What is Basic Attention Token…
Advertising is one of the most critical revenue models for most of the businesses online, however, to put it mildly, the advertising industry is a dinosaur. The model has not changed for years and is desperately in need of an overhaul. This is where Brendan Eich’s Basic Attention Token (BAT) is looking to change the game completely. Basic Attention token [BAT] is looking to monetize attention by paying users for watching ads.
The Modern Age of Digital Advertising
Back in the day, advertising used to be a different game. We went from street proclamations to billboards to the television. However, the game is a little bit different now. On the surface, it looks like modern advertising is easy.
We have search engine giants like Google and social media platforms like Facebook. Facebook, as of right now, has over 2 billion users. That’s nearly 30% of the world’s population. Because of this, advertisers and marketers flocked over to social media and used various methods to target their audience.
In fact, digital advertising has become so lucrative, that in 2017 it crossed television ads in total collected revenues:
In 2016, Google was the largest recipient of global ad revenue having collected $79 billion while Facebook also collected a staggering $27 billion in revenue.
However, the thing with Digital Marketing though, is that it is pretty much hit and miss and not compelling enough to hold someone’s attention. Most of it is exceptionally unsubtle and consists of annoying pop-ups which no one clicks on anyway.
No Incentive for Users
Before we go any further and show you how bad the current situation is, you should know about the general hierarchical structure of the digital advertising industry. There are three major players in the system. Imagine that you are about to watch a video on Youtube and before that video begins, you see an ad.
In this context, you, the video watcher is the User. The person whose video you wanted to watch is the Publisher, and the person who created the ad is the Advertiser. In this dynamic, you, the user, is interested in the publisher’s content, the advertiser is in the same niche as the publisher and wants to target you with content.
Now, in this entire dynamic, the advertiser is selling their product and the advertiser is getting their commission from the publisher. However, what is incentivizing the users to watch the ads in the first place? Sure you can say that the users are getting free content and they may end up stumbling across something they like. However, users don’t like to sit through ads, if given a chance, they will probably skip it.
Along with users, advertisers, and publishers, there is another player in this ecosystem that we haven’t mentioned yet, the Platform. In our example above, Youtube is the Platform. In order to maximize user attention, and to make sure that they are watching ads that they are interested in, these platforms took their game to another level. They started researching the private data and internet searches of their users and handed over the data to behavioral scientists.
Using this research, they were able to fine-tune and direct specific ads according to the user’s needs. Incorporating machine language and AI, these platforms were able to show exactly what you wanted to see. This is exactly what happens when you Google “Best hotels in Jamaica” and your Facebook page gets littered with beautiful Jamaican hotels.
So, the most obvious question to ask here is…”is this legal?” Well… yes, and no.
A company can analyze the behavior of their customers, however, it becomes problematic when they sell this data to another company. Now, why is this so unethical?
You are, quite literally, violating the privacy of your users. You are giving the data that the user may have willingly (or not) given to you. You are giving away your user’s interests, likes and dislikes on a silver platter. In fact, this very issue has been under the spotlight until very recently (as of writing).
You know what we are getting at right?
The Facebook Trial
Yup. The Facebook debacle.
We are pretty sure you are already familiar with the story. Facebook was accused of selling its consumer’s data to Cambridge Analytica. What did Analytica do with that data? Turns out, that this very data was used to mold the public on several political decisions like Brexit, US elections, etc.
This is where a line needs to be drawn. We cannot let anyone exploit a user’s private data to be used by someone else. At the end of the day, this kind of irresponsible behavior from the platforms is not right for the advertiser, the users, or the publishers.
- Users, as we have already stated, get their privacy violated.
- Advertisers can’t effectively monetize their ad since the platforms take a chunk of their earnings.
- Even the publishers don’t get anything even close to what they deserve because the all-powerful platforms take a considerable chunk of their revenues.
Long story short, digital advertising is broken.
Users don’t have any real incentive to watch any of the ads and the platforms take away most of the revenue from publishers and advertisers.
This is the reason why the blockchain technology needs to be integrated into the digital advertising industry. It brings in transparency, privacy, decentralization, and honesty by connecting the publishers and advertisers directly with the consumers, without any middlemen.
What is Basic Attention Token (BAT)?
BAT is short for Basic Attention Token; it is a digital advertising token which is built on the Ethereum blockchain. The purpose of the BAT token is to create an ad exchange marketplace which will connect the advertisers, publishers, and users in a decentralized manner. The purpose of BAT is to monetize user attention and remove all the other needless expenditure related to ad networks.
The Basic Attention token [BAT] takes care of the following:
- Serves as a unit of exchange by cutting out the middlemen
- Rewards users, publishers, and advertisers.
- Users get paid for giving attention to ads.
- Publishers get a portion of the ad revenue as is the norm.
- Advertisers get better ROI for their content.
The BAT team created Brave, an in-house native browser which is integrated with the Bat system. BAT tokens are the native currency that will be used by the system.
A Brave New World
Brave is a “privacy and speed” centric created by the Basic Attention token [BAT] team. Brave blocks all the unneeded ads and trackers by default. Unlike most adblockers, Brave blocks all ads without any bias. As a test, we opened Amazon.com with Brave and within a few seconds, it ended up blocking 7 Ads and trackers.
The Brave browser is constantly monitoring your attention to see what are the kind of content you are spending most of your time on. Based on that, the publishers will get paid accordingly. Since the browser uses the blockchain to keep track of all this data, it is impossible to tamper with it.
Along with that, the Brave browser constantly measures the Attention Value of each and every ad on the browser. This value is calculated based on the incremental time the ad is in view and the number of ad pixels that are visible in proportion to relevant content. Using machine learning on the attention value of different ads, the Brave browser shows the users the kind of ads they want to see.
Brendan Eich stated that as of right now, users can make up to $70/year from viewing ads and it will eventually go up to $224/year by 2020:
“Many of Brave’s users at this early stage are “lead users” (Eric Von Hippel, MIT) and represent off-the-grid prospects because they block assiduously, either in Brave alone or with Brave + uBO or another solid blocker. Lead users are worth much more due to their high usage of search, ecommerce, and paid services. I would not be surprised if our users can make $70/year as we bring the system up in 2019 — when ad deals will be harder to come by and we’ll subsidize revenue from BAT’s User Growth Pool — and climb by 2020 to above .7 * 320 or $224 net user revenue per year.”
Features of Brave browser
- Privacy: The user’s browsing data is kept completely private. All the information that one would need for ad-matching will, as a result, be unavailable. Third-party trackers are also blocked automatically.
- Enhanced advertisement matching: The Brave browser keeps a complete collection of user data along with intent signals, active tabs, URLs, keyword search entry information, browsing information, etc. The platform, along with the Brave browser can also establish if users are in a favorable time and place in their browsing experience, in order to provide them with offers.
- Improved experience: Users don’t have to reach out to external servers for every page load. Since ad matching is done locally, it leads to quality browsing, good battery life, less data usage, and minimal disturbed content flow.
As of March 28, 2019, Brave has already hit over 20 million downloads on Android. One of the more prominent users of Brave happens to Wikipedia co-founder Larry Sanger. He stated that he has switched from Chrome to Brave:
As of March 12, 2019, Brave has entered its second phase. In the first phase of its ads preview, Brave monitored user activity and saw that they were engaging with the ads. The second phase will actually reward them for their attention. Brave announced:
“Phase two provides token rewards to users for their attention, and introduces Brave’s anonymous-but-accountable campaign reporting for brands….With today’s Developer Channel update [version 0.63.4], testers on OS X, Linux and Windows x64 [with 32-bit/x86 to follow shortly] will start to see the ads they are viewing being counted [”ad notifications received”] on the Brave Rewards Settings Page [accessible through brave://rewards]”
Such an ambitious project requires an extremely capable team. Thankfully, Brave has the best of the best in that regard.
Let’s start off with the man himself, Brendan Eich.
However, that’s not the only important contribution that he has made. He was also the man behind Mozilla Firefox, one of the most popular browsers in the world.
Along with Eich, Brian Brondy is the other co-founder. He was also involved with Mozilla Firefox. He was also instrumental in Evernote and Khan Academy as well.
Yan Zhu is in charge of security and privacy. Zhu is part of Forbes 30 under 30. She has an extremely impressive resume and was part of Yahoo’s security engineering team from 2014-2015. She was also elected to the World Wide Web Consortium’s Technical Architecture Group (TAG).
As you can see, the team is full of extremely competent engineers and scientists which gives it a huge boost over other projects. The very fact, that they have proper researchers on the helm who have “been there and done that” should give you enough confidence in their ability.
Controversy Surrounding ICO
Basic Attention token [BAT] also has the dubious distinction of having one of the most controversial ICOs ever. The BAT ICO raised a staggering $35 million…..in 30 seconds. Just think about that for a second. The amount of time we took to write this paragraph was enough for BAT to raise their required capital.
One buyer paid $4.7 million worth of Ether to buy the tokens. Another user paid $6000 worth of mining fees to virtually guarantee their spot at the top of the pile. Only 130 people bought the tokens with 5 people buying half of the supply. In fact, you can look at the pie chart here to see the token distribution:
Obviously, this clearly means that the BAT tokens are not exactly decentralized and evenly distributed…to put it very mildly.
User – Advertiser – Publisher Relationship in BAT
For BAT and Brave to work, they needed to create a system, which would be fair for all the three members of the ecosystem:
The way the Users-Advertisers-Publishers relationship will work in BAT’s environment is as follows. We already know why the users have an incentive to join Brave because of attention monetization. However, what about advertisers and publishers?
What is Brave doing to make sure that the advertisers are properly compensated for their efforts? Well..check out the following graph:
The graph above shows the increase in the use of adblockers on both desktop and mobile platforms. Advertisers all over the world have been badly hit because of this.
Adblockers have been a bane for the advertising industry. Most publishers have resorted to begging users to switch off their adblocker in order to gain access to their content. It is necessary for both advertisers and publishers for these ads to work since that is their biggest source of revenue.
How does BAT fix this? By economically incentivizing users to view ads and using their decentralized machine learning platform to show users the exactly the kind of ads they want to see will make sure that the advertiser’s ads are not gone to waste.
Up next we have the publishers. What do they have to gain from the BAT platform? As it turns out, they have plenty to gain.
If you are a video content producer, then YouTube is one of the most important platforms for you. YouTube is ideal for beginners as it gives a free platform, provides security, hosting, distribution, great search engine performance, and video editing tools. However, when it comes to handing out royalties, YouTube can be extremely stingy.
“Pewdiepie” is a YouTuber who made $15 million in 2016 and $12 million in 2017. That’s a pretty insane amount of money. However, consider these stats for a second. Pewdiepie has 88 million subscribers, that a quarter of the United States’ population. If he just earned 50 cents for each of those subscribers, then he would have made $44 million! That’s nearly four times what he made in 2017.
That’s not even the worst case of YouTube being stingy with its royalties.
Luis Fonsi’s “Despacito” is the most viewed YouTube video in history. The video, as of writing, 6 billion views. For perspective, the earth’s population is 7.3 billion! Guess how much Fonsi made from his Despacito YouTube views?
As of September 2017, he made only $3.2 million from YouTube.
This is the problem that many users on traditional platforms are facing. They are not getting what they are worth.
Publishers with 100,000 active subscribers can earn somewhere around the minimum wage from the ad revenue. Consider this for a moment, only 24,000 channels have over 100k subscribers. When you think about the fact that Youtube has over a billion channels, that’s a really poor percentage.
However, what does YouTube get in return? Lots of views and new users in return of all the hard work done by the publishers. That is not really a fair system now is it?
BAT realized that the only way they could go forward was to get as many publishers on their platform a soon as possible.
As per BatGrowth, this is how they have been doing.
There are a total of 78,032 publishers of which:
- 56,217 Youtube publishers
- 16,116 Website publishers
- 5,699 Twitch publishers.
Mere numbers, in this case, aren’t enough. Let’s look at the rate of addition of new publishers.
What do these three graphs tell you?
Publishers are joining Basic Attention token [BAT] at an exponential rate! They understand the true value of this project and, as such, want to join the party as early as possible. Publishers receive Basic Attention token [BAT] based on how well they command user attention. Less the attention, less the rewards.
Conclusion: What is Basic Attention Token
Basic Attention token [BAT] has such a high-quality team that it is not a matter of IF they will disrupt digital advertising or not, but WHEN. BAT could genuinely be one of the most revolutionary projects out there. Let’s hope that they can carry their positive momentum and give us a product we will widely use in the future.