In the Future, Will Consumers “Sell” Their Own Data and Ad Space?

Sounds crazy. But judging from the discussion in conference sessions at the recent Internet Advertising Bureau Mobile & Data Symposium and the Consumer Electronics Show, it may happen someday. Under the current paradigm, an advertiser wants to reach certain individuals. Those individuals want to consume specific content. The owner of that content allows consumers to access it, and in return these individuals are exposed to advertising, which the content owner (or its representative) has sold to advertisers. Everyone wins ??

Except when things start to get complicated, which things tend to do. Then, advertisers get defrauded. They end up having to pay a bunch of middle parties to keep the ecosystem running and to keep it relatively clean. Consumers have their privacy invaded. Or they’re subjected to obnoxious ad units and formats that cause them to rethink the content vs. advertising balance. Publishers see advertising in their content blocked by consumers employing third-party technology, demolishing the free-or-cheap-content-in-return-for-advertising paradigm in which we’ve all been living for decades. No one wins, except maybe the crooks and middlemen ?

A great many such issues, industry challenges, and evolving technologies were intertwined through the various discussion sessions at these recent industry conferences. Consumer privacy and control. Workable publisher revenue models. Ad targeting technologies. Walled gardens and data. Fraud. Pay walls. Personally Identifiable Information (PII). Ad blockers. Blockchain.  Government privacy regulation.  

“When this thing hits 88 miles per hour, you’re gonna see some serious shit.” – Doctor Emmet Brown, Back to the Future

All of these concepts and challenges came together in discussions at both conferences around the potential and promise of blockchain in media and advertising. Right now, consumers have limited awareness and control over their own data. And where they do have control, it’s for individual entities. I could change my privacy settings in Google, but that wouldn’t help me elsewhere. Speaking of Google, they along with Facebook (and many would say Amazon) are currently the keepers of the data on their users (and they determine to a large extent what to do with that data). 

Similarly, consumer relationships with content providers are generally discrete. “I’ll pay Pandora for no ads.” “I’ll accept ads on Hulu so that I can see the content at a lower cost.” “I’ll read the NY Times until my number of free articles runs out for this month, and then I’ll wait.” “I’ll share data with Facebook because I like the experience of Facebook; plus I’m not entirely sure how to stop sharing it with them.” Etc. Meanwhile, advertisers and publishers face inconsistent privacy regulations from one country (and even one state) to the next. Consumers are blocking ads or complaining – legitimately – about crappy user experiences. Right now, it’s kind of lousy for all parties.

This is where blockchain might come in. If you aren’t familiar with blockchain, it’s a digital record or ledger of individual log entries (or transactions) that is shared and updated across a network or community. Each transaction is another block in the chain.. Get it. Blockchain.  There is no single, central record or ledger – the network validates and records each transaction or block across multiple computers or nodes. As blocks are added to the chain, all copies of the ledger are regularly updated. The most well-known application of blockchain is cryptocurrency like Bitcoin, but the concept is being aggressively explored across a variety of applications across many industries.

“Unfortunately no one can be told what The Matrix is. You’ll have to see it for yourself.” – Morpheus, The Matrix

Including advertising. Much of the early conversation of blockchain with respect to advertising has centered on programmatic, where computers buy and sell ad impressions in real time – in a fraction of a second – based on sophisticated targeting parameters and auctions. The focus initially seemed to be on the transaction itself, and the opportunity to eliminate fraud and increase transparency – both desperately needed in the programmatic advertising ecosystem.  And that still may be one application for the technology.

However, as discussed at the IAB and CES conferences, why stop there? Rather than consumers having to set privacy preferences with individual content providers (i.e. Google, Facebook, etc.) who then control the data and access on a micro level, what if consumers each set their privacy preferences on a macro level and were individually compensated for their own data and resulting message exposure? Each bit of data, each ad exposure, each fill-in-the-KPI resulting in compensation to that individual? Some consumers are already being acclimated to a paradigm where they’re rewarded for viewing ads, sharing an email address, etc. What if those “transactions” could occur seamlessly, instantly, transparently.

It’s about right here in each of these discussions that a tech-savvy someone points out that blockchain could never work in this capacity (i.e. programmatic, privacy management, etc.) because it’s too slow to handle the requisite volume of transactions. It can only handle a relative handful of transactions per second, which would never work on the scale required to execute individual ad exposures based on specific targeting parameters and consumer privacy settings. 

“You mustn’t be afraid to dream a little bigger, darling.” – Zak Eames, Inception

Which is true, but it also misses the point. No, the technology can’t handle this today, but can it at some point in the future? Maybe there’ll be blockchains of blockchains. Of blockchains. I don’t know. But you get the idea. Moore’s Law (that the number of transistors in a dense integrated circuit board would double every 2 years) has essentially held true for some 50 years in the computing industry. My cell phone had an antenna 20 years ago, and it wouldn’t fit in my pocket. It didn’t get Facebook, but that was fine, because there was no Facebook. Technology advances, and it does so with ever-increasing rapidity. So, how long before people start having universal control over their own data and being compensated for sharing it? Dunno. But let’s not say never.

How would consumers be compensated? This could go lots of different ways. But taking the blockchain example a little further, perhaps they are incented via an existing or new digital currency. That currency could have different “values” depending on what the consumer opts to use it for. It would have a cash value (fluctuating with the market, as other digital currencies do), but then also some specific value when applied to subscriptions or purchases from publishers for content, or when applied towards orders for advertiser products, and so forth. 

Perhaps consumers would have a digital wallet (again, as is the case with existing digital currencies), and currency would be seamlessly added and subtracted from that account based on the consumer’s activity. Essentially consumers would be compensated by any entity that makes money on that consumer’s data or attention. The more data an individual agrees to share, and the more valuable that data is to marketers, the more that consumer is compensated. Every single exposure is another transaction, and the consumer is in on it. Digitizing these transactions would make this proposition a much more exact science than it is today. 

If this were to become reality, what would it mean for advertisers, publishers, agencies? Media auditors? If advertising was transacted based on a “set it and forget it” system where consumers determine what data they will share and are electronically compensated, can the computers just take it from there? Of course, the answer is no, at least not entirely. To be sure, everyone in the paid media ecosystem – media auditors included – ought to be thinking about how media will be transacted in 5 years, 10 years, etc. and determining how to add value in that evolving landscape. Because the ecosystem will continue to evolve. Marketing and advertising will always require strategy, tactics, measurement and accountability. Skill sets will simply need to change with the needs of the marketplace, as they always have.

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Image:  ? James Steidl | Dreamstime.com