The Steem community is growing, and with it - so is the value of our attention. Already, many are paying hundreds (sometimes thousands) of dollars to bid-bots in order to be featured as one of the top trending articles.
Advertising = More Money into the Steem Economy
Online advertising is a billion dollar industry. Bringing that industry to Steem has the potential to dramatically increase the amount of capital flowing into our ecosystem. More money in the Steem ecosystem translates into more money for users, more money for investors, and higher STEEM prices.
Users: The Life-Blood of the Steem Economy
Many content creators on Steem struggle to earn sufficient income due to the lack of attention from large stakeholders, as well as the inability to monetize content after the seven day payout period.
What if content creators were able to further monetize their content through the use of ads? This is nothing new. Platforms like YouTube already offer this. Typically though, these platforms take a majority cut of the money. The content producer only earns a small percentage of the overall revenue taken in from the advertisements.
I am a firm believer in the mission statement that was written in the Steem whitepaper: Rewarding the users for the contributions they make to the platform.
If a user is generating content that is worth thousands of dollars to advertisers, why shouldn't they keep 100% of the ad revenue?
100% of the Ad Revenue - How is that Possible?
There are two parts to this:
- A standardized protocol for the advertising system to run on the Steem blockchain.
- UI changes to websites (like steemit.com, SteemPeak, Busy.org, etc.) to display the ads.
Part 1: Standardized Protocol
In order for the advertising system to work across multiple UIs, the data stored in the blockchain would need to follow a consistent format, so that all UIs would know how to render the data.
This is something that will need to be discussed with the various developers in the community (especially the ones running their own UIs), so this proposal is by no means 'final', but let me offer a simple prototype to illustrate how the system would work:
- Advertisements will be based on a time-based, payment weighted bidding system.
- Time increments can be purchased in one hour increments, up to a maximum of 7 days.
- To purchase ad space, the advertiser sends STEEM to the user whose content they want to advertise on, using a specially formatted memo.
- Advertisers can purchase space on a user's entire blog (i.e. all of their posts) or on a specific post. To advertise on an entire blog, the memo should contain a
*in place of a specific link to advertise on, and the payment will be divided equally among all of the posts that are active during the purchased time period.
- Advertisers will only be able to advertise links to other Steem blockchain posts.
Here is an example of how the memo could be formatted:
Some additional variations that could be integrated into the protocol include:
- Allow users to refuse advertisements via their settings.
- Allow users to specify a minimum payment amount via their settings (i.e. ads will only be displayed if they are at least 0.1 STEEM/hour).
- Allow users to specify whether they will allow NSFW advertisements on their posts. A global black-list would be needed for advertisers not complying with the rule.
- Allow users to set a threshold to only allow ads from advertisers who have a history of completed ads above a certain STEEM amount (i.e. only allow ads from advertisers that have already purchased over 300 STEEM in previous ads).
Part 2: UI Advertisement Rendering
Each individual UI will choose whether or not to display the advertisements, and how to render them if they do. UIs that decide to display the advertisements will be giving the content creators on their platform additional incentive to produce high quality content.
To determine which advertisement gets displayed at a particular point in time:
- Collect a list of all advertisements that are active for the current time, and enforce all of the soft-consensus rules for the protocol.
- Sum up the total amount of payments that are active for the current point in time.
- Take the percentage of total payment for each advertisement to determine it's chance of being displayed.
- Randomly pick one of the ads to display based on the weighted percentage.
To illustrate, let's say that a particular article has three advertisement bids:
- Advertiser A has bid 5 STEEM for their ad.
- Advertiser B has bid 3 STEEM for their ad.
- Advertiser C has bid 2 STEEM for their ad.
For simplicity sake, all three adds were placed at the exact same time, and are each for 24 hours worth of time.
Each time that a post is rendered on the UI, the UI picks one of the ads to display. Ad
A has a 50% chance of being chosen; ad
B has a 30% chance, and ad
C has a 20% chance.
This would obviously be a major change for the platform, and would require significant effort across the developer community to get off the ground. At the same time, it has potential to dramatically increase the utility/value of the platform. I'm interested to hear what everyone thinks.
Please share your thoughts in the comments below.