It’s tough out there for a brand.

There are so many potential customers who would love your product or service, and you want to share the story of how you can help them, but none seem to have a spare second to listen. This leads to some desperate clamoring for attention by a myriad of companies, prompting even more brazen tactics to stand out, resulting in unwanted interruptions for the consumers and a persistent humming in their ears from the sea of ads that have become nothing more than a background signal of white noise.

Consumers are fed up and they are fighting back against this onslaught of messaging. That’s why CPC’s keep going up while ROI continues to decline. It is enough to make a CEO throw his hands up in the air and say, “What else can I do? Do I really have another choice but to bombard the public with ads?”

The good news is that you do have another option. There is a solution out there that enables businesses to cut through the clutter and connect with consumers on a level that preserves their dignity and sanity.

But before we can get to that, we have to examine why the current method is broken.

No Consent & The Rise of Ad Blockers

Brands never ask for permission to communicate with the public, they just blast their message loudly in the hope that somebody out there is listening. But it is precisely this incessant noise that has provoked consumers into downloading ad blockers.

In North America alone, 38% of internet users have installed and utilized an ad blocker on at least one of their devices. That is over 200 million users proactively taking steps to avoid online advertising. Ask yourself, do you really want to continue to invest so much money and effort into an advertising medium that is being increasingly nullified?

The power of choice cannot be underestimated. When we don’t have a choice, we end up hating the one that is made for us; but when we are given a choice, we will defend it fervently.

So, could it be that if you only asked for permission and gave a reason to spare a moment of his or her time, you would have an attentive prospect on your hands instead of a disinterested chump?

The Lights Are On, But Nobody Is Home

An ad pops up onto your screen, taking valuable real estate for the content you’re trying to read. Then another, and another, and another. Shoppers are getting burned out by seeing ad after ad after ad, so by the time they see a product that might actually help them, they just scroll past, blind to yet another ad.

What these advertisers fail to grasp is that just because a person has physically seen an ad, that doesn’t mean that it was mentally registered at all. The unconscious mind may just filter it out so that the conscious mind can focus on the task at hand. Marketers are working so hard just to get eyes on their ads, they forget what the whole point of advertising is: To communicate a message.

That message could be, “Buy our product” or as simple as, “Learn to recognize our brand.” The point is, if a person sees an ad but doesn’t mentally register the message, then it was ultimately a pointless ad. Advertisers need to learn to move the goalpost to what the real objective should be: Having our message understood by the consumer.

By now you are probably thinking, “How am I going to reach this new goal post when I struggled so hard just to get my ads seen?” Well, you might want to try giving them a reason to engage so that they are mentally present.

Opt-In Value Exchange

Initially, only pop-up ads were being blocked by ad blockers. This has now evolved to nearly all kinds of ads being blocked by programs that learn how to detect and prevent intrusive marketing as you browse. Some websites are fighting back by locking down their content unless all ad blockers are disabled, but data shows that this has only backfired. Sites using these ‘whitelist blockers’ see significant reductions in traffic and increased complaints by users, creating a lose-lose situation for both sides.

Advertisers are now locked in this war with the public and ad-blocking software. So what is a brand to do? How do we get consumers to truly absorb our message? What can we offer them as a reason to engage and give their consent to be marketed to?

The answer is to quit the war altogether and pivot to something new: Opt-In Value Exchange.

Permission’s Opt-in Value Exchange is advertising and marketing redefined into an experience that consumers feel in control of and are compensated for in ASK cryptocurrency. Using this model, users control which advertisements they see and how their data is used. This provides a more relevant advertising experience for the user and higher engagement, as these users are actively choosing to view the ad.

This all results in a win-win for brands and consumers. Brands get to communicate their message to a targeted and attentive consumer, while consumers get compensated in ASK and feel at peace because their consent was given and they know that their personal data is safe in their own hands.

So stop trying to find new and innovative ways to annoy consumers into becoming customers. Instead, treat them like a real person and communicate a real message after asking for permission. For more information on Permission and Opt-in Value Exchange, we encourage you to read our whitepaper.

According to a 2017 report conducted by Juniper Research, ad fraud is worth around $19 billion a year, or $51 million per day, and this figure is expected to rise and surpass $44 billion by 2022 — a figure north of $100 million per day.

This makes ad fraud the most lucrative form of cybercrime, and because of this, we can only expect threats and methods to continue to accelerate in popularity and sophistication with each passing year[*].

The scope of ad fraud is numbing, and it affects every portion of the web via domain spoofing, fake ads on websites, fake mobile app installs, and more. A study released by AppsFlyer in 2018 found that 11.5% of all marketing-driven installs were fake[*], and in 2015 for every $3 spent in digital advertising, $1 is estimated to have gone to fraudulent enterprises[*].

Ad fraud is a monumental issue facing everyone from the internet giants like Google and Facebook to local businesses attempting to run profitable ad campaigns. There are incentives to reduce fraud and maintain honest markets on all sides, although with many types of fraud, search engines reap short-term profits.

We’re going to cover the definition of ad fraud, who usually commits ad fraud, the major types of ad fraud, and most importantly, what your team can do to reduce your risks.

What Is Ad Fraud?

Ad fraud is any attempt to manipulate or game the digital advertising system for financial reward.

Ad fraud includes everything from hidden ads to what’s known as invalid traffic and includes things like invalid clicks, installation fraud, botnet attacks, etc.

The popular types of ad fraud change in style and sophistication every year. Fraudsters are sort of like a virus — the more you fight them with targeted vaccinations, the more the bad faith players resist and build up defenses.

It’s not only important to understand what types of ad fraud there are, which we will cover momentarily, but also who could be committing them against you.

Who Commits Ad Fraud?

Here are a few common types of ad fraudsters:

1. Rogue hackers and sophisticated criminal enterprises
2. Angry ex-employees
3. Political activists (usually only for larger companies)
4. Competitors looking to spike costs for their competitors
5. Unhappy customers

Like all crime, ad fraud falls into two camps: organized and unorganized.

Unorganized ad fraud is typically negligible and extremely difficult to detect due to the manual and personal nature. Organized ad fraud can be much more damaging but is being pursued by the ad platforms and DSPs you’re working with as well.

The types of fraud and sophistication vary according to the type of person or organization they are. For example, an angry customer may click a few ads knowing they are making you pay for those clicks, but they wouldn’t set up an entire botnet with masked and unique IPs designed to farm clicks.

Who Is Most Susceptible to Ad Fraud?

While ad fraud affects everyone, there are industries where it is more rampant. Industries with extremely competitive search terms and strict geographical boundaries are most at risk. Some of these include:

1. Law firms (sometimes clicks can be worth up to and over $600!)
2. Home renovations or interior decorating
3. Doctors and dentists
4. Any other professional service with an extremely high customer lifetime value
5. Companies with outdated and vulnerable websites/security systems

Those click prices sound insane, but it makes sense when you think about it. If a lawyer can make $10,000 off of a client, then even paying for 10 x $600 clicks would still yield $4k in revenue if they land the client. It’s also worth noting that these extraordinarily high click fees aren’t set by Google; they are strictly a function of market competition and supply/demand calculations.

Unsurprisingly, the more you spend on digital ads the more you can be burned by ad fraud. It’s important to keep this in mind as you scale your enterprises to make sure you are getting a reliable ROI from your marketing efforts.

The Major Types of Ad Fraud You Need to Know About

There are many different types of ad fraud, from competitors attempting to waste their competition’s money through click fraud campaigns to incredible botnet farms that can imitate hundreds of thousands of IP addresses.

Here are the basic ad fraud types you should have on your radar:

Click Fraud

Click fraud is an umbrella term for any type of fraud that abuses or manipulates clicks to make a profit. Common examples of click fraud include:

1. A competitor repeatedly clicking on expensive search term ads from their competitors.
2. Faux websites with bots that click into ads and immediately bounce away from the advertiser’s page, making the publisher money.
3. Networks of fake websites and “unique” IP addresses that publish and click on your ads and charge you money.
4. Annoyed employees who click on your ads.

Cookie Stuffing or Affiliate Fraud

Cookie stuffing or affiliate fraud occurs when bad faith players stuff URLs with affiliate strings that mimic conversion events and initiate affiliate kickbacks without actually being legitimate.

When executed correctly, cookie stuffing makes your campaign look like it’s doing fantastically when in reality you are losing money. If you notice extremely high conversion rates but aren’t receiving that feedback from your sales team or sales reports, then you may be a victim of affiliate fraud or cookie stuffing.

Click Hijacking

Click hijacking occurs when mobile malware is buried inside a user’s phone via legitimate-seeming apps, and this malware co-opts the ad attribution immediately after a legitimate click.

Hidden Ads

Hidden ads are digital ads that criminals hide with CSS. Then, they set up their ad platform to pay them based on impressions instead of clicks and reap the benefits. If you notice an extraordinarily low click rate to impression count, you may be a victim of hidden ads.

Domain Spoofing

Domain spoofing is when criminals trick legitimate buyers into clicking on an ad that either looks like or is directly ripping off of a legitimate company but instead links them to a low-quality website where it tries to get users to input sensitive information.

There is also a sophisticated form of domain spoofing when users can be redirected to a different URL than the ad provided entirely, but this is only possible with a proxy server or other compromised assets like a user’s computer or publisher website.

Conversion/Action Fraud

This is when fraudsters build bots that can fill out forms or other typical conversion events and inflate your conversion stats — affecting any of your existing Cost per Conversion campaigns.

Digital Ad Fraud or Impression Fraud

This is when advertisers pay for specific impressions on chosen sites but fraudsters use iframes to redirect those ads to low-quality sites instead, blurring your results and preventing your dollars from being spent legitimately.

Mobile Ad Fraud

Mobile ad fraud is another broad term that covers any ad fraud that occurs on a mobile device. This includes false impressions, click fraud, click injections, or bot installs.

For example, illegitimate publishers who want to attract more false impressions may stuff a bunch of ads into a single pixel or build an advertisement location outside of a typical mobile view to inflate their numbers[*].

Another example of mobile fraud is click injections. Click injections occur when fraudsters piggyback off of organic users’ Android metadata to trigger a click immediately after an app install, resulting in a real user but a false attribution, which triggers an app install ad payout if set up correctly.

App Installation Fraud

App installation fraud is very popular these days, and click farms sometimes pay people low wages to download an app, do some basic interactions, and then uninstall the app.

Fake installs are also common, which is when fraudsters use emulation software to create a series of fake devices with fake users. These fake users use a script to engage with an ad and download an app, which triggers an ad attribution event.

User Falsification Fraud

Video ad fraud occurs when someone is either profiteering from falsifying impressions or user legitimacy.

For example, one type occurs via geography misrepresentation — where fraudsters seeking higher costs per impressions falsely claim their traffic is coming from U.S.[*].

In other words, fraudsters disguise their IPs as being higher quality users but actually only display ads to low quality or irrelevant users. E.g. if you were a local tire shop in Indianapolis but had ads actually showing to people who lived in Lithuania.

Botnet Ad Fraud

Botnet fraud is arguably the most sophisticated type of fraud. Hackers use networks of ISPs and computers to send fake clicks and impressions to ads. They usually make money by clicking their own ads to get money from the DSP (Demand-Side Platform – e.g. Google Ads).

One of the most prolific botnet schemes was known as Methbot, which when discovered had an infrastructure consisting of 571,904 dedicated IPs, 6,000 domains, and 250,267 distinct URLs, and all of those could house a video ad and used variants of famous publisher names to fool users[*].

As you can tell, there are a bunch of ways to commit ad fraud, so what can businesses do to ensure the safety of their advertising efforts?

The Smartest Ways to Reduce Ad Fraud in Your Business

While DSPs like Google Ads and Facebook are investing enormous resources into combating ad fraud and their detection grows in sophistication each year, there are still a variety of strategies you can implement to protect yourself from ad fraud.

1. Try Baiting the Bots

If you’re seeing super high conversion rates on a form but aren’t seeing many legitimate users, you can try to add a hidden form field to trick bots. Because actual humans won’t look inside the code, they won’t fill out that form question — only bots will.

2. Block IP Addresses

Export your server logs and search for repeat IPs in mass. If a particular IP address occurs thousands of times without meaningful interaction, go ahead and block that address.

3. Use Anti-Fraud Software

There are many software companies that have built applications that test and monitor your ads to reduce and point out potential instances of ad fraud. You can view a list of those here.

4. Refer to ROAS Instead of “Vanity” Metrics

Just because you may be a victim of ad fraud doesn’t mean you can’t make a profit with ads. Instead of measuring everything against impressions and clicks, always refer to your Return on Ad Spend and have proper tracking up. In other words, if you know you spent $5,000 on ads and got back $15,000, that’s all you really need to know.

5. Consider Implementing Ads.txt

Ads.txt is an IAB-pioneered industry solution designed to restrict inventory between publishers and distributors to only approved vendors. This eliminates faux publishers scamming people with click fraud.

Ads.txt works by creating a public record of authorized digital sellers for publisher inventory that programmatic buyers can index and reference if they want to purchase inventory from authorized sellers[*].

It works like this:

1. Publishers post their list of authorized sellers to their domain.
2. Programmatic buyers crawl the web for those fields and create a list of authorized sellers for each of those publishers.
3. Programmatic buyers filter and match those ads.txt available ads against the data provided in an ad bid request.

While ads.txt is promising, it’s only as good as its adoption, as discussed by David Smith:

I think it is the right thing to do because we want to know whether we should be buying from the people that we are buying from,” said David Smith, CEO, and founder of Mediasmith. “But the key will be the IAB getting publishers to sign on…

The most effective solution is a combination of all of these efforts — you just need to balance the effort it takes to be proactive against the damages ad fraud has on your marketing!

A World Beyond Ad Fraud

The best alternative and solution to fighting ad fraud and delivering improved ROI is to create an ad ecosystem where clicks are provably real human beings who have an interest in what they click on.

This means we must fundamentally reimagine the way our current digital system works. By using an immutable blockchain ledger and permission-based platform, we can ensure only real people interact with ads and that ads are only served to legitimate users who wish to view them.

When you compare that to the myriad of virus-infected PCs connecting to faux web pages and massive botnet operations, it’s clear what the next step we need to take is.

See how Permission.io is fundamentally restructuring how we think and interact with digital ads.

#AdFraud #ClickFarms #ClickFraud #PermissionMarketing

Tension exists in modern advertising. Cambridge Analytica, GDPR, and numerous breaches have prompted a privacy whiplash against brands who were careless with data, and for good reason, but users are also demanding more and more personalized experiences — requiring nuanced data.

Even when advertisers are working with the best they can get, modern data collection is littered with problems. Advertisers are often left with inferred and piecemeal data, resulting in a mismatch that frustrates consumers.

Fortunately, there are solutions being developed, and one such innovation is known as zero party data (or ZPD). Zero party data puts the power back in the hands of consumers and enables businesses to collect more accurate data by fostering genuine, opt-in interactions.

Before we go into why zero party data will define advertising in the 21st century, let’s cover what kind of data we currently use.

The Three Types of Data Commonly Used Today

First Party Data

First party data is proprietary data collected by companies directly from its customers.

This most commonly includes email addresses, birthdays, addresses, purchase history, etc. This is the data most of us are familiar with. From Facebook Pixel data to sales spreadsheets, first party data is relied upon for day-to-day activities across modern businesses. It’s collected and owned by the business rather than the consumer.

First party data is where issues are most prominent (Equifax’s staggering failure comes to mind), and it’s the reason we have regulatory bodies in place such as the PCI Security Council. User data is sensitive, and the transition into a technology-first economy has not been kind to the average consumer’s privacy.

Second Party Data

Second party data is first party data sold to other companies.

It’s collected the same way as first party data, and then it’s packaged up and sold. A common example is email lists. If you’ve ever received a random email from a company, then your email was sold as second party data. Shared internet browser cookie data and product preferences are also popular second party data, and these data sets can either be consumer-specific or anonymous.

Third Party Data

Third party data are large data collections gathered by companies who are not the original collectors of that data.

Think inferred data, psychographics, income based on zip codes, etc.

For example, in fashion, there are data reports that forecast color trends for upcoming seasons. These reports are compiled by a company that takes the time to buy or license data from a wide variety of sources, compile them, and then present them in a useful way.

More generally, third party data usually covers demographic information like estimated household income, purchase preferences, etc., and companies use this data to educate their marketing efforts and build statistical models.

What Is Zero Party Data, and Why Is It So Exciting?

Zero party data is consumer-owned data given voluntarily by the user to brands in return for a benefit.

This could be anything from:

1. Intention to buy
2. Preferences on types of ads
3. Demographic information such as gender, age, interests, etc.
4. How they identify themselves

Zero party data hands the reigns of control back to the consumer by giving them ownership of their data. Brands and third party platforms own first party data, and users own zero party data. Businesses cannot package and sell zero party data the way they sell first party data.

While self-reported customer data like email addresses, birthdays, etc. would be considered first party data in the past, the expectations consumers have around that data has forced a new distinction between data types.

Zero party data is proactive and functions as an ongoing conversation between consumers and advertisers. It’s the difference between implied interest and explicit interest, and the best ZPD is constantly evolving.

Users offer valuable information in return for better personalization or via value exchange marketing, which is when users answer an ad or survey in return for something related to their experience. For example, getting a free audiobook chapter in return for filling out a sponsored survey is an example of a value exchange.

In a way, ZPD is simply the next step in the stairs of permission marketing pioneered by thought leaders like Seth Godin. Opt-ins are the pinnacle of permission, and zero party data is exclusively opt-in. We know humans are habitually materialistic — we won’t stop buying good products if presented with the opportunity, so why shouldn’t we use technology to make the relationship between consumers and brands better?

Today’s Flawed Data Ecosystem Needs Solutions Like Zero Party Data

Zero party data wouldn’t be nearly as interesting if there weren’t problems worth fixing today. The issues with first party data and modern data exchanges are many, and here are a few of them:

Consumers have little control over their data and aren’t compensated whatsoever.

In today’s digital advertising world, consumers have limited control over their data and aren’t compensated for it monetarily. Most data is collected through user consent to join a platform, e.g. Facebook. Once a user decides to join Facebook, they are subject to ads, and that is the price they pay for using the platform. But users don’t have any choice or real control over their data — they aren’t rewarded in any way apart from being interrupted.

Businesses are often working with outdated data and are fighting against a tide of anti-advertising behavior.

Second party and third party data can be horrendously out of date and inaccurate, and even the best guesses in targeting are based on databases of old data. If a user expressed purchase intent for a car and then purchased a car, then any auto dealer using that data to push car ads to them is wasting their money. They aren’t likely to purchase two vehicles in a short time frame.

Ad blockers and private browsers are also becoming more and more mainstream, and the more sophisticated and ubiquitous consumer privacy tech becomes, the worse it is for advertisers. The best solution is to foster a voluntary exchange of data, and the best way to do that is to give ownership back to the users.

Businesses have repeatedly proven themselves incapable of protecting consumer data.

With breach after major breach, consumers are only becoming more protective of their data. This is accelerating the trend of consumer control, and consumers should have more choice in whom they trust with their data.

What Else You Need to Know About Zero Party Data

Zero party data is better for businesses too.

Zero party data isn’t all about consumers. ZPD allows businesses to:

1. Collect more accurate, relevant, and immediate data from consumers.
2. Better match products to consumer interests.
3. Build more brand loyalty and ad engagement by seeking permission instead of interrupting.

A consumer offering voluntary information is the most accurate form of data collection and engagement, and that’s already proven through existing first party data trends.

Zero party data isn’t perfect, yet.

It’s worth noting that the zero party data ecosystem is young, and that brings challenges for brands. For one, it’s difficult to scale, although that’s being solved by technologies like blockchain and cryptocurrencies that enable permission-based engagement.

There are also some best practices businesses need to keep in mind when collecting ZPD. For example, if someone collects zero party data clumsily, a user may feel incentivized to say what they think the brand wants to hear instead of what the consumer actually thinks. This isn’t a problem unique to zero party data, but it can distort data integrity.

Zero party data functions on trust, which will act as a natural filter for bad faith actors.

An interesting positive consequence of widespread ZPD adoption is a sort of natural selection throughout digital businesses. Predatory businesses currently rely on second and third party data sources to target and take advantage of consumers. ZPD, on the contrary, is only rewarding to advertisers if they are trustworthy (or at the very least compelling) enough to benefit from your data. This will empower consumers to reward the businesses most deserving of their data and make bad-faith actors less effective.

Getting Started and Best Practices for Collecting ZPD

Zero party data will continue to grow in this decade and beyond, eventually becoming the standard solution for transferring data between brands and consumers. If you work for a business, you can start reaping the benefits of ZPD right now.

Here are a few ways your business can start using zero party data:

1. Integrate more value-exchange ads into your marketing strategy.

Look for publishing partnerships and ways to incorporate value-exchange ads into your marketing strategy. Try partnering with a SaaS company to offer an additional day in their free trial to users who complete your survey or engage with your video. Or perhaps you take part in the robust world of value-based ads in mobile gaming, where users are rewarded with in-game currency or items for interacting with brands.

You could also look at giving away additional content or bonuses on your site for more information (this is already very popular in the inbound marketing world), with the explicit caveat that their data will never be sold. Your options are wide.

2. Set up a cycle of giving and receiving to succeed with ZPD.

Users shouldn’t be placed into static buckets. As consumers buy and grow with a brand through ZPD, there is two-way communication which results in better buying experiences for customers and more revenue for brands. Find ways to incorporate a natural refreshing of user data, whether that’s through accruable incentives or multiple opportunities over time to update their data.

3. Use blockchain to grow zero party data at scale.

One roadblock for businesses is the ability to achieve scalability when it comes to zero party data. Setting up a value-exchange marketing campaign or survey seems feasible, but when it comes to big data decisions, zero party data often falls short. That’s true, but that can be overcome with technology like cryptocurrencies that enable consumers to monetize their data and engagement.

Imagine a mobile app that’s powered by a cryptocurrency that rewards consumers in return for interacting with sponsored content. Users can then exchange or use that currency to spend it on whatever they’d like — perhaps gift cards or physical items. This lets brands collect zero party data to better serve a target demographic while giving consumers a cash equivalent for engaging with brands they are genuinely interested in. It’s a win-win.

Permission.io is building the ideal zero party data ecosystem for users, developers, and brands.

See what we’re building.

4. Use ZPD in tandem with first party data for the best marketing results.

Until a full-fledged permission-based internet and app ecosystem is available, combining first party data and zero party data is the best approach for smart advertising. Serve ads based on the most amount of ZPD data as possible and always respect the user.

The Bottom Line on Zero Party Data

Zero party data is voluntary data given by a consumer to a brand, and it’s owned by the user. While the world of ZPD is still young, it has the potential to revolutionize our modern web advertising model and create a more personalized, equitable, and profitable experience for both consumers and businesses alike.

Join us as we revolutionize the internet as we know it.

Whether you’re a brand, a developer, or a user, we’re building a new ZPD-based data ecosystem that will compensate users for their data and fundamentally alter how the internet economy functions.

Get involved.

Digital advertising is tiring. In a world ruled by interruptive marketing, we live our lives in a constant state of ad fatigue, and many of us are now de facto pros at avoiding ads. We have the “skip ad” location memorized on Youtube, we employ ad blockers, we say no to cookie gathering, and we avoid sites that abuse them — opting for less intrusive experiences.

First party data and consumer behavior targeting are far from perfect, but even when a DSP does serve up the ideal ad to a consumer (and by ideal we mean exactly relevant to someone’s interests and buying potential), it’s still an interruption, and the consumer isn’t rewarded for their engagement or for the data they provided that gave the business the ability to target them in the first place.

Targeting is getting more difficult for advertisers, too. GDPR made collecting data without consent more difficult for brands, and this means more shotgun marketing and less specificity, resulting in worse experiences for both brands and consumers.

But advertising can’t go away — businesses need it. Good companies with great products need a way to share their value with the world, and consumers want a way to hear about products and services that may improve their lives.

So what’s the solution? How can advertising improve?

One answer is through opt-in, value-exchange marketing.

What Is Opt-In, Value-Exchange Marketing?

At its essence, opt-in value exchange marketing is about brands giving people something useful in return for their time and data.

Instead of interrupting peoples’ experiences, brands build their ads into the experience someone is already having. This lets users engage with a brand in return for something relevant.

For example, let’s say someone was obsessed with classical music, and a streaming service offers 30 minutes of unlimited listening for every 1-minute ad break. Now, let’s say this person really wanted to listen to a Steve Reich piece that was fifty minutes in length, and he is prompted with a suggestion from the streaming service to opt-in to an interactive, five-minute-long experience with a relevant brand of their choice in return for 3 hours of free listening.

Perhaps this listener is using cheap Apple headphones but has always been curious about improving their listening experience, and they choose to engage with Bose. Bose can take this time to explain why noise-canceling headphones offer the best experience for listening to classical music, bar none.

This is opt-in, value-exchange marketing in action. The user opts-in to interact with relevant brands in return for getting something they already care about. This promotes goodwill between the brand and consumer and dramatically improves engagement and ad retention rates.

In these opt-in, value-exchange models, the publisher, not the brand, owns the transaction of the rewards. In other words, it’s up to the streaming service to give the listener free minutes. Not the brand.

Is Exchange Marketing the Same as Opt-In Marketing?

If you include value-exchange as part of your opt-in marketing definition, then yes.

Opt-in marketing without a value exchange is already very popular in modern marketing circles. Including a relevant value-exchange is what makes exchange marketing different.

Value-exchange ads are also known as:

1. Opt-in ads
2. Rewarded ads
3. Exchange ads

The bottom line: If an ad is built into a user’s experience, offers something in return, and is entirely opt-in, then it’s an opt-in value-exchange ad.

Value-Exchange Advertising Is Often Misunderstood

Value-exchange advertising is often misunderstood as solely opt-in marketing. Here’s how to think about it. It’s:

1. An ad system powered by consumer choice.
2. A way to give consumers something relevant to the experience they’re already having.
3. Entirely opt-in.
4. Interactive.
5. Made possible by letting the publishers handle the engagement reward.

Gamification is king in value-exchange marketing, but as more and more systems develop, that will change. Below is an example of a value-exchange ad. Notice how the reward is directly related to their experience. That’s the key.

via mopub

Exchange ads are also described as a premium ad type by some sources, but it should not be viewed as inaccessible.

What Opt-In, Value-Exchange Advertising Isn’t

Just permission marketing.

You can think of value-exchange marketing as a component under the umbrella of permission marketing. By design, users have to give permission to brands to engage with them. It’s a transparent transaction between a consumer and a brand — just like permission marketing, but opt-in value-exchange ads give something relevant back to the consumer.

Interruptive ads with sign-ups.

Just because something includes a sign-up or gift on an ad does not mean it’s a value-exchange ad. Opt-in, value-exchange ads are not interruptive.

Directly giving people cash for watching an ad.

This isn’t just handing people cash, but there are some fascinating cryptocurrencies currently in development that aim to compensate users in return for their engagement with brands. This would be the technical equivalent of permission marketing and hand complete control of data back to consumers while naturally filtering out bad faith businesses.

Inbound marketing.

While opt-in, value-exchange advertising certainly shares a lot of similarities with inbound, it’s an evolved version. In inbound, brands create content to ask for information; in opt-in value-exchange, consumers ask brands to engage in return for a reward.

Why Opt-In, Value-Exchange Ads Are the Future of Advertising

Simply put, it’s a better experience for both brands and consumers. When an advancement in technology or strategy offers benefits to both players in a market, the innovation will inevitably take hold.

Here are a few reasons why opt-in, value-exchange advertising is the future:

1. Providing relevant value increases attention and engagement.
2. Since the ad is opt-in, brands own that experience and aren’t competing with other distractions.
3. Since a user is rewarded via a particular brand, an increase of goodwill occurs.
4. Consumers are getting better and better at avoiding ads, with 60% of millennials using ad blockers.
5. As the golden age of platform-dependent advertising diminishes, brands want more control over their ad experience.
6. Brands want to keep users on their own platforms instead of relying on third-party platforms like Facebook and Google.
7. Blockchain is enabling the transparency and engagement metrics necessary to create more effective and rewarding value systems.
8. Existing ad platforms are increasingly oversaturated, which raises the costs for advertisers.

All of these reasons add up to create clear momentum for value-exchange marketing.

Examples and Ways to Start Using Value-Exchange Marketing Today

Exchange marketing has already taken off — most notably in mobile gaming, but you can find it across many industries including dating apps, games, music streaming platforms, and news sites.

Opt-in, value-exchange marketing is not industry-specific, and there are limitless ways to approach value-exchange advertising.

Here a few ideas to get you started.

A business could offer:

1. More matches in a dating app
2. More coins in a mobile game
3. Additional articles for a news organization
4. Access to members-only content across any website.
5. Discounts on shopping sites
6. Extended ad-free experiences on any site
7. Access to exclusive products
8. Social spotlight to users that engage

Other clever examples of value exchange marketing:

1. A map installation where users can locate the nearest store to them and receive a discount to their email address.
2. Giveaways in exchange for email addresses.
3. Giveaways that reward repeat exposure with the brand. E.g. points for digging into available lessons or courses on an online education site.
4. Teasing new episodes of a show in return for watching ads.
5. Opting to watch multiple ads at first to have a commercial-free experience.

Any type of business can find a way to use value-exchange ads to create better ad experiences — they just have to take initiative.

3 Ways Businesses Can Immediately Start Using Value-Exchange Marketing

1. They can buy directly from the publisher.

Reach out to ideal publishers — especially those with existing examples of opt-in, value-exchange marketing, and start a conversation around opportunities to work together.

2. Programmatically, as through OPENRtb.

While you won’t have as much control over the unique experience, using exchange marketing in an automated bidding context is absolutely possible.

3. Through a blockchain ecosystem like Permission.io.

Building an app or service that uses engagement-based cryptocurrency is the most complete way to engage in value-exchange marketing. Every action a user takes with a brand rewards them, and brands have more control and opportunity to engage with consumers on a personal level than ever before.

Permission.io is building the first-ever value-exchange ecosystem — revolutionizing the internet as we know it.

Best Practices for Running Opt-In Value-Ads

Many of the best practices for value exchange ads share similarities with inbound and permission marketing. Here’s what you need to know if you’re running value-exchange ads:

1. Know where and how your ads are running so you can better match your offer.

As with all marketing, specificity reigns supreme. The more specific you can match your offer to the service you’re advertising on, the better. Whether that’s advertising gaming chairs to gamers or home kitchen equipment to online cooking magazine subscribers, the better you can fit into their experience, the better your results will be.

2. Go small and specific with desired demographics.

On a similar note, go hyper-specific with these campaigns — especially to start with. If you notice a campaign doing particularly well, you can test it on a bigger audience.

3. Keep it simple.

With interactive and value-exchange ads it can be tempting to offer too much or make them too interactive. Keep it snappy, and keep it simple. Get to your offer quickly and provide a clear next step.

4. Check your video specs across platforms and internet connection.

You may be able to stream 4k in your office, but that doesn’t mean all publishers and consumers will. Test what your experience will be like across mediums before launching a campaign.

5. Know your KPIs beforehand.

This is critical for anything you do in marketing, but they are especially important to keep in mind when testing a new type of ad. Keep track of your CPAs, your CPCs, and your tracked revenue for your value-exchange ads.

6. Set up specific tracking when you can.

Point users toward a specific landing page and cookie them accordingly — this way you know exactly how much revenue your exchange marketing ads bring in.

7. Test value-exchange ads for different parts of your funnel.

Experiment with both top-of-the-funnel and bottom-of-the-funnel value-exchange ads. For colder audiences, you could establish goodwill with an easy interactive and overview of your company, perhaps bidding for views over engagement. Then, you could build an interactive that ties to your service more directly.

For example, let’s say you were Stitch Fix, the popular clothing delivery service. Your ad could be a version of filling out their ideal style onboarding form, and the end of the ad could be a call to action to transfer that information into a customer profile.

8. Know what you’re being charged (cost per engagement vs. cost per view).

Cost per engagement is usually the right choice for new campaigns, but it depends on the structure of the funnel. For movies or other wide brands, they may be able to get more brand reach for cheaper with cost per view.

9. Don’t go overboard on your DSP / brand-safety exclusions.

If you use a DSP to experiment with value-exchange advertising, make sure you don’t lean too heavily into your safety exclusions. This can prevent you from reaching profitable audiences.

What’s Next for Opt-In Marketing

AR experiences and more interactive creatives.

Some advertisers will feel constricted from a technological standpoint with value-exchange ads. The best ads are custom at the moment, but we expect to see AR make an appearance and a slew of companies developing platforms that allow for simple ad creation and distribution.

More publishers will get on board and work to partner with brands on opt-in initiatives.

As value exchange marketing becomes popular, the partnership infrastructure will flourish. Instead of sounding like a novel idea, publishers will begin suggesting value-exchange marketing to brands.

Blockchain and value-based currencies will provide an avenue to build value-exchange marketplaces into native apps and software.

The way our internet today handles advertising is outdated and intrusive. Consumers are subject to unfair data practices and have no control over what they do with their information. As blockchain enables the transparency needed to create a cryptocurrency that rewards consumers for brand engagement, we will see entire ecosystems and marketplaces created around value-exchanged advertising.

Indeed, the Ad industries foremost research and standards organization, IAB (Interactive Advertising Bureau) refers to this new model, which sits at the heart of the benefits that blockchain can provide, as “a win for consumers and brands alike” (2).

Join Us as We Build the First-Ever Value-Exchange Marketing Ecosystem

Whether you’re a brand, a developer, or a user, we’re building a new data ecosystem that will compensate users for their data and fundamentally alter how the internet economy functions.

Get involved.

#AdTech #Advertising #OptInValueExchange #ValueExchangeAdvertising #PermissionMarketing

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Your data and your attention are hot commodities.

Mutually beneficial relationships need a functioning feedback loop to work.

Couples talk through their differences; antagonistic coworkers keep things cordial; even opposing parties in bitter lawsuits keep a dialogue open.

Between digital advertisers and their audience, however, the relationship is closer to predator and prey. The result: a captive audience that tries it’s best to ignore advertising, and advertising that dives ever deeper into user data to get a reaction.

We believe a platform dedicated to personal data spending power is the answer. Here’s how.

Modern advertising is a one-way street

Functional relationships require two parties who each get something valuable from their coupling.

So far, advertising is a one-sided relationship. Advertisers pay social platforms, digital media, and search engines to place ads based on the data they freely mine from consumers. Consumers, though, don’t get anything in exchange, outside of the occasional ad that truly excites, educates, or inspires.

On the other hand, getting users to click on ads still isn’t easy. Advertising audiences are captive audiences, who have developed an uncanny ability to ignore ads, and a growing propensity to block them out altogether.

One element can change this dynamic: personal data spending power.

Advertisers should compete for the opportunity to target user data

The most logical way to mend the relationship between advertiser and consumer is to make it a two-way street.

By commodifying user data, consumers get compensated each time they view an ad message. And on a secure platform to enable such transactions, advertisers get a dedicated space to entice would-be customers.

Think of an app where consumers swipe through proposed advertising messages, and where their feedback and behavior is looped back to advertisers for better targeting, without revealing any personally identifiable information.

This spending power transforms the relationship: each internet user becomes an individual ad platform, and their anonymized data becomes a highly sought-after commodity.

It’s nothing short of a fundamental change in the architecture and social dynamics of advertising.

Permission-based advertising unlocks a mutually lucrative business relationship

Modern digital advertising is intrusive — like morning announcements in high school. Even if the content itself is useful or engaging, the relationship begins with resentment by virtue of it being mandatory.

Because of this, it’s difficult to capture attention online. Advanced targeting has helped greatly, but few variables in advertising are as powerful as gaining undivided attention. It’s why we see ads on smaller screens and minimalist social platforms like Instagram outperform traditional display advertising.

And beyond lizard-brain-like attention afforded to advertising on the internet, the context in which the ad is viewed compromises consumers’ willingness to engage.

After all, people typically see ads when they’re trying to do something else. When advertisers compete against users’ original intention to surf the web, they lose nine times out of ten.

Personal data spending power greatly amplifies ad performance by virtue of being consumed by willing participants. Moreover, it incentivizes consumers to stay engaged in protecting their privacy and earning money. It allows for even more precise targeting that rewards users with better ads and advertisers with better performance.

This doesn’t merely flip the old paradigm on its head, it turns a complex web of perverse incentives into a relationship that unites advertisers and the advertised, for potentially the first time ever.

#AdBlockers #PersonalData