As we get into the swing of things after a beautiful Greek summer, I thought I’d touch on a topic that has been on my mind for some time now.
Fifteen years ago, adtech was near and dear to my heart and today I will talk about how crypto may save the day in an industry that is going through some radical changes.
I am sure you’ve heard, that third-party cookies are coming to end.
Let’s start with a little bit of history. During the web2 era, you didn’t have any control over your data or how it was stored. Companies would track and save your data without your permission.
How did they do it?
With cookies, a small piece of information would tag us, our browser to be exact, and track us on the web — within a website or across a network of websites.
At first, big tech (FAAMG) only had data about what we did on their sites, from the first-party cookies they served us. But that was only a snapshot of us who we were. They need more data to create our complete profile. So they took the logical next step and rolled out ad networks and got every site on the planet to serve their cookies (a site would serve third-party cookies on behalf of Google, Facebook, and others) in return for a percentage of the ad dollars they were getting paid from advertisers.
With that, they had the whole enchilada, everything —who we were, where we’ve been, what we’ve seen, what we purchased, and how much we spent. Not only that, but with mobile phones in our pockets, they could track our behavior, location, and spending habits, and combine our digital profiles with our real-world data. All our little secrets were available to them. They knew exactly who we were and as we searched and browsed, they knew exactly what we were thinking. They took all that data, packaged it, and gave advertisers the tools to slice and dice it and target us with ads. In return, they became trillion-dollar companies.
Last year, just Google, Facebook, and Amazon made over $352 billion from advertising, thanks to our data. The global data broker market is expected to reach a whopping $345 billion by 2026.
They sold our data and became rich. What did we get out of this?
A good experience, relevant and personalized information — some say that we may even be influenced in ways we were not aware of through our feeds and search results. It seems like everyone else did all the heavy lifting and they made all the money. The information we searched for was created by website owners and the content we shared on social media was created by us.
Last year, Apple and Google started phasing out third-party cookies and the GDPR and CCPA are leaving advertisers no choice but to adapt to a world where data practices are transparent.
Advertiser Perceptions’ latest analysis suggests that campaign performance will drop when cookies are deprecated next year, anywhere from 17-27%. As you can imagine, this is pushing advertisers to ramp up their investments in first-party data and other alternatives.
One of those other alternatives is NFTs.
NFTs are cryptographic assets on blockchain with a unique identification code and metadata that distinguishes them from each other, making them unique. An NFT is a digital record of ownership for an asset — for real-world items like artwork and real estate, or purely digital items like the Bored Ape collection. NFTs are not money, they are tokens that are 100% unique. NFTs are programmable and they can execute predetermined commands set by the issuer, letting the issuer earn money. NFTs will probably be the representation of our physical selves in a digital world. Now everyone will know if you’re a dog or not ?
We’ve all heard of NFTs and art and some of the crazy amounts people have paid to buy one. But people are working on many different applications that involve NFTs. Some developers are working on projects that would let us sell our healthcare data to drug companies to cure diseases. Snoop Dogg wants to use NFTs to recreate music creation, and distribution and change how artists get paid. NFTs could power almost anything where authentication is a requirement, and be the “keys” that make our logins and transactions secure and transparent.
I am sure you’ve already figured out what I’m getting at.
Data is the most precious commodity of our time, yet we’ve been giving it away for free. The question is not whether big tech delivers value. The question is whether the economic exchange is fair or not.
But, NFTs can shift the balance of power in our favor.
Each one of us is a factory that continuously produces data — different kinds of data — every minute of the day. By turning the data we emit into NFTs, we can track, manage and sell our data to the highest bidder.
While NFTs in their existing form are leading the conversation for brands who are looking for ways to connect directly with their customers, there may be a wider application for this technology in the advertising ecosystem.
In web3, adtech will not center around massive databases and try to squeeze huge margins out of them, but instead, it will provide a benefit to the users, publishers, and advertisers.
We own our browsing data and we will be able to make all of it or part of it available, to anyone we choose, on an exclusive or shared basis, and charge a price for it.
The Brave browser is the perfect example of a technology that let users get paid and be part of the value exchange. Brave is ad-free and allows users to browse without ads. It doesn’t collect or store any browsing and personal information and users can opt to see ads and receive rewards to their crypto wallets, for their attention — BAT tokens (1 BAT is around $0.35).
There are a lot of companies going after this space. An article in VentureBeat from 2019, shows there were 290 companies, with the number of companies growing 13x in 18 months.