2. Summary
Digital advertising needs an upgrade. The exponential growth of
programmatic advertising has led to a web full of risk and
frustration.
• It requires users to sacrifice their privacy
• It consumes data and slows page loads
• It fills the web experience with fraud, malware, and uncertainty
Brave and its partners believe there is a better way. They share a
vision for an inclusive and rewarding global private advertising
platform that:
• Respects people’s privacy by design
• Gives brands direct connections to users, through which they
can provide rewarding experiences
• Ensures publishers keep a fair share of revenues
• Avoids wasted spend by showing ads only to people who want
to see them
• Rewards users for their attention
This paper will show why the time has come for this big new idea,
and how it works.
3. A radical solution for broken digital advertising | 3
1. Introduction
It’s time to reboot digital advertising. Users,
publishers and advertisers deserve a system that
respects privacy and shares the rewards fairly.
Digital advertising isn't working.
People have growing concerns about their loss
of privacy. They don’t know who can access their
data, and they are frustrated by the proliferation
of disruptive ads that slow page loads and drain
batteries.
Meanwhile publishers face diminishing returns
from digital advertising – and see their
audiences increasingly swallowed up by
Facebook and Google.
Finally, advertisers face new risks to brand
safety. These risks are compounded by increased
fraud, malware and uncertainty over where their
ads are served – and even if they are seen by
real people. Many brands have lost faith in the
digital advertising they buy, while being
provided with few alternatives.
The current ecosystem appears set up to serve
the Google/Facebook duopoly, and the
hundreds of shadowy intermediaries that take a
cut of every click.
It’s time for something better.
Brave has spent the past two years building a
new system with the participation of leading
publishers including The Washington Post, Dow
Jones, The Guardian, Vice and Slate – and
privacy-minded partners including Qwant,
DuckDuckGo, Uphold, Tresorit and TAP.
This alliance has created an alternative approach
to monetizing content, which invites users to opt
in to see ads that are private and rewarding.
Brave monitors user attention locally, and uses
machine learning to match ads directly on the
user’s device.
This process is private by design. Brave puts a
smart ad server directly in the smart device. So,
under this new system, personal data about the
viewer stays local. It will never be shared with
publishers, advertisers or other third parties.
Meanwhile, all parties participate in a fairer
division of rewards. Users can receive up to 70
percent of the ad revenue (depending on where
ads are shown). The system allocates rewards in
Brave’s own blockchain-based Basic Attention
Token or BAT. Users can spend the tokens with
the publishers they like best.
Brave and its partners believe this alternative
system can start a new era for digital
advertising.
4. 2. What’s wrong with the current digital
ad system?
4 | WHITEPAPER
Privacy, malware, fraud, duopoly… how the
dominant programmatic model fails users,
publishers and advertisers.
USERS
It's hardly controversial to claim that users are
frustrated with programmatic digital advertising.
They are deeply worried about privacy intrusion,
and resent ads that slow down their connections,
consume their data and drain their batteries.
They have expressed their dismay by
downloading a myriad of ad blockers. More than
a quarter of US internet users now block ads,
says eMarketer, up from just under 16 per cent in
2014. However, on many sites catering to more
tech-savvy users, the numbers using ad blockers
can reach 50 percent.
PUBLISHERS
In the current digital ad climate, advertisers find
it easier to reach large targeted audiences via
Google and Facebook than on thousands of
smaller publisher sites.
This helps explain why the aforementioned digital
giants utterly dominate the market. According to
eMarketer, Google and Facebook earned around
$65 billion from digital ads in the US alone last
year. That's a 58 percent market share.
And this dominance has become self-
perpetuating: as advertisers choose YouTube,
Facebook, Instagram et al, publishers move their
content to these platforms, and users stay on
these platforms for longer.
Clearly, publishers have taken a huge financial hit
as content has gone digital. And even those who
have maintained their audiences face the
prospect of a 'race to the bottom' in the prices
paid for clicks. In a 2018 programmatic ad study
by Digiday, US publishing executives said pricing
was their biggest concern.
ADVERTISERS
In any ad system that pays out on traffic and
attention, one obvious question arises: how do
you know the traffic is genuine? Hackers exploit
this uncertainty. They use malicious bots to
produce bogus websites that fool advertisers.
They install remote-controlled software on
compromised PCs that siphon billions of dollars
each year from the ad industry.
A 2016 study by WhiteOps estimated that bots
inflict $7.2 billion in damages to digital
advertisers per year. The World Federation of
Advertisers says ad fraud could cost advertisers
$50 billion a year by 2025.
Many advertisers are also questioning the
fundamental promise of programmatic
advertising: targeting. The system can be clumsy,
such as when people are frequently shown ads
for products they have already purchased.
Finally, when programmatic algorithms make
decisions about where ads are placed, the
results can be disastrous. Many brands have
faced PR crises when their ads have run
alongside inappropriate content, for example.
• More than a quarter of US internet users
block ads (eMarketer)
• Up to 50 percent on average of a user’s
mobile data is consumed by ads and
trackers (New York Times analysis; Pew
Research Center and comScore)
• Large media sites host as many as 70
trackers.
• Google and Facebook earned $65 billion
from digital ads in the US alone in 2018
(eMarketer)
• Bots inflict $7.2 billion in fraud a year
(WhiteOps)
5. A radical solution for broken digital advertising | 5
3. How Brave's system fixes the problem
For all the flaws in the current system, the truth
is: consumers do accept advertising. They know
it is necessary to fund great content.
As such, they will happily view ads from brands
as long as they can opt in to see them. Even
more so when the ads are relevant and privacy-
respecting.
Meanwhile, publishers and brands need fair and
reliable digital advertising. They know there’s a
limit to how many paid services consumers will
support.
Brave believes it is well-placed to take action on
this issue. It designed its flagship browser
product with privacy in mind. Today, the browser
has an audience of five million monthly active
users – and growing.
Brave contends that its browser can tackle the
big challenges of digital advertising. Here’s how.
USER PRIVACY
The Brave advertising platform asks users to opt
in. It then monitors their browsing habits to see
where their attention goes. It uses this
information to show them relevant ads.
However, all the targeting is done inside the
browser. Publishers and advertisers never know
anything personal about the viewer. And neither
does Brave Inc.
TARGETING
Initially, Brave's system will infer a person’s
interest in ad-related subjects from the content of
websites they visit. It will calculate an ‘Attention
Value’ for the ad based on duration and pixels in
view in proportion to relevant content.
Finally, it will anonymously match ads and
customer interests, using local machine learning
algorithms.
THE GOOGLE/FACEBOOK ISSUE
Advertisers favor Google and Facebook because
they believe they can better target users on
these platforms. However, in practice, the
targeting is not always accurate. For example, in
2016 Facebook was revealed to be inflating the
average viewing time for videos on its platform.
Brave’s system returns highly accurate targeting
to every participating publisher.
6. 6 | WHITEPAPER
* Mobile Roaming: Regulations, Opportunities & Emerging Sectors 2017-2022 — Juniper Research
REVENUE-SLICING PROGRAMMATIC THIRD
PARTIES
There are hundreds of intermediaries in the
current ad ecosystem. They are the companies
that decide which person sees which ad when a
click or page load happens.
These third parties take a cut of revenue from
every ad served. That means less revenue for the
publisher and higher costs for the advertiser.
In Brave’s system, there is no role for these
intermediaries. Brave itself manages all the ad
serving, data management and publisher
negotiations.
BOTS/CLICK FRAUD
Brave’s browser already blocks conventional ads
and trackers by default. This reduces the ability
of nefarious firms to smuggle in malware and
bots.
And for the new ad system, Brave plans to
mitigate possible ad fraud with cryptography,
better client-side integrity, and transparency
achieved through the project being open source.
INCENTIVES (USER REWARDS)
How can any digital ad system defeat the
historic reluctance of people to engage with
ads? Brave’s system has three answers.
First, users voluntarily opt in. This provides a
self-selected group with a positive attitude to
ads. Second, it accurately tracks user interest, so
ads should be genuinely relevant. Third, the
system rewards all users financially. It will pay
them up to 70 percent of ad spend (depending
on the placement) using Brave's own
blockchain-based token, BAT.
How the new system works:
A user walk-through
1. A Brave user opts in to agree to see ads
2. As she browses, she will occasionally see
pop-up notifications from relevant
advertisers
3. When she clicks on an alert, she will be
redirected to a private tab showing the
ads. These ads do not merely replace the
banners on websites.
4. She can customize her settings to
determine how often she sees these
notifications.
5. She can check her BAT wallet inside the
browser to see how much BAT she has
earned from watching ads
7. A radical solution for broken digital advertising | 7
4. Who is participating?
Brave's challenge is to build support among its
stakeholders. It has already made progress.
USERS
More than five million people browse with Brave
every month on mobile and desktop. More than
10 million users have downloaded the Android
version.
In summer 2018 a small group of testers trialled
the ad/rewards system through the beta and
dev builds. Brave expects to roll out the service
to all Brave browser users in 2019 on both
desktop and mobile platforms.
PUBLISHERS
Over the last two years, Brave has worked on
building its new system with privacy-minded
partners such as, Qwant, Uphold and Tap.
But in theory any publisher and even individual
influencers/creators can participate in the
program. By December 2018, Brave had confirmed
the support of 28,000 verified publishers, and
potential access to 47,420 total publishers.
Brave is also lining up major brand advertisers
eager to participate in the rollout of the first
global privacy-respecting ad platform.
REWARDING USERS AND PUBLISHERS: THE
BASIC ATTENTION TOKEN
Brave's new ad system depends on two crucial
components. It has to:
• Monitor user attention accurately
• Distribute revenue fairly
To meet these important requirements, Brave
created its own blockchain-based Basic
Attention Token (or BAT for short), which is
based on the Ethereum Token Standard.
It's easiest to think of BAT as a token that
represents user attention. This makes it an ideal
unit of account between advertisers, publishers
and users in the Brave system.
Naturally, BAT can be bought, sold, and
exchanged into fiat money like any other
blockchain-based token.
Users can accrue BAT and keep it in a dedicated
wallet inside the Brave browser. They can reward
their favorite content creators or spend on
premium content and services.
The Brave ad system: the
story so far
Brave launched its BAT token sale in May
2017 as the first stage of creating its new
vision for a privacy-respecting ad ecosystem.
A year later, it began showing 250 pre-
packaged ads to a small number of trial
users.
In January 2019, Brave gave anyone using
the developer version of its browser the
option to see privacy-respecting ads.
The service will soon be live to all users. In
the first phase of the rollout, users will
receive 70 percent of the ad revenue, with
Brave receiving the remaining 30 percent.
In the future, Brave will extend the system to
its initial 28,000 verified publishers and
creators. They will be able to feature private
ads on their sites or channels. When ads are
displayed inside a publisher’s content, the
publisher will keep 70 percent.
Brave takes 15 percent and the user keeps 15
percent. The system allocates rewards in
Brave’s own blockchain-based Basic
Attention Token or BAT.
The solution will eventually be available
across all digital devices, PC, Mac and Linux
computers, Android and iOS phones.
8. 5. In summary
Brave and its partners are ready to reboot digital advertising with the first
global ad platform that respects the privacy of users, delivers value for
advertisers and rewards publishers fairly.
Please visit Brave at at MWC19 Barcelona in booth 8.1A67 near the main
entrance to hall 8.1. To contact us ahead of time to arrange a meeting email us
at bizdev@brave.com. Media requests can go to press@brave.com.