of testers trialled the ad/rewards system through the beta and dev builds. Brave expects to roll out the service to all Brave browser users in 2019 on both desktop and mobile platforms. PUBLISHERS Over the last two years, Brave has worked on building its new system with privacy-minded partners such as, Qwant, Uphold and Tap. But in theory any publisher and even individual influencers/creators can participate in the program. By December 2018, Brave had confirmed the support of 28,000 verified publishers, and potential access to 47,420 total publishers. Brave is also lining up major brand advertisers eager to participate in the rollout of the first global privacy-respecting ad platform. REWARDING USERS AND PUBLISHERS: THE BASIC ATTENTION TOKEN Brave's new ad system depends on two crucial components. It has to: • Monitor user attention accurately • Distribute revenue fairly To meet these important requirements, Brave created its own blockchain-based Basic Attention Token (or BAT for short), which is based on the Ethereum Token Standard. It's easiest to think of BAT as a token that represents user attention. This makes it an ideal unit of account between advertisers, publishers and users in the Brave system. Naturally, BAT can be bought, sold, and exchanged into fiat money like any other blockchain-based token. Users can accrue BAT and keep it in a dedicated wallet inside the Brave browser. They can reward their favorite content creators or spend on premium content and services. The Brave ad system: the story so far Brave launched its BAT token sale in May 2017 as the first stage of creating its new vision for a privacy-respecting ad ecosystem. A year later, it began showing 250 pre- packaged ads to a small number of trial users. In January 2019, Brave gave anyone using the developer version of its browser the option to see privacy-respecting ads. The service will soon be live to all users. In the first phase of the rollout, users will receive 70 percent of the ad revenue, with Brave receiving the remaining 30 percent. In the future, Brave will extend the system to its initial 28,000 verified publishers and creators. They will be able to feature private ads on their sites or channels. When ads are displayed inside a publisher’s content, the publisher will keep 70 percent. Brave takes 15 percent and the user keeps 15 percent. The system allocates rewards in Brave’s own blockchain-based Basic Attention Token or BAT. The solution will eventually be available across all digital devices, PC, Mac and Linux computers, Android and iOS phones.
  8. 8. 5. In summary Brave and its partners are ready to reboot digital advertising with the first global ad platform that respects the privacy of users, delivers value for advertisers and rewards publishers fairly. Please visit Brave at at MWC19 Barcelona in booth 8.1A67 near the main entrance to hall 8.1. To contact us ahead of time to arrange a meeting email us at bizdev@brave.com. Media requests can go to press@brave.com.
  9. 9. A radical solution for broken digital advertising | 9 © 2019 Produced by the mobile industry for the mobile industry, Mobile World Live is the leading multimedia resource that keeps mobile professionals on top of the news and issues shaping the market. It offers daily breaking news from around the globe. Exclusive video interviews with business leaders and event reports provide comprehensive insight into the latest developments and key issues. All enhanced by incisive analysis from our team of expert commentators. Our responsive website design ensures the best reading experience on any device so readers can keep up-to- date wherever they are. We also publish five regular eNewsletters to keep the mobile industry up-to-speed: The Mobile World Live Daily, plus weekly newsletters on Mobile Apps, Asia, Mobile Devices and Mobile Money. What’s more, Mobile World Live produces webinars, the Show Daily publications for all GSMA events and Mobile World Live TV – the award-winning broadcast service of Mobile World Congress and exclusive home to all GSMA event keynote presentations. Find out more www.mobileworldlive.com Disclaimer: The views and opinions expressed in this whitepaper are those of the authors and do not necessarily reflect the official policy or position of the GSMA or its subsidiaries. About Brave Brave is on a mission to fix the Internet with the first global ad platform and browser to respect users’ data and privacy. Brave is much more than a faster, safer browser. Brave is a new way of thinking about how the web works. It blocks ads and trackers while providing support for content creators through blockchain- based rewards and safe ads. And the company is positioned at the center of a broad ecosystem of privacy-minded Internet pioneers, who together are creating an entirely new web experience. About Brave’s MWC Partners: Qwant Designed and developed in France, Qwant is the first European search engine to have its own Web indexing technology, which protects the privacy of its users by refusing any tracking device for advertising purposes. Qwant does not install any cookie on the user's browser, does not try to find out who it is or what it does, and does not keep a history of the requests made. Qwant makes it possible to efficiently find the information sought on the whole Web and social networks, while respecting a total neutrality. Qwant treats all sites and services indexed without discrimination, without changing the order of the results according to its own interests or the sensitivities of the user. Uphold Uphold is the creator of an open, trusted and transparent digital money platform that lets users quickly and safely access traditional currencies, cryptocurrencies, and other investments all in one place. Uphold has powered over $4 billion in transactions for over 1 Million members across for 184 countries, more than 30 supported digital and traditional currencies and four commodities. The Uphold platform provides access to a wide range of currencies and investments available in one place, with transparency and security. Uphold is the only company to publish real-time reserve holdings. TAP Network TAP Network is a decentralized marketplace for consumer data and rewards. Consumers share their data anonymously via blockchain, and get rewarded in TAP digital stable-coin, for credit card purchases at across 200,000+ top hotels, restaurants, and retailers around the world. TAP Network white-label offerings power rewards and data sharing in top apps and web experiences, driving consumer loyalty and competitive insights for global brands and corporate partners. Tresorit Tresorit is a Swiss cloud encryption company offering a secure and user-friendly file sync and sharing service. Due to its revolutionary encryption technology, Tresorit provides a trustworthy cloud for businesses, which matches the security of an on-premise file server combined with consumer-grade simplicity. Tresorit’s built-in, zero knowledge end-to-end encryption protects user files from data breaches and any form of unauthorized access, and enables organizations to work and collaborate safely in the cloud. Founded in 2011, Tresorit is now trusted by more than 25.000 customers globally, including leading enterprises both in Europe and North America.

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