The internet has the illusion of freedom and free access that draws millions of users each day. Google, one of the most popular web platforms in the world, is so ubiquitous as a service that it’s frequently referred to in its verb form, “Google it.”
Last June, Mark Zuckerberg took to Facebook to announce that his social media juggernaut reached 2 billion users for the first time. While few platforms possess the same scope as Google and Facebook, there are millions of digital services – from news to Flappy Bird – that routinely draw significant traffic. A 2018 Pew Research study found that the U.S. now has near universal broadband internet access, and this combination of mass consumption and seemingly free platforms have made for an engaging technological phenomenon.
Of course, the digital economy is not free. The internet is, in many ways, fueled by advertising. Targeted advertising, which is one of the most effective advertising strategies in history, dominate the tech space and funds the freedom illusion.
In other words, the ads that follow users around the internet are not modern miracles that are serendipitously presented across different platforms. Although it can feel miraculous, these targeted ad campaigns are the result of an incredible amount of user data collected by web platforms and sold to marketers. Every click, view, like, share, and search is meticulously collected, cataloged, and sold. What’s more, this information is incredibly lucrative for online platforms.
After all, internet platforms that offer free user access aren’t making billions in profits by providing free stuff. In 2017, Google and Facebook were expected to earn more than $106 billion from digital ad sales. Google is the leader in this category, as it nearly doubles Facebook’s $33.76 billion in estimated ad sales earnings, but no matter how you examine it, these companies are making a lot of money.
Even Snapchat, a social media platform that’s primarily marketed to teenagers, is expected to earn more than $900 million from ad sales. That’s a lot of money for a service that superimposes cat ears on your face before dissolving your photo after it’s viewed.
In this case, the famous phrase attributed to Andrew Lewis is particularly apt: “When something online is free, you’re not the customer, you’re the product.”
It turns out that user attention and user data is the commodity being exchanged on the internet, and it’s extremely valuable. Sure, users are compensated with free access to the various services, but the ability to endlessly scroll a feed seems like peanuts compared to the monetary value of the user’s data.
Now, new platforms powered by the blockchain are reorienting users’ relationship with advertisers.
The blockchain was first designed in 2009 when Satoshi Nakamoto first launched Bitcoin. As digital currencies surged in popularity and value in 2017, the blockchain gained additional exposure and its full capabilities, which are far more progressive than just accounting for cryptocurrency, are beginning to be fully realized.
For instance, Wibson, a blockchain-based marketplace for user data, allows individuals to sell their personal data directly to advertisers. By some estimates, this data is worth upwards of $240 each year, and it brings advertising value back to its original source, the user.
In this decentralized marketplace, users can choose the aspects of their personal data that they want to share, and marketers can buy that data based on simple supply and demand principles. This is a more equitable solution for everyone involved. Since Wibson verifies user data, advertisers are guaranteed quality, usable data, while users are fairly compensated for their contributions.
Wibson is joined by other blockchain platforms like the Basic Attention Token (BAT), which compensates users for viewing ads or interacting with advertising material. Their approach similarly pays users, but it equates their time, not their data, with value. Of course, both of these aspects are helpful to users provide the benefit to both the internet platforms and the advertisers.
User data and attention shouldn’t be free. They are the most valuable commodities on the internet, and it fuels the entire ecosystem. Fortunately, new platforms, empowered by the blockchain, are righting this relationship by providing direct monetary value to users. This may incentivize better content production from internet platforms, better advertising from marketers, and a more satisfying experience for consumers. It’s a win-win-win, and it’s about time.