Using blockchain to bridge the gap

There has been a running battle for years between the advertising industry – driven by a vast, complex ecosystem, and privacy advocates, who seem to expect free services without offering anything in return.

While the advertising industry has shown the model in its existing form can work (Google alone  makes roughly $167 million per day on advertising), the privacy pushback has been consistent, well-organized, and now has an embedded regulatory framework in GDPR that has American companies scrambling to line up behind European privacy policies.

The advertising industry is understandably loathe to give up any potential revenue, and the privacy advocates have taken a very rigid line on advertisers having access to any personally identifiable information. The problem, of course,  is that the vast majority of the consumer-facing internet was built on delivering services based on an advertising model driven by personal information. The privacy advocates don’t seem to understand this, and have co-opted the least technically informed people on the planet – the US Congress – to drive their point home.

Until recently the gap between the two sides seemed insurmountable; the advertisers are ultimately looking for a reliable, increasing revenue stream; which needs to be driven by ads served to people who should be interested in what is being offered – no advertiser wants to throw darts into a dark room in the hopes of hitting a target that may or may not be there. The privacy advocates want users of free services to not be identifiable on a network – which runs counter to what the advertisers need in order to keep the internet affordable.

So the midpoint between the two sides is allowing consumers to be identified by advertisers, where the “identity”  is willingly offered up by the consumer to the advertiser. If the information is offered up willingly, the privacy argumente evaporate.

So what would incent people to self-identify interests to an advertiser? Two things: anonymity, and compensation. This is where Blockchain as an enabling technology becomes interesting. Consumers can choose to self-identify specific aspects of themselves (age, income, lifestyle, purchases, etc., which can be stored on a blockchain, accessible, but anonymous). Advertisers can extract anonymized data via profiled criteria that is kept in a double-key encrypted module (blockchain’s core value), but more importantly, the advertiser should be willing to pay to get access to these specific data elements (technically, they already pay, just not to the true owner of the data, the end user).

This model bridges the gap between both sides very elegantly. Advertisers have access to information that is offered up by the end user (no more privacy concerns), and consumers not only get ads that are relevant, they’re actually paid to view them. It’s in everyone’s interest to make this work.

This model could be applied to nearly anything. We buy things steadily, some with short purchase cycles (e.g. groceries or medications), some with longer cycles (e.g. cars, appliances, etc.). If an advertiser wants my full and undivided attention, make the ads relevant, and I am happy to participate if they make it worth my while. Each demographic or behavioral element can sit on the blockchain, and be anonymously extracted (the advertiser searches on people who have said they want to buy product X, or are active in lifestyle Y).

The next question is, what’s to prevent people from feigning interest in order to get paid? Another blockchain solution, define the relationship with a self limiting Smart Contract. Once you self identify your declared interest runs for (e.g.) 60 days, then it expires. Advertisers may end up paying for people who don’t move on the offer, but the vast majority of advertising already misses the target entirely, this would begin to move advertisers and consumers towards each other in a mutually beneficial relationship. Everybody plays, everybody wins.