Transforming Advertising Through Decentralization: Alkimi Exchange CEO Ben Putley on Transparence, Trust and Data Control

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As someone who has spent years navigating the complex world of digital advertising, I can confidently say that the traditional model is long overdue for an upgrade. The current system feels like a maze filled with hidden costs, questionable ethics, and a lack of transparency that leaves everyone involved feeling frustrated and taken advantage of.

Over the past few years, the advertising sector has been under increasing scrutiny due to issues such as data privacy breaches, fraudulent activities, and inefficiencies. The conventional digital advertising methods, especially those involving intermediaries like Google and Facebook, have contributed to a lack of clarity for both advertisers and content providers regarding their transactions.

In this text, Ben Putley, as the CEO and Co-Founder of Alkimi Exchange, expresses his viewpoint that the digital advertising sector has been in need of an update for quite some time now. Here, he explains how blockchain technology is transforming the advertising landscape and why it’s crucial for the industry to adapt and grow.

Alkimi Exchange is a blockchain-driven, decentralized advertising platform designed to tackle issues within the digital ad sector. By utilizing blockchain technology, it removes middlemen, lowers costs, and offers transparency in transactions between advertisers and content providers. The platform employs tokenized ad space and smart contracts to streamline payments, ensuring efficiency and fraud protection. Additionally, Alkimi gives users control over their data, allowing them to decide whether to share it for benefits or safeguard their privacy.

The Broken State of Advertising

As a researcher delving into the realm of digital advertising, I’ve come to understand that at its heart, this system relies on intermediaries who reap profits by orchestrating transactions between advertisers and publishers. These intermediaries, such as ad exchanges, supply-side platforms (SSPs), and demand-side platforms (DSPs), not only inflate costs but also create avenues for fraud. The consequences are startling: globally, advertisers are estimated to lose an astounding $65 billion annually due to fraudulent activities like bot-generated traffic and manipulated metrics.

Ben Putley stated that advertisers are essentially investing funds into a system they can’t observe or manage directly. In such opaque conditions, fraud flourishes. Moreover, the absence of responsibility weakens trust, as advertisers question whether their investments lead to genuine audience interaction or outcomes.

In this system, publishers find themselves financially strained because although they are key players who generate content that attracts audiences and sustains the advertising industry, they frequently receive only a minimal portion of ad income due to intermediaries taking a substantial share. This results in dwindling profits for publishers, despite their crucial role within this process.

Users receive little benefit from the system. Many digital advertising platforms view them as resources, gathering their information without permission and bombarding them with irrelevant or bothersome ads. This has resulted in a surge of ad blocker usage, as many people choose to bypass ads entirely rather than interact with an environment they find untrustworthy.

People believe they’re being taken advantage of, and it’s hard to argue with them. They contribute their personal data, but often don’t receive any direct benefits from the value that data creates,” he remarked.

The innovative blockchain technology presents a clear and distributed approach to addressing several challenges within the advertising sector. In contrast to the present system which operates in an opaque manner, blockchain introduces a transparent, open-to-all record system. Every ad impression, click, and transaction within this system can be independently authenticated, offering greater transparency.

Advertisers benefit from this transparency by gaining immediate insight into where their budgets are being allocated, with the confidence that their investments are genuinely reaching real users instead of bots. For publishers, blockchain technology guarantees fair payment since transactions are automated and verifiable. Each transaction is recorded on a decentralized system for auditing purposes, making it resistant to tampering or manipulation.

According to Putley, our unique tool called Ads Explorer offers full visibility into every ad transaction made through Alkimi. Each transaction undergoes verification by a decentralized network of validators and gets recorded on the Ethereum blockchain. This means that all spending is fully traceable and open for audit, thereby eliminating any confusion or ambiguity often found in traditional systems.

Reducing Costs by Eliminating Intermediaries

The inefficiencies in today’s advertising system are mainly due to over-reliance on intermediaries, who often take substantial portions of the ad spending budget. This results in increased costs for advertisers and reduced earnings for publishers. It’s estimated that approximately half of an advertiser’s budget (around 47%) is consumed by these fees.

Putley explained that decentralized advertising platforms are revolutionizing the industry by cutting out intermediaries, resulting in reduced fees as low as 3-8%. This is more than just a minor adjustment; it’s a transformative shift,

By reducing costs, this advantage is mutually beneficial for advertisers and content providers. Advertisers have the opportunity to channel more funds into meaningful interactions, whereas publishers can keep a bigger portion of the earnings, which they can then utilize to create superior quality content.

In essence, smart contracts play a pivotal role within this setup. Essentially, they function as self-governing agreements that automatically handle transactions between advertisers and publishers. The conditions for these transactions are predetermined, such that the contract will only execute payment if a user interacts with an ad or completes a purchase.

“Smart contracts ensure fairness by removing the need for intermediaries. They execute transactions instantly and without bias, based entirely on the terms agreed upon.  Smart contracts also add a layer of security, as they cannot be altered once deployed, providing an immutable and trustworthy system for all parties,” he noted. 

Decentralization goes beyond enhancing transparency and lowering expenses; it’s equally significant for giving power back to the users. Presently, users function more as spectators than active decision-makers, with little influence over how their information is gathered and processed.

In a different approach, blockchain technology empowers individuals by allowing them to control their own data-sharing decisions and potentially earning rewards for their involvement.

According to Putley, it’s crucial that individuals get to decide what happens with their personal data. By embracing a decentralized system, users can choose whether to share their data for benefits or maintain their privacy entirely.

Adopting a user-centric strategy not only ensures privacy but also fosters a fairer and mutually advantageous environment. Users who opt to disclose their data do so in an open and transparent manner, receiving remuneration as a result, while advertisers can tap into more precise and involved demographics. In the words of Putley, it’s all about establishing trust and designing a system where everyone perceives they are gaining some sort of benefit.

Challenges to Adoption

Although it holds great promise, decentralized advertising encounters numerous challenges. One of the main obstacles is the challenging learning process linked to blockchain technology.

Some advertisers and content providers might be reluctant to switch to new, seemingly complicated or untested models because they’re accustomed to traditional methods.

In his words, “The main hurdle we face is breaking through inertia. People tend to resist change, even when it’s clear that the advantages are there. At Alkimi, we’re tackling this issue by designing our platform to be compatible with current advertising technologies, thereby making the transition as effortless as possible.

To effectively tackle this issue, it’s crucial that platforms focus on providing education and fostering compatibility. Decentralized solutions should effortlessly blend with current processes, minimizing obstacles for advertisers and content creators as they adapt to these new systems.

Live exhibitions, during which Ben and his crew display their methodology, significantly contribute to promoting acceptance by illustrating the real-world implementations of blockchain technology.

He pointed out, “What we’re doing is turning ideas into something real and touchable. We’re demonstrating that decentralized advertising isn’t merely a concept; it’s an active system at work.

Opponents of blockchain frequently highlight its high energy usage and limitations on scale as possible disadvantages. Yet, technological progress has significantly mitigated a good number of these issues.

Employing Layer-2 scaling methods allows decentralized systems to handle large numbers of transactions, all while avoiding the ecological expenses that were common in older blockchain architectures.

Ben pointed out that advertising is a large-scale sector, and our platform has been specifically engineered to manage such volumes with efficiency, all the while conserving energy,” (paraphrased)

Enhancements in decentralized systems are making them more feasible and placing them as an eco-friendly option over conventional advertising, which contributes substantially to global greenhouse gas emissions.

Alkimi’s Vision for the Future

In the ever-changing landscape of advertising, the argument for a decentralized approach becomes more compelling. The existing structure faces issues of inefficiency, mistrust, and ethical dilemmas that are becoming increasingly untenable. Blockchain technology presents a potential solution to these problems by fostering a system based on transparency, streamlined processes, and fairness.

Although we’re just getting started, there’s definite progress being made. It’s not just a passing fad; the movement towards decentralization is where the industry seems to be going, as stated by Putley.

The success of this shift will depend on continued innovation, particularly in making blockchain systems more accessible and scalable. Platforms must also focus on delivering measurable benefits to advertisers, publishers, and users alike.

Advertisers can expect improved return on investment and decreased expenses. Publishers, in contrast, are looking at reasonable payment and consistent income streams. Lastly, users will benefit from more choices, enhanced privacy, and increased respect for their preferences.

In essence, our goal is to build a setup where success is shared by all parties involved. This is the idea behind decentralized advertising, and it’s what we are diligently striving to bring to fruition, as Ben put it.

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2024-11-29 18:18