Updated: Apr 8
Advertising has the ability to transform daily life with messaging and creativity, create hit companies like Apple, and is practically impossible to avoid. Like so many other industries, technology has drastically altered the different ways to promote a brands story and message. This article explores the application of Blockchain to the advertising industry, then discusses the valuation of the BAT token and company.
Since the application of digital advertising - there is now an entire market focused on AdTech - bidding for and serving personalized digital ads. Tech firms are taking more and more market share, commanding an ability to continuously draw our attention on their platforms, Google, Facebook, Twitter, to name a few.
Media & Hi-Tech Industry - Advertising Revenue Numbers -
Twitter - Over 1B in yearly revenue - all through advertising, are now considering a subscription plan in the future - 39B Market Cap
Facebook - 69.7B in revenue - (2019) - 98% of revenue based off advertising - 746 B Market Cap
Google - 134.8B in ad revenue in 2019 - out of 161B total
Fox News - 1.6B in ad revenue 2020 -
MSNB - 728.9M 2019 to 672M in 2020
CNN - 650M in 2019 to 619M in 2020
Publishers have shifted to multi-modal models and focusing on subscription growth & advertising revenue. NYTs is a strong example of showcasing how to remain profitable as they shifted from print to digital, then from advertising to a combined subscription & advertising model.
Adverse Effects of Current Advertising Market -
Google and Facebook take 73% of all ad dollars and 99% of all growth.
Some estimate revenue has recently been down 66% in advertising at some publishers
Bots inflicted $7.2 billion in fraud last year.
Over 600 million phones and desktops run ad-blocking.
Publishers cannot seamlessly monetize value added services.
Ads use about 5 seconds of mobile load time on average.
Ads decrease phone battery life by as much as 21%.
Privacy is violated when large media sites host up to 70 trackers.
Malware (malvertisements, ransom-ware) is up 132% in one year.
Application of Blockchain - BAT Use Case
BAT states, "The marketplace for online advertising, once dominated by advertisers, publishers and users, has become overrun by “middleman” ad exchanges, audience segmentation, complicated behavioral and cross-device user tracking, and opaque cross-party sharing through data management platforms."
The Basic Attention Token is the first company to apply blockchain to the advertising industry.
Basic Attention Token attempts to improve the efficiency of digital advertising by creating a new token that can be exchanged between publishers, advertisers, and users. The solution is a decentralized, transparent digital ad exchange based on Blockchain.
The first component is Brave, a fast, open source, privacy-focused browser that blocks third party ads and trackers, and builds in a ledger system that measures user attention to reward publishers accordingly. Brave then introduced BAT (Basic Attention Token), a token for a decentralized ad exchange. It compensates the browser user for attention while protecting privacy. BAT connects advertisers, publishers, and users and is denominated by relevant user attention, while removing social and economic costs associated with existing ad networks, e.g., fraud, privacy violations, and malvertising.
The token can be used to obtain a variety of advertising and attention-based services on the BAT platform. The utility of the token is based on user attention, which simply means a person’s focused mental engagement.
BAT is a payment system that rewards and protects the user while giving better conversion to advertisers and higher yield to publishers. BAT and associated technologies as a future part of web standards, solving the important problem of monetizing publisher content while protecting user privacy.
BAT Key Features -
BAT has an outstanding team, a solid business use case, and potential to grow consistently. There ICO was primarily given to the top creators of the firm. The valuation of the firm, around 300 million, is almost the same since the ICO. Going forward BAT will not see any short-term significant price increases, but steady growth. The dependencies on the price and market cap is correlated to the feasibility of the Brave browser.
A promising benefit to BAT is that they are located in San Francisco - and completely compliant with the U.S. laws. If scrutiny and new laws are incorporated onto the crypto market and other regulations on DEFI, BAT will benefit from this shift and grow as they are not defy related and affiliated to advertising and hi-tech - not fintech.
If your investments are mostly related to DEFI - looking at BAT maybe a solid hedge to those positions.
A 300 million market cap is high related to the newer cryptocurrency market. Comparing to some of the tech firms mentioned previously - (39 billion for Twitter off of 1 billion of revenue) Bat maybe undervalued if proven to work and grow effectively.
Some of the major risks are the usage of its browser. Google Chrome has dominated this market completely and it doesn't appear to be slowing down.
Many reviews have praised the Brave browser however -
"Brave is hands-down the fastest browser I've used this year on any operating system, for both mobile and desktop. Memory usage by the browser is far below most others, while website loading is far faster (Brave claims a 3-6x faster browsing experience than others on the market)" -CNet
If these reviews prove to be accurate and user adoption continue growing, the value of the token should see substantial gains.
Basic Attention Token price today is $0.194215 - It has a circulating supply of 1.5 Billion coins and a max supply of 1.5 Billion coins.