How blockchain can disrupt the advertising industry

Mark Dijksman is the founder of oneUp, a company that aims to institutionalise and speed up digital innovation in mature companies by setting up free zones where start-up thinking and advanced technologies are brought together.

Mark Dijksman discusses two major shifts that go hand in hand and will impact many industries, including the E&M industry. On the one hand, he sees a democratisation of value and platform ownership enabled by blockchain technology, including an emergence of a new value chain in digital advertising. On the other hand he observes a change in data ownership and privacy.

Democratisation of value and ownership

Technological developments are going fast and companies that do nothing to improve or adapt their products or services are in danger of being disrupted by new players in the market. Dijksman: “Even Uber who disrupted the traditional taxi market is now itself under threat of being disrupted by Arcade City.”

Arcade City is a blockchain-based taxi ride-sharing platform. Unlike Uber, Arcade City offers a free platform to connect drivers and customers and decentralises the whole payment system. All users of the Arcade City platform are also owners of the platform and the value created by taxi drivers will not flow to a central organisation. Dijksman: “This is all part of a democratisation process of value and ownership.” This process is taking place ignoring industry boundaries and will also impact the E&M industry. Just replace Uber by Spotify, taxi-rides by music and taxi drivers by musicians.

Blockchain technology to bypass Google and Facebook

The Basic Attention Token (BAT) model is another example of this democratisation process. BAT is a digital token that can be exchanged between publishers, advertisers, and users in a blockchain-based digital advertising platform bypassing parties such as Google and Facebook.

Dijksman: “On this open and decentralised platform called Brave, advertisers give tokens to publishers based on the ads that users have actively been looking at. Users also receive tokens for looking at content, which they can then donate to publishers they want to support. Publishers can use tokens to reward users for promoting their content and can charge tokens for premium content.”

“There will be a whole new value chain in digital advertising. Right now the money advertisers pay mainly goes to parties who own the platforms, such as Google and Facebook. This will change in the years to come. Money in the advertising value chain will be redistributed.”

"The rules of the game will change as data ownership will gradually shift to the consumers”

Data ownership shifts to customers

Dijksman argues that in the future only services will be owned and not the digital platforms these services use. “The coming years will be a continuous search for added value which will be dominated by a battle about who knows best what consumers want. This battle is more important than the question of who will be the owner of a platform.” In this context Dijksman also sees a change in data ownership: “The providers of services can ask consumers for their data in order to get to know them and improve the services that are offered. However, the rules of the game will change as data ownership will gradually shift to the consumers. This is also part of the democratisation process of value and ownership.”

Privacy

Personal data will be more and more broken down in different layers. Dijksman: “There will be a generic layer of personal data available and also layers of more specific data on request of the data owner. Users will be able to indicate which specific data they wish to share or not, and if they wish to retract their consent, they can. For instance, MIT Medical already offers such possibilities. Anonymised medical records have been stored on blockchain which researchers can use. More specific data is owned by the user – the patient decides which private components of the medical file will be shared and with whom.”

Start-up thinking in a corporate world

Remember the green 1-Up mushrooms in the computer game Mario Bros. that gave players an extra life? An extra life is exactly what the Amsterdam based oneUp.company gives to traditional big brand companies. Two years ago, oneUp.company and PwC entered into a partnership with the objective to jointly help companies succeed in an ever-changing environment.

In the current market new competitors may emerge from a garage or attic and can have the ability to disrupt a business or even a whole market segment. “Combining start-up thinking with the vast possibilities of technological breakthroughs has proven to be a very successful starting point”, says Dijksman. “Yet, what is needed today is data, expertise and money, and these are hard to come by for a business in a garage or attic.”

New meets old

“Mature companies have all three – data, expertise and money, which, when combined with a start-up mentality, can create a competitive advantage”, Dijksman explains. “Our aim is to institutionalise digital innovation in mature companies. The core organisation stays intact as it generates a continual flow of turnover and the start-up, also called ‘new co’, exists next to it in order to speed up innovation.”

“Some business issues can be solved by incremental innovation, for instance by implementing a new CRM or HR system. Yet, there are a lot of business challenges which cannot be solved this way. For these challenges you need a free zone with new capabilities and a culture of free thinking and an open attitude towards new ideas and solutions. These start-ups focus on solving business issues corporates are facing, using emerging technologies such as block chain, smart contracts and data science.”

Link between core company and start-up

Although a start-up may have a different P&L, HR architecture and legal framework, it is not disconnected from the core company. “It would, for instance, not be a good thing if there was not an exchange of data and people between the two entities”, says Dijksman. “The moment a solution materialises it is time to bring it to the transformation phase and transfer specific components from the core company to the start-up.”

Methodology

But before a solution materialises a number of phases will have to be completed first. oneUp developed its own methodology, which is a combination of Customer Value Proposition Design, Design Thinking and Design Sprint. Dijksman: “We do not respond to a request to build, for instance, a digital solution. We first look at the problem and then try to find a suitable solution. The concepts we develop always have a number of successive phases. We start with phrasing a problem statement, followed by a design sprint which includes prototyping, user testing and validation.”

“Before we write any string of code to build new software we always try to validate all ideas (i.e. assumptions, ed.) using hypotheses”, Dijksman explains. “The underlying data is the decisive factor here at all levels. After validation the build-measure-learn feedback loop starts, which is the core component of the Lean Start-up methodology and includes the development of a minimal viable product (MVP). The next step is the pilot phase and making sure the product really fits in with the needs of the target group (i.e. the problem/solution fit, ed.). The final stages are the product/market fit, or customer validation, followed by the upscaling and growth phase. However, launching a product or service does not mark the completion of the project, as the process of build-measure-learn is a continuous process.”  

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Ennèl van Eeden

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