Basic Attention Token (BAT) has buckled today’s red trend for most cryptos with it gaining some 5% to reach $0.43 per token, up 4x from $0.1 in February 2019.
The ethereum based ERC-20 value measurer of Brave Browser has been more bullish than other coins or tokens, rising 33% since April 15th with healthy volumes of about $122 million.
The reason is probably because they have finally begun launching ads for those that opt-in to view them.
For those that have updated to the latest version, 63.X, they’ll be allowed to choose on the settings page whether to see ads or otherwise.
According to a representative from BAT, users will receive 15% of the revenue from ads, while publishers receive 70%. The rest presumably goes to the BAT project as income.
Meaning this is in effect replacing Google ads with BAT ads on a Google Chrome browser that has been customized and rebranded to Brave.
In addition, instead of publishers choosing where their ads are shown, to who, what geography, how many of them, and so on, BAT does.
For this they get 15%, which in combination with the 15% that goes to users, makes it no different as far as publishers are concerned save for the fact they lose some control over their own estate as presumably they can’t for example choose to not show any ads, or to show only one, or to not show any to Americans, etc.
That might change as there isn’t much of a reason for BAT to not provide such customization for publishers. In addition, that 15% which goes to users could make its way back to advertisers if the user chooses to tip them.
It’s called a tip because it is voluntary. To incentivize such tipping, publishers could accept their bat in return for subscriptions and so on. Users however can also just turn it into dollars and spend it.
That’s the attention part. You get rewarded for being targeted with ads, something which could have interesting pavlovian implications. Brave says such targeting is based solely on your browsing interest. Nothing leaves your browser they claim.
How that works exactly isn’t clear, but they say initially this 70% of ad gross revenue will go to users, Brave gets 30%. Publishers, who were meant to get better monetization to create quality content, presumably receive nothing until Publisher-integrated Ads launch later this year.
Meaning this is the roll-out, getting you hooked to form a user base, then presumably they do what they like as switching costs can be high.
From user reports, the ads shown so far are mainly crypto ads, by which they presumably mean no big brand.
That’s probably in part because switching costs are somewhat high there too. They probably have whole departments with data scientists and god knows what to fine tune the whole process and to pay the least amount for the most gain.
Brave is quite a small fish in that big picture, attracting less users than some mid-level sites have pageviews a month. Meaning their attempt to compete with Google might be more of a slow grind, if it makes any headway at all.
That’s in part because now this project is effectively complete, there isn’t much innovation. Their browser is basically Chrome, with nothing new to it save for an internal adblocker rather than having to add a plugin.
The token is new in a way, but it almost plays no role. Another BAT representative says advertisers can pay in fiat and basically everything will happen in fiat, but they will turn this into BAT in the background.
That’s another “trust me,” but even beyond that, it sounds inefficient as conversion usually has fees, spreads, and so on. Meaning they’ll probably convert only what they pay to users and publishers in BAT, while they’ll probably keep their own 15% in fiat.
Naturally some of that 15% should go towards buying BAT or burning it as a dividend, but whether they will do so and just how much of it, remains to be seen.
That’s because there are considerable expenses from the Brave team’s perspective. They’d need a marketing team, they’d need analysts, and on and on. All of which costs money.
Finally, and most importantly, it isn’t clear whether there will be any transparency. They say 15% or 70%, but who is to know. They could – and why on earth would they not – keep 50% or maybe even 70% of the revenue and unless some whistleblower – who would be out of a job – no one would really know.
That’s a big problem that goes far beyond BAT. Affiliate marketing is a big industry, for example, but publishers rely on what they’re told was a conversion. There’s hardly a way of knowing, with the only safety net being a more high level incentives game that boils down to you remove the affiliate ad and see whether they care to chase you and bag you to come back.
BAT could and can address that significant problem that does require some innovation, but is now possible because of smart contracts that can show token transactions, and thus how much is bought/spent for what if the system is so designed, and so on.
Then there could be a chain effect where publishers demand such advertising platform because they’d know they’re not being cheated, and thus advertisers would have no option but to follow them.
Google here wouldn’t be able to play unless it copies the platform, but first mover effects and so on. Making it all actual competition.
While in the current BAT set-up there’s little on offer for advertisers, users or publishers, that goes beyond what is already available.
Users of course may receive some pennies, and maybe they will spend time to allocate such pennies to publishers they like, but blockchains are about trust and here a lot of trust could have been removed.
Pretty much none of this “trust me” has been minimized so far, but this is a very new project. A project that can have potential, but how it will develop remains to be seen.