Stay with us here. Despite the geeky nature of the subject, Blockchain technology, cryptocurrencies, and ICOs (Initial Coin Offering) are receiving a lot of attention, and will soon demand more of yours. This is largely thanks to the meteoric rise of Bitcoin’s value in the last few years, and its promise to bring about a fairer economic world.
The 9 year-old crypto currency is trading at around $4900 at the time of writing, up 680% from same time last year. Analysts are suggesting Bitcoin will change how we will do business, legislation, and everything else that currently requires a central authority. It's even likely it will change the way we approach advertising too.
Why do I get the feeling that the best hedge against a Sanders or Trump nomination may be buying bitcoin?
Recently, agencies started looking at the blockchain and exploring how they can exploit the new phenomena to advertise their products.
Advertising agency Possible Moscow, for example, created a Clio gold-winning piece titled Coffee Is Not A Drug for Chernyi (Black) Cooperative. To reinforce a brand association with underground, illegal black market drugs and hacker culture, the specialty coffee was only available to purchase on the dark web using the tor network and bitcoins. The campaign was an enormous success, reaching 1.5M people on the first day.
Burger King went as far as launching its own crypto token to refresh the good old collect points to win prizes promotion mechanics: WhopperCoin. The new coin would be given away to customers of Burger King products, and can be used to buy burgers, or be traded on the free market.
Besides ad agencies, ad technology companies are also experimenting with ideas to reinvent the advertising and media industry by launching coins, such as the BAT (Basic Attention Token), and AdEx (Decentralized Ad Exchange). These projects are trying to cut out the middle man (ex. Google), and build a peer to peer interface between content creators / media platforms and advertisers, using deterministic contracts.
Blockchains currently can only serve niche markets, because they don't scale to a global level...yet. However, if the scaling issues are resolved, blockchain technology will likely change the way any system requiring trust works. Decentralized trust allows industry players or community members to get rid of gate keepers and enforcers, and rely on the immutability of the blockchain to register coded agreements, and the determinism of smart contracts to execute them.
Here are a few areas how cryptocurrencies will influence advertising:
Currency as form of expression and media platform
It’s likely various crypto currencies will not only be a way to transfer value over the internet without a third party, but they will also be a form of expression. Subcultures will pride themselves by using a certain token to conduct business, to verify identity, to manage reputation, and to demonstrate their political and idealogical stance through the monetary policy coded into the coin of their choosing. Ad agencies will use currency as a new media platorm to deliver messages to their well defined target markets.
Clients and creative teams will find each other using systems that carefully register effectiveness, reach, and other measurable metrics of the agency's work. The data will be independently verifiable, and applied to industry players in a consistent manner. Individual creatives, agency offices / networks, and brands will all have real time reputation scoring, that can be publicly monitored, and will likely drive renumeration. Award show results, say, will feed into algorithms determining reputation scores, and thus will likely matter more than ever.
Media platforms and content creators will be paid in real time through peer-to-peer microtransactions made possible by crypto currencies (and second layer technologies like the Lightning Network), by advertisers to encourage evangelism. I envision brands live bidding during streams of popular Youtubers to drive the discussion in their direction. And, at the same time, users will micro-pay content creators to get rid of annoying advertisements. It will be a live battle for the audience's brain cycles.
VR mixes with IRL
Virtual worlds and games will routinely feature crypto tokens. These tokens could be sold and bought on exchanges, or spent on real world items no matter what currency the store accepts. This is thanks to the upcoming technology called "atomic swapping," which allows person-to-person exchange of currencies and tokens without a third party. Brands will be able to engage and reward players in virtual worlds, and create an impulse for real life purchases.
It will be interesting to watch what creative minds around the world will come up with in this brave new world of crypto economy in the next decade. Keep following Ads of the World for the latest ideas, and Clio Awards winners gallery for the very best.