The world of advertising is moving towards blockchain almost as fast as the world of banking. In fact, some industry experts believe that this new technology will completely reset if not reinvent the vertical within the next several years.
Why? Online advertising is dominated by large ad networks and companies like Google and Facebook. They are expensive, prone to fraud and notoriously opaque. Blockchain changes all of this by creating transparency, accountability and removing the middleman. In the advertising world, the additional attraction is that it allows publishers to create more effective and personalized advertising if not a better user journey and experience.
AdSigma is an early mover in this space. The platform allows advertisers and publishers to connect directly (no more middleman), lower costs, create customized ads for specific demographics and provide transparency and accountability all the way through the process.
Here is how it will work: Tokens are used in the system to buy and sell digital ads and pay fees to both Ethereum and platform users. They will also be used to pay for future services as developed and offered by AdSigma.
We recently sat down with AdSigma’s CEO, Suumit Shah, to have a chat with him about the project as well as finding out his thoughts and insights.
Suumit. Thanks for joining us today. Can you tell us more about yourself and AdSigma?
Hey! Thank you for having me here. My name is Suumit and I am the founder of AdSigma. Being graduated in the field of Computer Engineering, technology is something I’m very excited about. My previous company was Risemetric, where we used to help corporates and heavily funded startups to grow their user-base/revenue through digital marketing activities. Within a year of foundation, we crossed a revenue of 6M dollars with the team size <10. Being in the industry of Digital Marketing for more than 7 years, I have an in-depth knowledge of this field. We’ve started working on a concept of AdSigma because we wanted to solve some of the important problems in this industry which are
- Unjustifiable Rate of Commission by Ad Networks.
- Lack of Freedom of Negotiation for Advertisers and Publishers
- Irrelevant Advertisements.
Why do you think that AdSigma will stand out from the competition (among block chained ad networks)?
Well, we think the industry is too big (200B last year, growing at 12-15% yearly) and no single network has been able to capture the 100% market share. For instance, Google and Facebook collectively get 50-55% market-share.
Talking about the competitors, there are few competitors trying to solve the same problem and we believe there are multiple ways to reach from point A to point B when you are trying to solve the problems with technology, as the technology itself is an evolution.
Some of our competitors are trying to solve the digital display ads problem by building own web browser and we believe that browser adoption is really big hurdle for them. Talking about other competitors, do think their unit economics are not so good if they really want to achieve the big targets.
We, at AdSigma tried various tech-methods to solve this problem and we have built a tech architecture which is capable of handling huge numbers with flawless ad rendering experience. (Nobody loves slow loading ads or websites in general)
How did you come up with the idea and what was the thought process behind it?
We came with this idea because we were experiencing the problems and at the same time we came across BLOCKCHAIN where things got serious because the solution to our problems was right in front of us – BLOCKCHAIN.
What is the biggest problem with the industry or do you think there is a gap in the market for AdSigma to fill?
Well, I’ve played both of the roles – Advertiser and Publisher. As an Advertiser, I’ve spent almost 15-20 million dollars on ads (I used to handle the digital marketing for one of the hottest real-estate called Housing.com from India) and as a publisher, I get few thousand dollars per month from blogs/websites.
I guess both of the entities have some problems:
As Advertiser: I don’t get any exact numbers in the report. For example, if I set up an ad to get app downloads to my app and if I target users in California, after a couple of hours when I see my Google AdWords dashboard, I get to report that my campaign has got 2 million impressions and 50839 clicks, now there is no way for me to verify whether this data is actual or no. So there is no transparency.
I guess publisher problem is simple ”They don’t get paid enough”. If you consider the example of publishers from the countries like India, they get CPM like 1$ (which is too less) and then people try to find blackhat ways to make money (Hence you get to read a lot of fake news and spun content on the internet). Now you know how serious the problem of fake news is! (Remember last US presidential election)
What do you think is the biggest problem AdSigma will solve and why is the problem important to solve?
Problem 1: Unjustifiable Rate of Commission
Advertising networks like Google and Facebook charge an exorbitant commission to the publishers. With over 30% commission rate, Google and Facebook combined had ad revenue of over $100 billion in 2017. With the whole ad network industry earning over $200 billion per annum, there is a need to revolutionize the business model.
Solution: We are building an Ethereum based platform wherein we will eliminate the need for the advertising networks. We will provide a system where the advertisers and the publishers can directly communicate. Relaying fees will be discovered automatically by the market forces and publisher will get to keep higher margins on the fee charged to the advertiser. The advertisers shall be themselves benefited with a lower fee as the publishers get to keep higher margins. AdSigma will be issuing tokens named ADSi. All the token-holders will be part of our community and shall be able to experience our superior quality of service.
Problem 2: Lack of Freedom of Negotiation
Due to the presence of advertising networks as a middleman, the advertisers and the publishers do not experience the freedom of negotiation. There is no real direct communication between the two parties. Also, majorly, advertising networks frame and control the pricing policies, to which the advertisers, as well as the publishers, are compelled to agree. There is no transparency with regards to the bidding procedure. The real-time bidding platforms offer no information about the bids, but just the bid amount.
Solution: On our platform, the publishers will have the liberty of choosing their own pricing policy and shall not be restricted/interfered by any middleman. Also, the advertisers would be able to negotiate on prices and terms of service.
Problem 3: Irrelevant Advertisements
Many at times, advertisements are displayed at places where they are not much effective or are irrelevant. Moreover, some advertisements don’t meet the standards of the publishers’ webpage/website. It is essential for both, the advertisers and the publishers that a relevant ad is displayed at a right place.
Solution: The AdSigma protocol incentivizes better matchmaking process by analyzing the content of publishers and advertisers. This enables advertisers to reach out to an audience which matters to him.
What do you estimate the financial impact will be on publishers, content creators and advertisers of moving to a blockchained advert system like AdSigma?
Suppose you were an advertiser and you were paying 100$ for one app install. Assuming current ad network commissions, they used to keep 38-45$ and eventually publisher used to get paid 55$ for one app install.
In case of AdSigma, there is no middleman. You pay 75$ for an app install and publisher will get whole 75% (ETH transaction fees are negligible and so does the fees of relayers). So as an advertiser, you saved 25% and publisher got almost 50% more as compared to what he can get from the ad network.
In the whitepaper, you talk a lot about how Google and Facebook dominate the online advertising space today. How much of a content revolution will publishers occur once are not forced to compete with the social networks? Is this the end of “fake” news? Or at least “fake” ads?
Well, think from publisher’s perspective, if they get paid what they deserve, they will never try blackhat practices to scale the revenue. And even if Facebook and Google are so big companies, it’s not a threat to us. Publishers use Google because they are the highest paying ad network, if tomorrow there comes another network who is paying more, they will start using it. At the end, it’s all about money for publishers 🙂
Regulation-wise, what are the toughest challenges you will have to overcome? Per region which is the hardest market for you to crack or stay in compliance with? The US? Asia? Europe?
The US market for digital display advertising is so huge followed by other developed countries. Talking in terms of regulations, we are not sure about the allowance of the blockchain yet.
Where do you expect this model and your customer base to grow the fastest and why? Is it the U.S? Or do you see another region that you expect to switch to this kind of service en masse first?
We are expected to grow in Japan, as the Japanese government is so in favor of cryptocurrencies and we believe that we will be able to onboard the top 10 publishers and advertisers from Japan.
What are the services you plan to offer that excite you the most?
Well, currently we are writing an algorithm to understand the website/user in a better way. As we said before, ad relevancy is a major factor here and understanding user behavior without accessing his personal information is next to impossible and we are trying to solve this issue with advanced technologies like Artificial Intelligence. Working on this algorithm alongside with developers is the most interesting thing for now.
What has been your happiest moment so far working on AdSigma?
On the flipside, what has been the most painful, or perhaps the most regretful decision you’ve made with AdSigma?
Well, the happiest moment of AdSigma is the concept itself. The moment when we decided to build AdSigma was the best moment so far. Talking about the flipside, fortunately, there are no regretting decisions so far.
What is the indicator you are looking for to tell you that you have begun to achieve your mission?
I guess it would be getting top 10 advertisers and publishers from Japan to use AdSigma.
Tell us more about the ADSi coin.
What are the selling points and what does it do in the system? There is quite a lot, so maybe you could summarize this in three to four points.
Advertisers will be able to buy display advertisement on websites/apps using ADSi tokens and Publishers will be able to monetize their content. (They get paid in ADSi).
As this is a simple demand-supply industry, the price of the coin will be proportional to the utilization of the coin for buying/selling digital ads.
Do you have any existing strategic partnerships you would like to talk about?
We are still in the early stage of initiating a partnership with companies, this wouldn’t be the right time to discuss that. Once we are in the position to disclose this, You will be the first to know 🙂
Moving on to more personal stuff, what does a typical day in your life look like?
Well, since December, I’ve been working almost 14 hours a day. I usually wake up early morning and first attend all business meetings followed by multiple responsibilities such as fundraising, roadmaps and strategy planning, I then work with other teams and we discuss current milestones, hurdles and product related things in general.
I spend at least an hour daily, reading about various crypto news and finding new cool products on product hunt. This gives me insights about where the whole blockchain industry is heading to and how people are responding to the same.
Can you express one personal opinion of yours about the blockchain? It doesn’t matter if it’s negative or positive, we just want to hear your thoughts on it.
I believe we are still in the very early stage of Blockchain technology, if used right, it has the potential to change the way we do things on the internet. As of now, there are more misunderstandings than facts about it. There are a lot of nations and businesses in general which has mistrust issues and with the help of blockchain, we can solve them all.
What’s something that you believed to be true for a long time until you found out that you were wrong, or if you don’t like that dichotomy of right versus wrong, what’s something significant that you really changed your mind about over time?
I always believed that the Batman’s Batmobile is fake until I visited the Warner Bros Studios in Los Angeles and saw the real-running Batmobile with my eyes 😉
Finally, what other personal goals (besides your career) do you have in life? Is there anything else in life you want to achieve?
I guess the first and most important goal of my life is already achieved, which was – Finding what you love doing. Entrepreneurship is something I’d be doing till my last breathe. Other long-term goals are – starting taking care of myself, share my knowledge about building businesses with needy people, traveling a lot more! To say everything in one line -”Being happy” for forever.
That concludes our Interview with Suumit Shah
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