Basic Attention Token - The Future of Advertising

Sep 17, 2019 5:15:20 PM

shutterstock_796168411.jpgAdvertising. Almost every business depends on it, in some form, as a major (if not primary) marketing tool. And for some companies—in fact, some entire industries, such as broadcast media and print journalism—advertising is the main source of revenue. Google could hardly fund its wide-ranging initiatives and services without the money it rakes in from online advertising.

However, there are lots of reasons to hate advertisements, particularly online ads.

  • Ads can be annoying. From radio and TV ads in which people shout at you, to online ads that automatically start running audio and video (great fun at the library or in a staff meeting!), some advertisements seem designed to irritate.
  • Online ads take time and bandwidth to load. By some estimates, over $20 of the average mobile subscriber’s monthly data allotment goes just to download advertisements. On many sites, the amount you pay in bandwidth costs to download the advertising dwarfs what you pay to download the actual content.
  • Advertising takes up precious screen real estate—sometimes all of it, on mobile devices.
  • Many sites serve up “trackers” along with their advertisements. Trackers are essentially browser cookies that track your browsing and search history and report this data back to advertisers so they can throw more targeted advertising your way. Many consider this a serious privacy issue.

So, it’s no surprise that an increasing number of people around the world—reported in the hundreds of millions—rely on ad-blocking browser extensions and other tactics to protect their privacy, bandwidth, and screen real estate.

A “Brave” New World for Online Advertising?

This state of affairs is causing problems for advertisers, who are seeing less return for their advertising dollar; publishers, who can’t charge as much for ad space as a result; and end users, who eventually will have to pay directly for content or go without if content providers’ ad revenue dries up. A new model is needed, and some pretty smart folks think they’ve figured it out.

Their idea is based on blockchain technology—the same distributed-ledger technology that underpins cryptocurrencies such as Bitcoin and Zcash. Unlike cryptocurrencies, which can be used to buy products and services, the unit of exchange envisioned for this solution involves something called a basic attention token.

Technically, a basic attention token (BAT) is a blockchain token that follows the Ethereum ERC20 standard. (Ethereum is a provider of of general-purpose blockchain technology.) BATs are more like rewards points than like money. Here’s the basic idea:

  1. An advertiser buys BATs on a public exchange, similar to the way one can buy Bitcoins.
  2. A publisher serves the advertiser’s ads along with its own content, as usual.
  3. The end user’s browser calculates how much attention the user is paying to the advertising.
  4. Both the end user and the publisher receive some of the advertiser’s BATs according to how much attention the user is paying. The transactions are conducted on the underlying blockchain. Thus, the end user is rewarded for viewing the ads and the publisher is rewarded for publishing compelling content.
  5. End users can exchange their BATs for premium content or other services from the publisher, or can donate their BATs to the publisher.
  6. The publisher can cash in their BATs on the public exchange, thereby obtaining revenue.

Perhaps best of all, no trackers are involved and there is an “anonymity shield” built into the scheme so that the advertiser and publisher can’t trace the attention to a specific user.

The Catch

This all sounds good, but there are a couple of caveats:

  • The framework is still in its infancy. Although its backers are well-funded and claim that most of the infrastructure to make the system work is in place, there is still some development needed to complete the picture.
  • At present, only one browser supports this idea, and it’s one you’ve probably never heard of: Brave. Brave’s developers designed the browser with privacy in mind from the ground up; it can natively block ads and trackers without having to install browser extensions. From a BAT standpoint, the Brave browser calculates the user’s attention on the basis of a complex formula that is not yet in its final form. It’s not clear whether other browsers or extensions would have to use the same formula.

That said, if this idea gets some traction, it could radically change the dynamic for online advertising. It could represent a win-win for everyone in the ecosystem: advertisers, publishers and end users. Stay tuned—it will be interesting to see how this idea unfolds.

Abdul Dremali

Written by Abdul Dremali

Head of Marketing & Innovation - Abdul is currently leading research & development in Artificial Intelligence, Machine Learning and Augmented Reality at the AndPlus Innovation Lab. Abdul also is the Head of Marketing at AndPlus.

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