Photo by Stephen Dawson on Unsplash
It’s a strange thing, the internet advertising economy. If you want your campaign to work, you need to spend a lot of money. But if you pay top dollar, there is no guarantee that it will convert to keep your business lights on.
Make no mistake, advertising technology or ad-tech has come a long way. In the early 20th century, marketing pioneer John Wanamaker said, “Half the money I spend on advertising is wasted; the trouble is I don't know which half.” Fast forward 100 years later and you see ad-tech answering Wanamaker’s lamentation with sophisticated artificial intelligence software running a trillion data points about consumer behavior.
It’s safe to say that ad-tech today is more effective than the Mad Men-style marketing of the pre-digital era. But is it as effective as it is made out to be?
Efficacy of Ad-Tech
Many, including former Google employee Tim Hwang, believe that ad-tech is a bubble. Hwang’s new book, Subprime Attention Crisis, argues that the new ad business is built on fiction. He believes that online ads are heading in the same direction as the 2008 U.S. housing bubble as no one grasps their worthlessness.
That’s a big claim. But, there are piles of research data to support it.
A recent 2-year study by ISBA with PwC found that half of the online ad spending goes to industry middlemen, and almost 1/3 of those ad-placing costs were completely untraceable.
In one experiment, the analysts used 6 different advertising platforms to reach Australian men between the ages of 25 and 44. The result? A performance that was slightly worse than random guessing.
The increasing attention that digital ads receive has given rise to click farms (army of cheap workers paid to click on paid ads manually) and domain spoofing (ad inventory falsely made to look like space on a premium website). An estimate suggests that $35 billion is lost annually to such scams.
In fairness, ad-tech does work in gaining new customers. But, to whom exactly? And at what cost?
Fighting a Losing Battle
A lot of the ad-tech parameters such as cost per click (CPC), cost per thousand (CPM) and cost per result (CPR) involve live auctioning. Large organizations pay an enormous bid for their target phrase or keyword, while many micro, small and medium enterprises (MSMEs) struggle to compete with their budget.
Similarly, a vast majority of businesses have no choice but to join online portals and price comparison sites because they do not have the same level of ad-tech and search engine optimization (SEO) resources to compete on their own.
Are the real winners of the internet economy the tech giants? According to eMarketer, Google (NASDAQ:GOOGL) holds a 28.9% share of the U.S. digital-ads market, with Facebook (NASDAQ:FB) holding 25.2% and Amazon (NASDAQ:AMZN) 10.3%. These companies are heavily linked to the global economy as they account for nearly 10% of the U.S. stock market’s total value.
As far as the tech giants are concerned, the companies that can shell out the most amount of money are prioritized, regardless of the quality of services.
This begs the question: Is the internet economy reserved only for established businesses with deep pockets? This is the premise of a USPTO-approved patent titled the “internet search mechanism” owned by an ethical technology company — Bubblr (OTC:BBLR).
Leveling the Playing Field
Bubblr’s patent is a new low-cost marketing channel solely based on relevancy.
The patent aims to conduct a fair fight in the internet ring. It identifies 2 main victims: MSMEs facing complexities as they do not have the budget or resources to compete with large enterprises and customers paying a premium on portals and price comparison sites.
Bubblr's ad-free marketplace provides a better marketing channel for customers as no personal data is given up. Bubblr will have a low-cost subscription model for product and services providers rather than a transactional cost model. The company hopes that this subscription model will inevitably lead to lower costs for the service providers and, consequently, customers.
The customer conversion cost will always be the same, except it gets cheaper as a business gets better at nailing relevancy.
Another beneficiary includes content providers.
Content providers who share content on the apps enabled for the ad-free marketplace will get a real share of the online marketing revenue rather than the tiny scraps offered to them with the established ad-tech models.
This is because Bubblr shares the net revenue with the content consumed on the app proportioned by how much content is consumed — encouraging providers by rewarding well-informed content.
Bubblr’s patent was approved on April 13, 2021. The company is also working with their patent agent on a sister search patent designed specifically for searching the internet, purely for information.
Bubblr’s bold proposition challenges everything we know about the internet marketplace. If the new marketing channel plays out, this could be the beginning of the end for ad-tech.