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The End of Ad Bidding

Real-Time Ad Bidding (RTB), the system that manages the ads dilated to match the viewer’s profile, is forecasted to grow by 32% between 2019 and 2024, reaching an annual spend of over $27 billion by the end of that period. So why talk about the end of ad bidding when researchers predict such a healthy growth.


On the one hand, as the ad bidding market grows, so do a large number of related issues that directly affect ad bidding ROI, and for which solutions are at best late, and typically with a short term value. In addition, as the market saturates, the ROI diminishes even if all the problems are solved. On the other hand, RTB currently has little competition that offers the flexibility, ease of use (though this is diminishing as the algorithm complexity increases), analytics, and potential for immediate results.


New products, such as 2key SmartLinks, are emerging. As new products with higher ROI, similar practical advantages - ease of use, flexibility, analytics, and immediacy - plus additional and innovative features materialize and gradually conquer market shares, forecasts will have to be revised.


SmartLink, for example, takes advantage of blockchain technology to add self-management, incentivized referral campaigns, full-control over price per click/conversion and other features.


Let’s examine the following aspects of online marketing with:

- The Growing pains of Ad Bidding:
  • Budget loss
  • Steep learning curve
  • Lack of Visibility
  • Dehumanization
  • Social Injustice
- The Current Alternative to Ad Bidding - Referrals
  • Referrals’ Conversion Statistics
- The New Alternative: SmartLink, the Smart-Contract Managed Incentivized Referral Campaign

The Growing Pains of Ad Bidding

Whether on Adwords, Amazon, Facebook, other social media, or even travel sites like booking.com, mastering the art of ad bidding can make or break your business, and the size of your ad budget is a key factor in gaining exposure.

Born out of the advent of online advertising on web 2.0, ad bidding today, and its corollary Real-Time Bidding (RTB) are at the core of any paid marketing strategy, and advice on how to maximize ad bid results abound on the Internet.


At it’s simplest, ad bidding is a system for buying and selling online display advertising placements through an auction mechanism, sometimes tempered by a quality score.  The ad content is displayed when the content creator wins the bid.

Media exchanges connect publishers (sellers) with advertisers (buyers) typically through an automated system run by various algorithms to manage the multiparty bids and allocate slots to bid winners.


Despite its apparent convenience, ad bidding today is fraught with problems


  1. Budget loss
  1. Steep learning curve
  • Advertising across platforms requires learning each platform system. 
  • Keeping updated about the constant algorithm improvement across all platforms is near impossible.
  • Efficient use implies integrating complex and expensive SaaS or software

  1. Lack of Visibility
  • Media buyers are the ones purchasing display slots from publishers and reselling them to advertisers or to other media buyers, creating a tangled web that lacks transparency and complicates traceability.
  • This lack of traceability requires advertisers to trust that their content will not be displayed in an unsavory publication, or next to some other content that weakens or damages their message. Think for example about an ad for plastic toothbrush displayed next to an article about the environmental cost of used plastic toothbrush disposal, or sponsored content about remote camping location next to an article about the importance of social ties. Or this :-)
  • Difficulty in checking the quality of the data complicates ensuring that the targeting indeed reaches the intended population segment.

  1. Dehumanization
  • Lack of imagination prevents uncovering new markets. As the vast majority of the ad bidding ecosystem is based on algorithms analyzing past behavior, and on various algorithms talking to themselves, ad targeting is - at best - based on data of varying degrees of freshness. This is not ideal to uncover new potential market segments.
  • Turning consumers into products designed to buy instead of seeing them as human beings with the ability to form connections

  1. Social Injustice
  • Display slots are increasingly concentrated in the hands of mega-corporations siphoning the entire advertising wealth, which affects independent media obligated to rent out their display space through them.
  • On social media, the platform makes money from users’ activity in sharing promoted content, the user who performs the sharing receives nothing. 


With such a long list of problems plaguing the ad bidding market, there should be alternative solutions, yet, until today, it seemed the only other option to gain online visibility was to rise 

through ranking high in search engines and reach the coveted first page. Ranking high in search engines, even for arcane long-tail keywords, takes time and effort, producing content in line with search engine ranking algorithms, so it works best with solid knowledge of SEO methodology and best practices, white hat techniques, etc.
Yet, even the most gifted SEO practitioner cannot guarantee to reach the first page of any search engine at short notice.

With the current system, in the paid advertising system, your ability to outbid competitors is always a deciding factor in getting your content displayed in prime locations, and in the SEO field, climbing up SERP ranking requires either having the time to produce content or the means to pay someone to do so.

As a result, the quality of your content, product, or service has little to do with gaining visibility, whereas the depth of your pockets can get you prime location at very short notice.

The Current Alternative to Ad Bidding - Referrals

All paid advertising channels today have one thing in common. They rely on algorithms to allocate the ad space, based on data of various quality mostly bought from data suppliers. The one element lacking from their system is human contact. AI-powered machines are tasked with understanding the human mind and leverage that knowledge to maximize their human “subjects” consuming tendencies.

Yes, paid advertising is efficient, but its efficiency pales in comparison to direct referrals from a known contact. Also called Word of Mouth (WOM), referrals are where the value of actual human contact shines.

  1. Referrals’ Conversion Statistics

 

So yes, referrals are the holy grail of marketing, but they are not always easy to implement. Referral software packages are costly and require integration. The integration requirements limit the flexibility of the type of content that can be included in a referral campaign and typically does not include incentivized referral for editorial content, reducing the options to boost editorial content with paid advertising through Real Time Ad bidding, with all the downsides described above, or to trust readers to elect sharing it with no incentive.

Yet, incentives have a major effect on maximizing referrals growth and spread.

  1. Incentives’ Impact on Referral Campaign Effectiveness
  • More than 50% of people are likely to give a referral if offered a direct incentive Software Advice
  • 39% of respondents say monetary or material incentives such as discounts, free swag, or gift cards greatly increase their chances of referring a brand. –  Software Advice
  • 65% of consumers say that receiving rewards impacts their frequency of purchase.
  • 64% of consumers say that rewards impact how much they spend.
  • 69% of consumers say that they’re more likely to try a brand if it gives rewards.

 

The New Alternative: SmartLink, the Smart-Contract Managed Incentivized Referral Campaign

Building on the new technological options opened by the advent of blockchain technology, SmartLinks eliminates the entry barrier to referral campaigns and opens its door to everyone.

Without getting into the technical details,  a SmartLink is an enhanced URL, where every interaction with the SmartLink is recorded and used to distribute rewards to those who share the SmartLink when a conversion occurs. Entirely self-managed, once deployed, the SmartLink open-source smart contracts manage the entire tracking and reward distribution process.

Taking into account the effort of all the people active in a referral chain, SmartLinks rewards each one of them according to the reward distribution model selected by the SmartLink creator.

Simply copy-pasting a regular URL into 2key’s interface is all it takes to turn it into a 2key SmartLink. Alternatively, the 2key interface lets users create and design brand new content straight from the platform, enabling anyone, even without a content source, to create and share ideas, services, or anything with the benefit of incentivized referrals.

There are different types of SmartLinks:

  • 2key SmartLink: entirely free, 2key SmartLinks reward referrers with reputation points that translate into 2KEY tokens rewards with a monetary value. The idea behind the reputation system is to encourage referrers to share SmartLinks only with people potentially interested in the SmartLink content. To further motivate referrers to focus on appropriate recipients, spamming behavior is penalized. That is, 2key SmartLinks are in fact an incentivized, no-spam, referral campaign at zero cost to the SmartLink creator - No software to purchase and integrate, no cost to create reward. Since the elimination of deployment cost, Smartlinks are a genuinely free incentivized referral campaign.
    2key SmartLinks creators can follow the way it is shared in real-time from their 2key dashboard.
  • PPC SmartLink: enables the PPC SmartLink creator to add a monetary incentive that rewards the entire referral chain leading to a click. In short, every PPC SmartLink is its own referral campaign.PPC SmartLink creator unilaterally decides the price of a click, defines the target audience if relevant, and selects the reward distribution model.
    Blockchain enhanced anti-fraud mechanisms all but eliminates the typical fraud-related Real Time Ad Bidding ROI losses.

At the time of writing, there are other goal-specific SmartLinks, for which zero-cost deployment is being developed and soon to be available.

- Donation SmartLinks - Manages crowdfunding campaigns and provides 3 types of rewards:

  • Reputation Mining rewards that automatically enrolls referrers and converters in the reputation mining program, where their activity earns or loses them points that translate into 2KEY tokens.
  • Gratitude tokens: an eternal token of gratitude, these tokens have no monetary value. They are created by the Donation SmartLink creator and distributed to donators.
  • Financial incentives: Optionally, a Donation SmartLink creator may decide to distribute a percentage of donation to the people in the referral chain leading to the donation 

- Zoom SmartSession: created in collaboration with Zoom, SmartSessions allows SMBs, service providers, teachers, instructors, therapists, and others to generate paid video service sessions. Fully integrated with the 2key incentivized referral system, it also collects payments for the session and distributes referral rewards for those helping reach the target audience.

- Token Sale SmartLinks: Designed to facilitate getting the word out about your token and associated project, Token Sale SmartLinks manage all aspects of your token sale campaigns, from token creation (if needed) to payment management and reward distribution. As for all SmartLinks, the Token Sale SmartLink creator unilaterally decides the percentage of each purchase to be dedicated as a reward for referrers and selects the reward distribution model.

Many additional task-specific SmartLinks are in the pipeline and will be available soon. They will be announced here as they are made available, or will appear as options in the SmartLink Creation menu on 2key.

2key is a Layer2 solution to Ethereum Blockchain, that transforms today’s HTTP links into Tomorrow’s Decentralized Web. Creators of the SmartLink.

Learn more @
2key.network
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