Online advertising has seen tumultuous growth and a multitude of changes since the first banner ad appeared back in 1994. Adverts were more of a “spray and pray” affair back then, with adverts for anything and everything being displayed to essentially any user without specific targeting. Nowadays, advertising via search engines or social networks has taken on the intelligence to ultra-specifically target and track users across the internet, absorbing all their interests and needs, and deliver exactly the advertising it believes to be of interest to them. However, while their methods are constantly improving, they come with their own set of problems, in summary – lack of data transparency for the users who have their data harvested, data isolation in terms of those who harvest the data keeping it to themselves, and data safety.
DATx (DATX) is developing a dedicated blockchain-based advertising ecosystem which is hoping to address all of the above issues, by attempting to create a “win-win” system for all involved. Users will be able to aid advertising platforms in having more suitable adverts delivered to them by giving feedback, as well as receiving incentives for this, while advertising platforms are able to better train their algorithms to display adverts to the most relevant users, which is also a boon for advertisers themselves, as they have to spend less – or at least more efficiently – due to the better targeting. Finally, the publishers who integrate DATx adverts into their content streams are likely to generate more revenue as users will have more meaningful adverts displayed to them with which they are more likely to interact.
According to PageFair, 11% of the global internet population was blocking adverts in 2017 – showing the growing disdain for often intrusive advertising which does nothing but get in the way of a pleasant online user experience. A system where users are not bombarded with irrelevant and annoying adverts – as is often to case with current advertising models – and also receive an incentive for sharing their preferences, is highly beneficial to the users themselves, as well as advertisers being able to drive a more cost-efficient system whereby they target adverts only to users who have an interest in them. Coupled with a backend that keeps user data secure, DATx is proposing an interesting alternative to the current advertising landscape.
The Protocol
The DATx ecosystem consists of several elements that will keep it functioning correctly and delivering the relevant data to the correct parties.
- The Incentive system – depending on the interactions that take place between users and advertisement channels, the incentive system will distribute tokens between the two parties.
- The behaviour information storage system – “User behaviour profile analysis” data will be gathered over time depending on the decisions and inputs users make and are observed as making, and stored on the blockchain in an encrypted manner.
- The application platform – this connects external applications that interface with the DATx SDK (software development kit), such as web applications or mobile apps.
- The advertising platform – here, advertisers can offer suggestions as to advert delivery, as well as providing information on advert performance to publishers – all analytical data is stored on the blockchain to ensure truthfulness.
- The big data feedback system – the system collects user behaviour data and conducts big data analysis of such information
- The AI recommendation system – powered by an algorithmic AI engine, this system provides users with precise and personalised advertising recommendations.
- The anti-fraud system – as took place in the early days of AdSense and other online adverts, criminals are likely to attempt to take advantage of the advertising system for their own financial benefit. The anti-fraud system will aim to ensure that the ecosystem as a whole doesn’t fall prey to such fraudsters and develops correctly.
For the DATx system, user input and choice is everything. Users will be provided with unique identifications (UIDs), which they can sync across any devices they use, to seamlessly continue within the DATx ecosystem, regardless of whether on PC or mobile. Under this system, users will have full ownership over their data, and third-parties will first have to be authorised by the user to gain access to it.
In essence, users will be made more aware that certain adverts they are seeing stem from the DATx ecosystem. At first they will have a “weak” profile attributed to them, similarly to how ad platforms do it traditionally, but once a user decides to begin inputting and giving feedback to the system, a “strong” profile will be created and they will be incentivised in the form of DATx tokens – which will lead to them being more proactive in “liking” or “disliking” said adverts, commenting on adverts, and generally sharing their preferences, as well as actually interacting with the adverts themselves and being likely to buy or subscribe to products featured in them. Giving access to more parties to use their data will also gain them DATx tokens, which will lead to them becoming increasingly invested in the DATx ecosystem.
Over time, as more accurate user profiles are built up, advertisers will develop accurate profiles of their users, which equates to happier advertisers and publishers, as well as a system where users are actually happy to engage with adverts, as they are both incentivised to engage not only due to rewards, but also the fact that the adverts themselves are more meaningful to them.
DATx also attempts to tackle the issue of data isolation between advertisers. Traditionally, advertising networks each build up their own profiles of users – generally without user knowledge or official consent – which leads to fragmented datasets being stored out of reach of one another, instead of working together in harmony. DATx will allow any advertisers who use the platform to contribute to the sole user profile for each user, which will allow a more detailed single profile to be built for each consenting user.
Finally, storage nodes will be integrated into the system to ensure user data is distributed to prevent attacks on the network. Nodes will be incentivised in the form of payment in DATx tokens – and even users can choose to become storage nodes if they so desire, giving them even further incentive to cooperate in the network ecosystem.
Team and Partnerships
The DATx team is made up of a large group of engineers (some 80+), with a few main talents leading the way.
Ralph Sas is the CEO and project lead for DATx, while at the same time being acting CEO of DotC United Group – a leading Chinese mobile app developer which has been funded to the tune of $370.7M, as well as being CEO of Avazu Europe, a leading advertising company on which there is more detail below. Overall, Ralph has incredible experience in this space and appears to be the perfect person to lead the project forward.
Guus Esbir Wildeman is in charge of marketing. He is the current COO of Avazu Europe, with a particular background in working with publishers to market games online.
DATx are in partnership with Avazu, a digital marketing and online advertising service provider founded in Germany in 2009, with its headquarters in Shanghai. Their communications are seen by more than 85% of internet users worldwide, in over 130 countries – with roughly 100 million daily “users”. A partnership with an advertising company with this kind of reach and tenure is a certain advantage for DATx, who will need these type of inroads into the industry. Avazu, like all major players in advertising these days, is already in the field of programmatic advertising, and will be able to roll out DATx functionality quickly (this is already in the roadmap, which can be read further down).
Generally, it can be seen that DATx is essentially a project steered by Avazu and its leading members. Seeing an advertising behemoth like Avazu take on advertising from the blockchain perspective at this stage is encouraging, and with the team backing the project it is quite easy to at least eliminate the threat of exit scams or other issues that can plague many other crypto startups – this appears to be a project that will stick around for some time.
DATx also has a multitude of backers, such as the QTUM Foundation, Game.com, and a number of VC funds, with Patrick Dai, Founder of QTUM, and Xu Le, CEO of Game.com, advising, among others. The fact that such a number of high-profile names are publicly backing DATx does give cause for optimism – especially the fact that QTUM project (a blockchain project ranked 20th overall for market cap at $1.3~ billion) and its founder are investors and backers.
The DATx site also lists a number of “DATx and Avazu partnerships”, which includes some huge names such as IBM, Google, and Facebook, but it is likely these are mainly partners in terms of Avazu’s previous advertising system – some clarification on whether any of these partnerships affect DATx at this point would be useful.
Economic Model
The DATx token is intended as a functional utility token on the network, and will be a major component of the running of the DATx ecosystem. The token is the only manner by which users can be paid for their “incentive” payments, as well as publishers being paid for hosting adverts, meaning if advertisers come on board, they will be required to buy what will likely be large volumes of the token. For token holders, this requirement for tokens to be in constant demand if the platform gains traction is a definite advantage.
The DATx token will also be responsible for paying for the aforementioned storage nodes, giving it another function and further restricting supply.
Roadmap and Advancement
In 2018, Avazu, with their strong connections to the DATx project, will be the first ad platform company to be compatible with DATx, with the intention to integrate native customised native ads with DATx and begin acquisition of active users. The incentive mechanisms are to be put in place for all parties, as well as the anti-fraud mechanism and user-oriented decentralised behaviour archive.
In 2019, native ad feeds are to be added, additional advertisers are to be brought on board to deliver ads on the platform, and the personalised recommendation system, based on AI and the decentralised behaviour archive are to be integrated into the platform to optimise advert performance.
Having Avazu on board at this early point in the project will be a great opportunity to show off the DATx proof of concept, which, if successful, is sure to pave the way for more companies and users to be brought on board in 2019 and beyond.
The project will be part of a panel at Blockchain Festival Vietnam titled “Disrupting Content & Advertisement Block by Block“, alongside UUNIO, BigBom Eco and AirBloc. This should be a good opportunity to find out more about the blockchain advertising space in general, and especially any more details on what DATx has planned.
Potential
According to ZenithOptimedia, global advertising expenses are expected to increase 4.4% throughout 2018, to an overall $592 billion. Within this, programmatic media buying and advertising is expected to hit 50%. If the advertising landscape continues to shift in this direction, and users continue to expect more control over their personal data (especially with the recent implementation of the GDPR in Europe), then DATx seems like a valid contender to capture some of this vast market. With a market cap of just under $60 million at the time of writing, DATx is still somewhat more in the “small cap” zone, meaning that there is plenty of room for future growth.
DATx does have some competition in this space – mainly in the form of BAT and AdEx. BAT intends to reward users who view adverts with tokens, which they can also use to donate to their favourite websites, while AdEx gives users a voice in which adverts they want to see. At the time of writing, DATx and AdEx have similar market caps of around $60 million, while BAT is sitting around $360 million – though this is likely explained by BAT tokens already having a use within the system integrated into the associated Brave Browser. Once DATx begins rolling out their features throughout 2018, and the token demand increases, the market cap is likely to see persistent increases.
In terms of traditional competitors, Google AdSense is the behemoth against which DATx (and all of the industry) competes. Estimated at having over 69% market share, AdSense at this point is so ingrained into the fabric of the internet that it seems unlikely to lose its hold anytime soon – though this may change as people increasingly move towards ad blockers as they realise that traditional ads don’t serve them any true purpose.
A system whereby all parties end up “winning” could well sway at least a portion of people away from ad blockers, especially if they know that their data is being securely held and won’t be used maliciously against them at some point in the future. This is the core issue behind a system like DATx – the network effect whereby a significant enough amount of users can be brought on board has to be established to keep things rolling on.
We see the Avazu partnership as having a large role to play in this, as with their established advertising ecosystem they could immediately get DATx adverts in front of the eyes of millions, which is really the simple beauty behind marketing this project and may in fact lead to a drastically sped up network effect – DATx adverts will be subtly labelled as being such, and this message will be delivered to users riding atop of regular adverts, in essence being free advertising for the project itself. If the user and publisher incentives are attractive enough to lead to word of mouth further spreading, we can see a network effect being established without significant issue.
Final Thoughts
With advertising solutions not having undergone much re-thinking in the last years, at least not from the perspective of giving users more insight and control into their usage of adverts, a radically new solution such as DATx could be just what the digital landscape needs.
Empowering users over their own digital profile is a novel approach in the advertising realm, and we can see it attracting users who have become disenchanted with the traditional methods of being chased across the internet by a multitude of aggressive adverts with no real idea of how their data is being gathered and used behind the scenes. DATx has competitors in the space, such as AdEx or BAT, but with a solid team, a major partnership/collaboration already in place in the form of Avazu, and an apparently strong business and technical know-how, we believe that DATx has the potential to be a main player in the new field of blockchain ad tech in the near future.
DATx is available to be traded on the HADAX platform, where it won the second place in HADAX’s phase 2 round 1 token voting out of 23 applications. We wrote about HADAX here.
As always, this is not financial advice. This article is based on personal opinion, and we advise everyone to read DATx’s whitepaper, and check through their official webpage, before investing. Do your own research, and consult a financial advisor if needed.
Disclaimer: This is sponsored content – though we always keep our content objective and based on the facts.