Due to the price of blockchain management and development concerns, there is increasing talk around the introduction of advertising on Steem. I am not a fan of advertising and do a pretty decent job of limiting my exposure by staying away from television, newspapers, news sites, magazines, aggregator sites... you know, I spend my time on Steem.
Pretty much all the things that are wrong with the other sites from privacy concerns, algorithm crush, censorship and demonetization all come back to advertising revenue. One might like to get paid to advertise a product but in that process, soon the audience and users are likely to take a backseat to the maximization of return. Sound familiar? Once the reliance on advertising revenue for survival happens, just like the death of journalistic excellence, contributors will tailor their content to who pays them.
We already see it and I can name several accounts that used to post interesting content and are now only posting based on who will provide them income, shilling all kinds of random stuff. That is fine, it is their choice and I don't need to follow them. However, this is the problem because once reliant, the risk of demonetization if non-compliant comes into play. So much for freedom of speech when what you say is going to determine whether you eat a meal that day.
Almost a year ago to the day I wrote this piece called, The curse of advertising revenue. if you want a little blockchain history.
Concerns aside.
Having said that, in the world that is an attention economy driven by advertising dollars and product sales, it is pretty much inevitable that this is going to come increasingly to Steem also as if it does not here, it will on other chains and they will have access to massive development budgets and incomes to grease palms. It is an economic arms race.
Essentially we need to find a way to keep the lights on without becoming what we have been running from, centralization. Advertisers are centralized organizations and if contributors are influenced to create for them for income, by proxy Steem is centralized to a large degree also, by the very people who Steem was designed to avoid.
But... options. It all comes down to user choice and that is something I think needs to be remembered on this blockchain by everyone, including me.
One funding option is Stake lock:
This is one part of the reason I am for the ability to lock stake away for 100% return from the inflation pool as it gives the option to invest passively. It would also give the possibility for the higher staked apps and users to lock away funding from the inflation pool for development while leaving the visible content side of the demographic to their own devices.
It would essentially get rid of most bidbots (often developer run) voting on user posts and can instead be used to invest into actual Steem development itself while still locking up stake and providing RCs for bandwidth. Investors cold then use some of their gains from the pool to back projects, hire developers, pay for nodes without it costing them their direct stake, just a portion of their return.
Back to advertising...
At SteemFest I spoke to a couple of familiar people about advertising through users directly as using highly influential / visible users as advertising vehicles will get a hell of a lot more eyes on a product than boosting a post to Trending (@nonameslefttouse has good stuff on this). As said, options so this would in my opinion have to be an opt-in process where a user could list themselves in a market place and based on some kind of ranking algorithm (similar to @steem-ua) be ranked for pricing and product type. The user can then choose what advertising they are willing to show as it is possible that bsed on it, their supporters will be happy, or not. This is a very good way to distribute value to visible users (usually the ones with consistent track records of quality and engagement) and bring attention to products, applications and services.
Inwardly outward facing
To decentralize Steem requires more Full nodes that are spread across diversified points globally. As far as I know (taken from @exyle) there, are only a handful of witnesses running a full node, @gtg, @good-karma, @aggroed with @followbtcnews, @ausbitbank, @curie, @anyx, @privex, @thecryptodrive with @reggaemuffin. Some of those are running applications and services @steemmonsters, @esteemapp, @buildteam etc. These apps and services need to continually keep driving the face of their application outward for external investment purposes and of course, onboarding new users as the case may be.
When it comes to freedom of use on Steem, there is absolutely nothing stopping any application from building an advertising marketplace, introducing advertising models, forcing users to view banners through their interface or whatever. It is not up to Steemit Inc. It is the community that drives development here and while Stinc refocuses on their cor competence of blockchain development, it is up to the layer up developers to pick up the ball.
A large part of this was already seen (and mentioned at least by me) in the move away from Steemit being the onboarding mechanism and pushing capabilities to communities and apps.
However, the game
The issue for applications is that in a decentralized and free environment like steem, they have to create a compelling enough project that investors are willing to buy-in, users are willing to use, advertisers are willing to leverage and consumers are willing to view. This can be difficult when they gear their experience to advertising revenue alone in a community that has been trying to move into an area of financial self-sufficiency.
But, for crypto to really do well it has to continually encourage traditional players to make the move over to blockchains and part of that is demonstrating to them that they are able to streamline their businesses, reach users and reduce the cost of transaction and communication so that they are able to do more with less cost.
This makes it all a bit of a balancing act of sorts where the crypto industry needs to define itself as a standalone industry while courting the traditional behemoth corporations and industries without getting swallowed. As much as immediate investment funding is needed, care needs to be taken in how much control is given away in the process. Knee-jerk reactions rarely lead to good consideration.
But of course
None of the philosophical and idealistic ideas of the blockchain actually need to be considered if profit is the only goal. But then, why be decentralized at all? The reason the centralized platforms are able to generate such huge profits is because they can choose exactly what changes will be made, who is allowed to be included, who can develop and, they can choose precisely who they are going to distribute value to on their platform and, at what level. How much of the entire value goes back to contributors and users? That value is advertising revenue and data sales.
Data is free on Steem for anyone who wants it as it is all open, uncensored, available. Where data can be somewhat closed off is through the applications as they (like Dlive did) can store parts of their information off chain and make it inaccessible without permission. That in itself is an opportunity that applications could leverage to various degrees of effect, especially if they offer a compelling user experience or real-world solutions.
Lots of complication
While there is a great deal of options on Steem, each adds layers of complication that compound to create complex dynamics of various sorts. One change toward a desired outcome can lead to several more undesirable making a potential negative of the net good. We have seen this many times in the past already and I would predict that the foray into advertising revenue is going to raise many more complications. Is this bad though?
Again, I am someone who looks to maximization options so that people can choose more of their own lives ahead of them. There is going to be some degree of good and bad in every choice and with every gain, there will be associated costs incurred. Some will be financial, some will be to the community or individuals themselves.
It is going to be interesting how various applications and groups approach the future of advertising here and whether it will lead to the vast sums of cash they expect it will. How many users does an advertiser want to see before they start advertising?
Taraz
[ a Steem original ]
The current web 2.0 model of advertising funded online services is completely broken, as George Gilder has set out in detail in his new book "Life After Google".
"Free" is not really free.
Not only are YOU the product, but "free" it destroys the pricing signals that a free market economy relies upon for efficient allocation of resources.
The Cryptocosm provides the solution and Steem is at the forefront of this revolution.
There are many valid revenue models for Steemit: charging app developers for use of full nodes, beneficiary % on Steemit posts (even the playing field with other apps), etc but advertising should be avoided like the plague.
Free is never free
I agree but I am going to predict that 'no advertising' is going to be a very tough sell for most people as it seems to carry a sense of easy money. I am hoping that since the decentralized aspect, there will be a mix of solutions available.
I remember watching this video of @ned from a blockchain conference in Las Vegas back in 2016. As far as I’ve understood it, advertising was always part of the plan for Steemit. The caveat was that advertisers would have to buy ads in STEEM, not USD or fiat. That made sense to me as it would be a steady value injection in to the STEEM blockchain. The problem is, and I’m sure this is because Steemit Inc doesn’t have a choice given the current situation, this is probably the WORST time to be talking about rolling out advertising. Other than a handful of mainstays, my feed is a ghost town right now. How are you going to sell Steemit to potential advertisers with this kind of interaction?
One thing I’m curious about is if Steemit does adopt advertisers, I wonder if we’ll see our version of “influencers” arise. The trend on Instagram used to be massive accounts with over 1M followers targeted as influencers, but over the last two years, companies have been going after a high quantity of lower follow based accounts as a shotgun approach. I despise the concept personally, and I even hate using that dumb word, but even my Instagram account has been getting DM’s and emails to become an “influencer”. I wonder if the day is coming where (77) and higher will be trying to sell us Swatch watches and Apple products, lol
I have been pushing for this in various ways for a little while now but people seem to think that you are only worth one post at a time which is nonsense. I would say that if advertisers did happen to get interested, they would quickly identify the people who can best vehicle their products and ideas.
Above 80 and all you need to do is pretend to be a trade analyst ;)
Yea advertising is pretty much the bane of internet existence. So many had all sorts of hopes and dreams about the net changing the world...it didnt, the world changed the net. Sort of what will happen with crypto.
You also asked this question "But then, why be decentralized at all? "
I think of much of crypto peeps saw what satoshi pulled off and got super excited with a "new" technology. I think because it was new many of the developers who didnt really grasp decentralization but thought it was catchy and cool jumped in on it....not really seeing it as a need but a hype train to get on.
Steem is at best a bastard monstrosity of decentralization because lets face it because of how things started its all centralized anyway. It makes a good selling point but its not even close to the reality.
Thing is if this place launched smooth and professionally it wouldnt nearly be as exciting as it is now :)
This is another reason why I would like to see SMTs take over distribution so that the Steem pool can be essentially locked for development purposes but empower new models.
Who doesn't like amusement parks?
I read you post and like you hate advertising a plan needs to be hatched to try at least stay away from it.
I started to read the comments but they need more time. Not like the normal good post comments but serious ones today.
Yep, it is good when things get taken seriously here sometimes :)
Your idea about advertising sounds quite good. If the opt-in process works well then it'll be different from other platform. I wish there is much better option than advertising.
I'm reading many posts about Steem market decentralization, but it seems that nobody is still sure how would it function in future. Maybe I'm wrong.
"While there is a great deal of options on Steem, each adds layers of complication that compound to create complex dynamics of various sorts. "--- this is very true. A minnow like me would find the place very complex and I'm seeing people around me are now leaving this platform.
But let's hope for the best.
It depends on which demographic you operate because the developers aren't leaving, they are still developing and there are still many investors coming in. I would say that if price was higher, a lot of the contributors would still be here too.
That's true, developers will continue to contribute to make things easier. But what I was saying is, it's hard to decide the right path in this platform,coz there is so much going around.
Thanks for your concern.
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Absolutely. It is something I love about it all. I think that in time there will be much clearer paths to follow if people choose or, many more paths if they want more complexity. If you think that is a user comes in on @Steemmonsters they may never see a blog, a user on @steemhunt could only look at it as a discovery platform for products. They might love the simplicity or, explore further down the rabbit hole. I like rabbit holes.
You are a different thinker, I have to approve. Or may I say, helping me to see my path clearly. Thanks you.
Posted using Partiko Android
It is inevitable to drive revenue to the ecosystem as the infrastructure is not free. While many (me included) do not like the prospects of the invasion of advertising, I think it could be done in an innovative way that promotes what we want to see and when in exchange for incentives for our participation. The alternative is a more expensive freemium model to the users as we would need to pay (or earn less) for our engagement here and I do not think that was the fundamental idea of the ecosystem. At the moment, the challenge is how to balance the costs and the revenues into a model that is sustainable for the ecosystem and that may come with tradeoffs as we build the foundation. However, if successful costs are scalable which would lead to incremental incentives if value is ultimately added to the protocol by way of engagement.
Posted using Partiko iOS
Yep, I think that a great deal more innovation is needed in the blockchain space but for the most part, there is the mindset of replication of traditional paths. Time will change that process heavily though.
I do think there would be a tradeoff between advertising and "censorship resistance." I also note that yes, any advertising would need to be on the presentation UI for the dapps. That's why I don't quite see how the money makes its way to Steemit Inc. to pay their development, api and full node costs. It seems the only beneficiaries would be the dapp showing the advertising and the users they split it with. But maybe that's enough if there is a shift to the dapps covering costs Steemit Inc used to cover.
I think having general platform advertising introduces fewer problems than having "super users" who get paid according to some algo like steem UA. I like steem ua, but there would be so much gaming of the system if we started seeing significant money be awarded by now. Right now steem ua is giving about a .10-.40 upvote once a day. Big difference of incentives when advertisers could easily give tens or even hundreds per post. I've done a few posts for Oracle-D, which is a kind of advertising, and they typically give a $5-40 upvote.
So I'm not so sure on the advertising route at all, though it may be the one the community decides to run with just to keep things running at all.
I still prefer your idea of the token lockup. Is discussion advancing about that?
I think it doesn't need to if the Apps create their own nodes and Stinc can reduce their costs heavily. They can then also develop the chain to make it lighter to reduce node costs and then have some stream come in from the Dapps themselves.
I mentioned Steem-ua because of algorithms only but large advertisers would create their own versions, almost guaranteed.
I think Steemit.com should be killed off and let the app interfaces take over and monetize themselves enough to cover a full node cost at least. One of the apps could still offer the same interface as steemit.com and take a beneficiary for it.
Not as far as I know but I keep mentioning it ;)
So, I think you and I come from the same starting perspective of 'not a fan' of advertising @tarazkp, to the point of avoiding as much of it as we can. In my mind, the ability for anyone to get their wares directly in front of an audience (ie, posts, comments and anything else) without the traditional methods of advertising (commercials, now banner ads/adicles/infoads) is the future.
Maybe it's a pipe dream. Maybe the ability for a dApp to exist without charging users while not having some other source of funding (ie, advertising) is impossible. Maybe not everyone and everything that could end up on the STEEM blockchain is going to be able to survive just on the reward pool (or whatever other potential financial model might exist here).
The issue for me is, I don't know if anyone has even tried to look at anything else. There's the STEEM reward pool and if that doesn't seem to be working, then it's straight to advertising, from what I can tell. It seems to me that just because Steemit Inc is having some pretty big issues, that all of sudden, everyone is in panic mode, and it's either run for the nearest exit, or it's forget any idealism, it's time for businesses to see our data (for advertising to be effective, in some way or another, businesses will need to be able to target us—be it personal data, or be it our personal preferences on the blockchain).
Does the current STEEM business model work, or doesn't it? If it doesn't, can some other models that are in keeping with STEEM's intent spring up in its place—ones that might work for individual dApps. If not, then it seems to me that we don't have much of a future for crytpocurrency, at least not the kind STEEM is. The utility kind. The ones you can actually do something on.
The reward pool can only support a large number at high price and even then with decent distribution levels. Part of the problem for a long time is that apps are nearly all inward facing.
The real reasons they are here become apparent. The data is freely available :D
It seems like at least a dApps have been beefing up on accounts, which I'm assuming means they're going after users. Can't say that I've seen any advertising, but then, I haven't been looking either. :)
Well, see, that's true, which makes me wonder why a business would pay for the data if they can just go on and get it. They really don't need to pay a dApp do it for them. They just set up an account and start looking around. Maybe create their own dApp or browser tool like Waivio and go targeting clients.
A complicated process for sure. As with any new endeavor, the outcome will determine the worth.
There is a big benefit I didn't mention and that is, with so many apps and services, it is possible to trial many paths and find the ones that best fit communities.
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