Why People Are Angry With Online Advertising — And How Blockchain Will Help
It’s fashionable to hate on advertising. Over time, it feels like we’ve become more and more jaded towards ads, and less willing to tolerate them.
Online advertising is no exception, and generally ranks among the least popular styles. In fact, a whopping 83% of people view online advertising as a disruptive experience.
But one thing we can be sure of is that online advertising is going nowhere. Last year, online ad revenue hit $88 billion, and seems to rising steadily.
So why does this medium continue to get so much hate? And what can we do to ensure people have a more pleasant relationship with online ads, one that benefits customers and advertisers at the same time?
To answer these questions, we have to look at the current system of online advertising, which is dominated by third parties and giant tech companies.
The problems with online ads
Facebook and Google reign supreme in the online advertising universe. They take a huge chunk of advertising spend, and pretty much dominate the market.
Their model is simple: they collect the data of their users and use it to help ad companies target their advertising more accurately.
The information we share on these sites tells companies a lot about us. It reveals the kind of music we like, our hobbies, our political stances, our fashion tastes, and much more.
Armed with this info, ad companies can target ads to people who will be most likely to respond and buy their product or service.
Unfortunately, while this sounds like a nice method, it doesn’t sit well with customers, for a number of reasons.
For one, the ads are often targeted inaccurately. Because advertisers are forced to go through a third party instead of working directly with prospects and content publishers, the ads are often misdirected. That means users get bombarded with ads they don’t care about, for things they’d never dream of buying.
What’s more, people are angry with the data-collection model. It feels sneaky, an invasion of privacy. Scandals like the recent one with Cambridge Analytica, where sensitive user data fell into the hands of a political consultancy firm, confirmed Facebook users’ fears that their data was not being managed responsibly.
The practice of luring users to clickbait-y sites filled with ads doesn’t feel particularly wholesome, either. Being manipulated into clicking on a link only to be bombarded with banner ads and pop-ups has a deceptive vibe to it.
These reasons and more combine to create an atmosphere where people aren’t over the moon with online advertising practices.
And this has big consequences for advertisers — ad blocking software is going nowhere and online advertising is looking increasingly ineffective. Proctor and Gamble cut $100 million from their online advertising budget, and saw a 2% increase in sales.
Yet advertisers continue to pump billions into this model, with online ad revenue exceeding that of broadcast and cable for the first time last year.
It’s clear that something has to be done to restore users’ trust in online ads, and build a system that works for both sides.
Many companies believe the way to do this is to move away from a model that relies too heavily on third parties.
Cutting out the middlemen
Right now, it’s thought that about 40-70% of ad dollars go to middlemen. Tech giants like Facebook and Google absolutely dominate the space, and they get to call the shots.
The result is that ad companies make less money, users get swamped with irrelevant ads while losing control of their personal data, and content publishers are forced to accept low rates of pay.
The solution could be to decentralize the space and allow ad companies to work directly with publishers and consumers. But how can this be done?
Blockchain vs centralization
Blockchain technology is perfect for this kind of job. It can be used to build more decentralized systems, those without any central point, which eliminate the need for third parties or middlemen of any kind.
Companies like BAT are working on this exact model. They want to allow users to take control of their own data and work with ad companies and publishers directly using their own BAT token. It all takes place within their browser, called Brave.
A slightly different, and perhaps more modern approach to take on the problem is delivered by Kind Ads. They don’t require users to download a new browser, working instead with the infrastructure that already exists.
Kind Ads allows users to monetize their data by selling it directly to advertisers. They can choose who gets to advertise to them and opt out of ads they dislike.
This way, advertisers can focus their ads on people who are genuinely likely to respond well. Publishers can negotiate their own fair fees, and users get an experience that is more pleasant and less intrusive all round.
70% of people think that advertising is a valuable part of the buying journey — when it aligns with a user’s interests.
Using blockchain, it’s possible to deliver a model where ads work for everyone.