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How Crypto Incentives Work, Explained

Crypto platforms are taking innovative approaches when it comes to incentivization, but what does it mean for miners and the people who use these services?

Where do loyalty programs fit in?

This marketing tool has been suffering issues for years.

In the non-crypto world, consumers are overwhelmed by the number of schemes offered by retailers and are disappointed by the rewards. Blockchain projects are hoping to inject some innovation into this sector by offering schemes which are meaningful to shoppers.

The startup behind Elipay — Eligma — says its approach involves a universal loyalty scheme. Instead of carrying around a wallet full of cash and credit cards, consumers will be able to shop and receive rewards from a plethora of merchants in one place. The tokens that customers earn can then be used for further shopping or for receiving the benefit of discounts on goods and services. This also has the potential to deliver a boost to merchants who have been struggling to compete with online giants such as Amazon, as they can offer compelling deals to drive repeat customers.

 

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

Can tokenizing services help boost investment in crypto companies?

Potentially, as one of the biggest ways to incentivize crypto users is to create utility.

One of the biggest challenges for many crypto startups out there is that they hold crowd sales for utility tokens, but it is not clear whether or not they will be able to satisfy the public’s demand that the tokens be used in exchange for goods and services.

To incentivize the public to embrace cryptocurrency, there need to be clear benefits in using this new form of payment in the first place — offering something that they would not be able to find somewhere else.

Shopping is something we all do every day, and old habits die hard. When it comes to incentivization, it is necessary for crypto startups to think outside of the box in order to encourage the public to try something new. Systems for mobile payments with crypto at offline and online stores such as Elipay are addressing this challenge by offering shoppers cashback in the form of crypto tokens whenever they make a purchase. This solution was to create a network of retailers at which people can spend their assets without converting them back to old-fashioned currencies.

Does proof-of-stake (PoS) offer any advantages over PoW?

One could argue that PoS provides a double incentive.

Here, the onus changes to “staking,” where miners have a better chance of being chosen to add a block to the chain — and hence get rewarded — depending on how many coins they possess. As well as being motivated to invest in a platform and support a currency to increase their profitability, there are the rewards to think about on the horizon.

Although it has addressed some of the issues inherent in the PoW protocol — namely the extraordinary costs involved with mining, which can run into hundreds of thousands of dollars a day — it does deliver its own disadvantages. For example, PoS does run the risk of monopolization, where a few validators rich in coins end up receiving the lion’s share of the rewards.

All of this said, PoS does inoculate a platform against a so-called “51 percent attack” — as such an attack would likely devalue the digital currency which the validators themselves own. In a PoW scenario, miners can reap rewards even if they don’t own the asset involved. Again, it just goes to show that incentives in the crypto world can present themselves in many ways.

How is proof-of-work (PoW) an incentive?

Miners are rewarded, but the costs are high.  

Proof-of-work — known as PoW — sees miners compete to become the first person to solve mathematical puzzles using their computation power. Miners who beat their rivals to the punch are then rewarded in the form of cryptocurrency, and major networks — including Bitcoin and Ethereum — use this consensus algorithm.

Fans believe that PoW delivers an array of benefits. First off, it insulates a platform against denial-of-service attacks. Additionally, it puts miners on more of a level playing field, and decision making on a network does not hinge upon their wallets. Instead, they should be willing to splash out on hi-tech machines that can be very expensive to run.

How are blockchain marketing tools incentivizing users?

They promote a sense of community and inclusion within a platform.

Cutting out the middlemen has tumbled fees, and many startups are using this to their advantage. In addition to cheaper services compared with their mainstream rivals, they are luring in users through revenue-sharing schemes that give everyone a slice of the profits. This encourages loyalty to a platform and drives participation. Miners and validators — the people who make transactions run smoothly on the blockchain — are also getting rewarded through the contributions they make to a network, and crypto enthusiasts with expertise are being incentivized to uncover security flaws through bounties or to embrace new coins through airdrops.

Blockchain platforms are also helping brands connect with consumers directly, eliminating the middlemen who act as a conduit and distort the message. From an advertising perspective, the power is now also in the hands of the shopper. The public is being given opportunities to be paid in tokens when they are exposed to advertising, and they can decide which data about them is used for this purpose. It ultimately helps brands target their products more efficiently, giving them greater value for money.

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Blockchain in Media: How Blockchain Can Help Advertising

Advertisers and brands are increasingly losing patience with ad agencies and other players over the lack of transparency in the digital advertising space. Digital ad revenue for the first half of 2017 came in at a record $40 billion, up from $31 billion for the previous year, and it was estimated to have reached $85 billion by the end of 2017.

The fight for transparency intensified in 2017 after The Times of London published a report about how the ads of big brands were appearing alongside racist videos on the giant video platform YouTube. Several brands paused their spending on YouTube advertising temporarily, until YouTube reassured them that it had taken measures to correct the issue.

The issue with YouTube speaks to the larger theme of a lack of transparency in the space. There isn’t enough information at the disposal of the advertiser regarding what they’re buying and how much they’re paying for viewed ads. Duracell, furious after finding out how much of its money goes to hidden fees compared to the actual amount it spent on ads, built its own advertising audit system, whereby it relates directly with a demand-side ad platform and a brand safety vendor — all in a bid to be more informed of its advertising moves. Simply put, advertisers are looking for a more transparent way to connect with their customer and audience. 

How does traditional ad buying work?

Typically, the advertiser — the brand that’s looking to connect with its audience — contracts a digital ad agency to manage its entire ad campaign, with the advertiser having a set target it aims to achieve from the campaign. The advertiser pays the ad agency an amount that would cover both the overall cost of creating ad content and the cost of distributing the ad content to the brand’s target audience/customers — these two types of costs are what digital media experts call non-working and working spend respectively. One thing to note here is that an ad agency’s overhead cost is also part of the non-working spend.

Once the ad agency has developed the content for the desired channels, it buys ad spaces — also called ad inventories — where the desired audiences would see the content. The ad agency has two options for buying ad spaces: buying directly from the publisher and buying programmatically through an ad exchange platform. 

This usually long process fosters a lack of transparency — hidden fees, fraud, traffic, measurement and viewability — especially with programmatic media buying. For clarity, the transparency issues here can be broken into two main parts:

  1. Fees and charges from vendors and other players along the supply chain.
  2. Fraud and viewability.

The first part is fostered by the long nature of the programmatic ad supply chain, as shown in the image below.

The road from advertiser to audience

With each arrow in the image above, you can think of ad dollars being transferred diminishingly. And in many situations, the advertiser isn’t aware of how much each player in this system takes. According to a report from the ad industry trade group IAB, 55 percent of programmatic ad revenue goes to ‘ad tech’ services, while publishers receive only 45 percent. The findings from IAB demonstrate that non-working ad spend (ad dollars that didn’t get to the publisher) cost advertisers more than working spend. There are two problems here. First, advertisers don’t usually receive sufficient information about these costs. During a Digiday Programmatic Marketing Summit earlier in the year, an unnamed advertising executive said:

“If we have problems with [transparency] today, then it’s not because of the technology powering advertising — it’s because we’re not sharing the information needed to stop brands [from] throwing money into a black hole. We’re having these conversations about transparency over and over again, but the knowledge needed to change the situation isn’t being shared.”

The second problem is that publishers, who actually provide the platform for brands to reach their audiences, are paid less than the intermediaries.

The ad fraud and viewability part of the overall transparency issues originate from publishers selling fake impressions (fake clicks and bot traffic). Domain spoofing, whereby a publisher somehow presents his domain to be a larger publisher’s domain, is another part of the fraud problem. Ad fraud reportedly cost the U.S. advertising industry about $6.5 billion in 2017. Again, as in the case of hidden fees, sufficient information on how publishers verify their traffic, and the processes that ad agencies and other intermediaries follow to ensure that they work with publishers with verified traffic, needs to be available to everyone within the ecosystem.

This is where blockchain comes in. Indeed, blockchain in advertising is likely to be where we’ll see the most rapid adoption. They are a match made in heaven. Advertising lacks the transparency of data and process. Blockchain offers the transparency of data and process.

Here are a few practical ways that blockchain can help bring transparency to the ad buying process.

For buy-side transparency: Blockchain for auditing

Truth Agency, founded by U.K.-based The Marketing Group, is working to help alleviate the transparency issues in programmatic advertising, mainly by rapidly auditing advertising transactions. As been stated by CEO Mary Keane-Dawson:

“We believe that advertisers are not seeing the full picture, in some cases money flows backward through the supply chain to pay for fees not exposed to the advertisers.”

Given that the problem of transparency is systemic rather than technological, Kean-Dawson believes that taking the entirety of ad buying to the blockchain is an unnecessary and complex endeavor, and that is why Truth Agency is only looking to use blockchain to audit ad transactions.

The blockchain startup looked at the ways some of the existing auditing services worked and simplified their processes by splitting it into two key parts: data collection and media contract verification. 

The media contract is a ‘dumb contract’ that features the suppliers allowed within a certain campaign:

“These suppliers, along with the agreed fees (%, fixed price or CPM), whitelists, blacklists, etc. are recorded, along with what we call threads that allow us to match data between suppliers are recorded in a contract file and then transferred to the blockchain. The data collection element currently takes data from the various DSP, SSPs and publishers for the campaigns that we run, [and] this data is stored [in] the blockchain.”

Once Truth has the contract and data stored on the blockchain, it then processes each transaction from each supplier based on the rules written in the contract and publishes an audited version onto the blockchain on an hourly basis The company flags any transactions that cannot be verified through the data it has, such that both the advertiser and the team involved would be notified about the discrepancies. 

Global ad software giant Mediaocean partnered with IBM in June to use blockchain to bring transparency to the “entire lifecycle of an advertiser’s media dollar flow.” As the statement goes:

“From issuing of the purchase order to the execution of media and payment — [IBM’s] blockchain is used to record all media transactions in a secure, immutable, standardized and comprehensive manner.”

For sell-side transparency: Proof-of-view to fight fraud

Transparency issues on the sell-side relate to the fake traffic count, bot clicks and domain spoofing discussed earlier. Verasity — a blockchain-based, video-on-demand platform similar to Vevue — is working to improve publisher transparency with its proof-of-view (PoV) blockchain technology. PoV, which is currently pending patent, is built to securely verify and record content consumption within the Verasity ecosystem. PoV features publicly auditable logs that contain all the view counts as well as anonymized viewer information for media buyers to view, according to Verasity. The company claims that the information included in the logs are GDPR, PCI DSS and ePrivacy compliant.

Verasity outlined six steps in its white paper that PoV follows to prevent fake views.

  1. PoV only records views from signed-in users, since the viewer’s unique ID is part of the information required for a view to be considered valid.
  2. Since most people are only able to watch one video at a time, the PoV will invalidate views from a user who is streaming multiple videos simultaneously.
  3. The PoV technology confirms that a video is actually being streamed by capturing information about the current frame at random times. Verasity claims that this measure helps weed out bot-generated views.
  4. Verasity requires that its video player, VeraPlayer, is visible within the browser and not scrolled out of view or minimized for that view session to be captured by the PoV system.
  5. Verasity would demand users perform occasional manual confirmations (think reCAPTCHA) should they exhibit suspicious behaviors such as viewing a video on a loop.
  6. Being a blockchain technology, view information is publicly available and auditable on multiple servers.

Using smart contracts to document views and who gets paid

TV-TWO, a player in the digital TV space, is also using blockchain to improve the advertising industry. TV-TWO has created a Smart TV app — currently being tested on Samsung and LG smart TVs — that allows consumers to watch a free, personalized video stream that is curated by a supervised learning algorithm, enabling more organic content variety and relevance.

Through a campaign management tool, brands are able to book their desired advertising spots on TV-TWO using TV-TWO’s tokens. The startup employs a smart contract, which single-handedly manages all the payments within the TV-TWO ecosystem. The smart contract publishes all the transactions that takes place regarding any single ad video — from advertisers to viewers and TV-TWO — on the Ethereum blockchain without any input from the TV-TWO team.

TV-TWO seeks to alleviate the scalability concerns of Ethereum blockchain by deploying off-chain signature patterns and state channel technology.

TV-TWO’s supervised learning algorithm is able to serve consumers with highly relevant videos by picking up data on each consumer’s “preferences in traditional TV, in-stream behavior, surveys and other data,” co-founder Philipp Schulz said. To offer relevant ads only, the anonymized data is used for campaign targeting by advertisers. The promise of TV-TWO is to serve consumers with personalized content on TV and offer advertisers accurate, trustless information in their campaigns.

TV-TWO recently advertised 20th Century’s recent blockbuster “Deadpool 2” on its platform — as part of its partnership with 20th Century Fox of Germany. Markus Schneider, 20th Century Fox’s German CFO, said the company is delighted with the results of the campaign, stressing the advantage of having direct access to their target groups on TV and paying for actual viewers only. It’s noteworthy that Schneider joined TV-TWO’s advisory board after the “Deadpool 2” campaign.

The Problem with incentivizing people to watch ads online

Advertisers are likely to appreciate being able to potentially know the actual number of people who “saw” their ad, but it’s not certain that Verasity’s PoV and TV-TWO’s system will be 100 percent foolproof. 

With Verasity, for instance, there’s no way PoV can confirm that a user — even if they meet all the criteria mentioned above — are actually watching a video, although this shouldn’t normally be a problem. After all, if a user visits YouTube to watch a video, they mostly do it for a reason, which means they’ll actually watch the video. It’s a different story with blockchain-based, video-on-demand platforms. The lure to use blockchain streaming services is to earn money by providing your data and watching advertisements. 

It’s therefore possible that a user could view videos that contain ads for the sole purpose of earning some money. This means that it’s possible for a user to play a video in a way that meets all the above criteria but stay away from their streaming device to do something else while the video is playing — and still earn money. In this case, even with the publicly available and auditable information of views, advertisers might still be unable to get a genuine sense of the value they get from advertising with Verasity and any other platform with a similar model.

One could argue that the tokens available for earning might not be valuable enough to encourage people to try to trick the system in this way. While that could be true, it’s still a downside worth noting.

The takeaway from our conversation and research of blockchain in the media space is that blockchain can definitely play a part in moving the media space forward, especially in the advertising space. However, as innovative as blockchain is itself, it cannot, as a single technology, take away all the problems in the media space.

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Exchange Using AI and Blockchain to Tackle Ad Industry’s $19 Billion Fraud Problem

An ad exchange network is combining an artificial intelligence (AI) system with blockchain technology to tackle eye-watering levels of fraud in the industry and stop consumers from being bombarded with irrelevant ads at inappropriate times.

NOIZ Chain says the public, and the brands trying to reach them through advertising, have seen their patience wear thin following a slew of scandals involving digital media. While consumers have been reeling from the Cambridge Analytica scandal, that resulted in millions of Facebook users having their data sold and used without consent, advertisers have been falling victim to bots which generate fake clicks, meaning their content never reaches the intended audience. It is estimated that this form of ad fraud will see businesses lose $19 billion in 2018 – representing 9 percent of the total spending on digital advertising for the year.

NOIZ is going to offer cognitive banners that aim to increase user engagement and provide advertisers with meaningful data on how their campaigns have been performing. The technology, named “Nikola”, enables consumers to receive NOIZ tokens when they interact with an ad. These tokens can then be saved up and used to obtain discounts on products and services. NOIZ tokens also grant the opportunity for token holders—companies or individuals—to easily give NOIZ tokens away to support charitable foundations and facilitate social impact through real user engagement. Chat with an ad, earn rewards, exchange for a discount, and in doing so, contribute to making the world a better place. It’s a beautiful concept.

Andy Ann, NOIZ’s founder, told Cointelegraph: “It is high time that the ad exchange network evolves in this digital era. With the  growing concern for protection of privacy, the billions of dollars wasted due to ad fraud, and publishers’ concerns over data leaks and cartelling in selling out ad inventory, the NOIZ ad exchange offers a one-stop solution to resolve all these issues.”

“Open and decentralized”

NOIZ also wants to tackle the scourge of fake news and unethical advertising which has gripped the Internet in recent years, and ensure that users are only served quality content. The platform’s community will be able to vote against advertisers with questionable business practices, as well as publishers who post fabricated stories or plagiarized content. It is hoped that this approach will make both parties accountable for their actions – enabling them to regain the trust of consumers who are fed up with having their personal details misused.

“We believe this will be the only way to build a robust advertising model for true engagement now and in the long-term,” Mr. Ann added.

Although advertisers will be held to a higher standard through the NOIZ platform, the company says businesses have a lot to gain as well. Consumers will be rewarded for sharing their data with the brands and publishers they trust. This valuable (and accurate) information will help businesses target their campaigns with a precision  not achievable on traditional display advertisements. Currently these advertisements are often placed by algorithms that effectively guess what adverts a consumer might be interested in based on their browsing history, age, gender and location. NOIZ says its cognitive ad network uses AI technology that has generated 30 times more engagement, and in turn, can create a boost in revenue for publishers.

The future of NOIZ

The NOIZ team is preparing to unveil the platform prototypes that have been developed over the past two years.

Interested contributors are now being invited to join a whitelist ahead of the NOIZ token sale in the third quarter of 2018. Its cognitive ad technology is scheduled to launch by the end of the year, and ad trading between publishers and businesses will be enabled at the beginning of 2019. Other features – including a consumer wallet, consensus voting and the ability to support charities by donating NOIZ tokens  will follow.

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

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Facebook’s Crypto Ad Ban Reversal Power Play Gets Their Own News Stuck

It has been an interesting time for Facebook and its relationship with cryptocurrencies ever since they made a precedent setting move to ban adverts on their platform that had anything to do with cryptocurrency in January this year.

The social media giant has since updated their policies to once again allow cryptocurrencies to advertise on Facebook, although it has continued its ban on ICOs. This move is being seen as a positive for the cryptocurrency space, which has earned back a major advertising platform on which it can reach a large number of users.

However, behind the scenes, all is not as it seems as cryptocurrency-related content continues to get caught in the web.

Setting a precedent

On January 30, it was announced that Facebook would be updating its advertising policy prohibiting ads that use “misleading or deceptive promotional practices,” this includes ads of cryptocurrencies and ICOs.

Even back then, the message from the social media giant was confusing, as the decision by Facebook came just after its founder and CEO Mark Zuckerberg said in a personal post that he had a desire to study cryptocurrencies further:

“There are important counter-trends to this — like encryption and cryptocurrency — that take power from centralized systems and put it back into people’s hands […] I’m interested to go deeper and study the positive and negative aspects of these technologies, and how best to use them in our services.”

‘Intentionally broad’ ban

The post announcing the ban did mention that the policies would be revisited later down the line, and that it began as ‘intentionally broad,’ however, this direct U-turn has come as quite a surprising move from Facebook, even if it is only currently being paid in lip service.

‘Intentionally broad’ ban

Source: Facebook

The move from Facebook opened the floodgates for other such social and internet platforms to follow on and also ban anything crypto-related.

In March, Google took on Facebook’s reasoning for banning cryptocurrency ads. Under Google’s updated financial products policy, no advertisements for “cryptocurrencies and related content (including but not limited to initial coin offerings, cryptocurrency exchanges, cryptocurrency wallets, and cryptocurrency trading advice),” would be accepted.

Twitter then followed suit, confirming long-standing rumours that it would also stop all forms of cryptocurrency advertising. Twitter blocked out ICOs and other token sales, as well as advertisements for exchanges and wallet services, unless they were public companies and listed on major stock exchanges.

The announcement of the Facebook ban, in January, saw Bitcoin drop, as it went from $11,200 to $8,800 over a few days after it was announced.

Bitcoin Charts

Source: Coinmarketcap

Bitcoin fell below the $8,000 mark in March on the news, and Ethereum went under $600 when Twitter and Google announced their bans.

Bitcoin Charts

Source: Coinmarketcap

U-Turn

On June 26, the same policies were again updated and Facebook announced that it would allow cryptocurrencies to be advertised again, but ICOs would remain banned. The company stated that it had been looking at the best way of refining its blanket ban on cryptocurrency adverts.

The revised “prohibited products and services policy” now reads:

“Starting June 26, we’ll […] allow ads that promote cryptocurrency and related content from pre-approved advertisers. But we’ll continue to prohibit ads that promote binary options and initial coin offerings.”

The interesting wording there is that Facebook is looking to allow content from ‘pre-approved advertisers’ and so it cedes that, “not everyone who wants to advertise will be able to do so.”

It gives Facebook a lot more control and dominance over the cryptocurrency space on its platform, and allows — in its centralized manner — the platform to pick and choose the cryptocurrency projects it deems worthy.

Contradictory actions

While Facebook says one thing about its cryptocurrency policy, it seems as if it is doing something entirely different. The social media giant has had a confusing relationship with the ecosystem with news that it would be exploring blockchain, potentially for a messenger-style app as it was led up by David Marcus, the head of Facebook’s messaging app, Messenger.

More recently, there have been reports in the media that Facebook is looking at launching its own cryptocurrency, a sort of in-app virtual coin.

The reason behind Facebook’s turn around in its stance on advertising has not really been explained, especially considering it set the precedent with the ban in the first place. But with its own work in blockchain and potentially cryptocurrency as well, an ad ban would not be of benefit to the company.

Building a space for itself?

The fact that there is evidence of Facebook entering the blockchain and cryptocurrency market means that there is a lot at stake for the social media giant, especially in a space that is revolutionary and will definitely be important in the future.

By creating an ecosystem that is friendly to projects it backs, or is involved in, it could — if it wanted to — help boost them ahead of others. And with this centralized control, they have a lot of sway over which crypto projects get sufficient Facebook marketing.

Carlos Grenoir, CEO of Olyseum — a blockchain social sports app — sees how Facebook’s reversal of the ban could be selfishly motivated:

“The reasons for Facebook reversing its decision to ban crypto ads are not clear, but the motivation could have something to do with its own strategy regarding the evolving crypto space. The cryptocurrency ecosystem is expanding rapidly, and is growing its footprint in mainstream society, introducing new economic opportunities. We are also seeing regulatory authorities taking steps to provide security to the ecosystem that will in turn give strength to the global economy.”

Not all the news of Facebook’s reversal was seen in such skeptical light, as some in the crypto community ticked this move as a big win for the longevity and advancement of cryptocurrency.

However, Bitcoin commentator WhalePanda, raises an interesting point about Facebook’s current state of affairs and their need to do something revolutionary to keep relevant.

Already having an impact?

Cointelegraph, as a media outlet that operates in the cryptocurrency space, is a company that falls under the gambit of the initial ban and felt the effects of the ban when it would try and boost articles relating to cryptocurrency matters.

The posts which have been put forward for review by Cointelegraph have become stuck, and are not being confirmed, nor denied by Facebook, during the ban as well as after the ban was ‘reversed.’

The only response that Cointelegraph has seen from Facebook in terms of confirming or denying posts during the ban has to do with an article on John McAfee announcing his bid to run for U.S. president it deemed to be political, and thus against its terms. So, according to the Facebook terms, should all media posts covering runners for presidency be denied?

Already having an impact?

After yesterday news of Facebook reversing its ban on cryptocurrency advertisements, Cointelegraph has still been experiencing the same stringent approach on content monitoring when trying to promote this news, only for the post to be left stranded and unboosted with no explanation or reason.

Already having an impact?

It is a confusing space that Facebook has currently created for those in the cryptocurrency space. Cointelegraph is having its articles left in limbo, with no reason or explanation, as Facebook announces the ban on such material is no longer in action.

Plain and clear

If Facebook is indeed vetting those who are involved in the cryptocurrency space, it is yet to be explained, and if this is indeed the way in which the platform hopes to move forward, it could risk bringing a huge undertaking upon itself.

Facebook has come forward and said one thing, but they have not acted how they have said they would. Their decision to change policy has been explained broadly and without much direction, only stating that they have tightened up their broad brush strokes from January.

While the reversal of the ban will be seen as positive from most of the cryptocurrency community, it needs to be investigated further, as it has not been enacted in the manner in which it has been stated.

If Facebook is reopening the gates for cryptocurrencies, it needs to be done so unequivocally, fairly and immediately. If they, however, are using this as a way to vet certain projects and helped their own means, they should be questioned and pushed further.

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IBM Launches Blockchain-Powered Media Transactions Tracker to Prevent Advertising Fraud

IBM iX has partnered with software supplier Mediaocean to launch a blockchain-powered tracker for digital media transactions, the company tweeted June 19. IBM iX is the business and tech consulting wing of international technology giant IBM.

According to IBM iX, the main purpose for applying blockchain in the media ecosystem is to “clean things up” in the media buying industry.  

The tracker will ostensibly address digital ad fraud by preventing payments from going to the wrong parties. Partner in global marketing at IBM iX Babs Rangaiah said that the blockchain pilot will help track the flow of money among media players and cut out unnecessary middlemen:

“Once you identify where the money is going, who the players are and what each of them are doing, I think you’ll see some redundancies in the supply chain that will allow some of that production money now going to the middle players to come back and hit the publishers.”

In addition to providing transparency in the industry, the pilot also aims to reduce the time and cost of media transactions. The pilot will involve media deals for Unilever, Kimberly-Clark Corp., Pfizer, Kellogg, and Watson. According to Mediaocean CEO Bill Wise, the pilot will be fully applied by the “majority” of the digital media industry by the end 2019:

“I think by the end of next year we will have a fully functioning scalable solution that will be adopted by the majority of the industry.”

In April, Procter & Gamble’s chief brand officer reported that around 20-30 percent of advertising budgets are wasted in the media supply chain due to “lack of viewability, non-transparent contracts, non-transparent measurement of inputs, fraud, and now even your ads showing up in unsafe places.” According to estimates from Juniper Research, fraud will cost digital advertisers $52 million per day in 2018.

The recent project is not the first initiative by IBM to integrate blockchain technology into the advertising industry. On April 18, IBM announced a pilot of a proof-of-concept (PoC) blockchain product to “short-circuit intermediaries” between advertisers, publishers, and consumers as well as to provide clear records of contracts and publisher payments.

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Company Launches Blockchain Platform to Enable Transparent and Low Cost Advertising

A company has launched an online advertising platform AdCoinClick that enables businesses and individuals to pay for campaigns using cryptocurrency – all the while providing publishers with an innovative way of monetizing content directly through their websites and blogs.

AdCoin’s founders, all of whom have prior experience as entrepreneurs, say they were inspired to launch AdCoinClick because of the “time- and money wasting frustrations” they encountered when trying to spend marketing budgets in the past.

Not only can credit card payments suffer unacceptable delays – resulting in accounts being suspended and precious exposure being lost – but small businesses in some parts of the world have struggled to advertise on major websites because cards and platforms such as PayPal are not commonly used methods of payment.

“Reach massive audiences in minutes”

AdCoinClick says its objective is to allow cryptocurrency related products to be advertised transparently through digital campaigns – and it claims businesses will have the chance to connect with large numbers of crypto enthusiasts in a matter of minutes. Unlike other advertising platforms, there are no minimum budgets for campaigns, paving the way for start-ups to gain new customers and greater levels of brand awareness.

Its team, based in the Netherlands, claims that as much as 80 percent of advertising budgets spent on rival platforms are a “waste of money” because the campaigns are not precisely targeted. AdCoinClick says it avoids “spammy traffic that doesn’t convert into direct business” – instead offering “A-tier publishers” where ads about initial coin offerings and roadmaps will be seen by readers with a genuine interest in their message.

AdCoin says fees for using its new platform are “close to zero,” making it feasible for businesses to conduct micro transactions with niche publishers on a regular basis.

Publishers can decide whether they want to use their earnings to invest in cryptocurrency on an exchange or convert it into fiat currency. Alternatively, they could choose to use AdCoinClick to launch their own campaigns and drive traffic to their website or blog.

Plugins already launched

AdCoin says it is determined to speed up adoption of its cryptocurrency and platform, making it the standard for advertising payments, through plugins for a plethora of well-known eCommerce platforms and content management systems.

The company has already integrated a payment API into WooCommerce, a popular open-source eCommerce platform on WordPress. Once an AdCoin wallet has been created, it allows publishers and other businesses to accept payments in the cryptocurrency for both physical and digital products and services – with transactions completed in alternative currencies automatically converted. This is coupled with a “powerful dashboard” where a full record of payments is kept. A standalone solution for WordPress and Drupal which eliminates the need for “complex plugins” has also been launched.

In time, AdCoin plans to launch a WordPress advertising plugin that enables publishers to maximize revenues and sell space on demand, without having to contend with complex demands from other providers.

The company has created a web wallet which can be used on desktop and mobile devices. AdCoin wallets are automatically created and linked to a customer’s email address whenever the cryptocurrency is purchased which enables user to transfer AdCoin by using email addresses. Third-parties can develop tools based on the AdCoin Web Wallet by using their API with an integrated Paypal-like Payment Gateway.

Over the coming year, AdCoin is hoping to globally engage in business development and adding more integrations – paving the way for major networks to adopt microtransactions on its platform in 2019.

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

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Advertising On Social Media, Explained

Apparently the advertising sector on social media is huge. Is this true?

For ordinary users, social networks are a way to keep in touch with friends. But with 2.5 bln users worldwide, they have now become indispensable marketing tools.

It is estimated that $31 bln was spent on social media advertising worldwide in 2016 – almost doubling over a two-year period.

As newspapers close and TV dwindles in popularity, the likes of Facebook and Twitter are becoming the main destinations for advertisers to spend their cash.

Social media’s share of digital advertising is continually growing – rising from 23.2 percent in 2013 to 34.5 percent in 2017. However, the sector is dominated by search engines, where advertising is tailored to the keywords you type into Google.

Does advertising on social media actually work?

Research suggests that companies who advertise on social media do see public awareness grow – and their brands are often regarded more positively afterwards.

You may have noticed that ads can tend to follow you around – meaning searching for shoes on a retailer’s website suddenly means they’re in your Facebook News Feed.

Advertisers tend to like social media because it’s easier to reach certain people based on their age, gender, location and interests. As you’d imagine, it’s a lot harder to pull off targeted advertising on physical billboards. Not only are they more expensive, but campaigns end up grabbing the attention of the wrong demographics.

Through social media, advertisers can use metrics to see whether their desired audience are engaging with their campaigns. Not all of this is to say the system is perfect, though, as some ad formats are irritating and intrusive – redirecting you away from the website where you wanted to be.

So wait a minute… are they using my data?

Yes – in more ways than you think. Your level of education, ethnicity, whether you own a home, relationship status, birthday, job, political views, car, internet browser, investments and TV habits are just some of the types of data that can be used.

Awareness about how social media companies are using personal information has been heightened by the scandal surrounding Cambridge Analytica and Facebook. The political consulting firm harvested the data of at least 87 mln people after launching an app where hundreds of thousands of people were paid to take a personality test. Participants gave consent for their data to be collected – but the details of their friends were also harvested without their knowledge.

Facebook CEO Mark Zuckerberg faced questions in Congress about the controversy. He denied that the social network sells personal data to advertisers, but said: “What we allow is for advertisers to tell us who they want to reach, and then we do the placement.”

In 2017, the social network generated almost $40 bln in revenue from advertising – a 49 percent increase on the year before.

The drinks are on Facebook, then. Can Blockchain improve advertising?

Several Blockchain platforms are trying to challenge the dominance of big tech firms by giving users control of their data.

In the future, Blockchain could be used to allow you to decide which data you want to be stored about you online – and more importantly, who gets to see it.

If that information ends up being used by advertisers, it could be you who ends up getting a paycheck rather than tech giants such as Facebook and Google.

At the moment, personal data worth billions is being sold per year – but the public doesn’t see a penny of this.

This could have some unexpected, but positive side effects. Advertising could actually prove useful because companies would be working off accurate information. Plus, you could be able to use your own data to personalize apps in an instant.

I’ve heard of social media influencers – what’s their role in all of this?

Social media influencers are people who have a large following online. They might review beauty products on YouTube, post fitness advice on Instagram, or upload funny videos on Facebook.

Some influencers boast millions of fans – and for advertisers, they can be a valuable way of reaching new customers.

Brands are regularly hoping to get their products endorsed by these stars, or to get their items featured in a sponsored post. In some cases, these deals can be worth hundreds of thousands (even millions) of dollars.

There has been controversy over arrangements which have seen influencers speak positively about certain products in posts and videos without disclosing that they have been sponsored to do so. This can prove problematic when it comes to influencers who have a large, impressionable and young fan base.

So how do advertisers get influencers on board?

One common technique is to make sure they are a fan of a product already.

Influencers often talk about how much free stuff they get – and this is in part because brands want to be recognized by them. This method is especially popular when it comes to so-called “micro influencers” – niche talent with a modest following who enjoy high engagement rates.

One challenge can be making sure that an endorsement campaign has a lasting impact on viewers and followers. A single, discreet mention of a product isn’t always going to cut it – and that’s why many campaigns require multiple posts and multiple mentions of a product to succeed.

The cost of this form of social media marketing is often hugely inflated because of the fees taken by agents and social networks.

Can Blockchain make it easier for advertisers and influencers to collaborate?

Certain platforms are hoping to boost the earnings of influencers, while simplifying the steps advertisers need to take to get them on board.

Decentralized platforms such as Patron plan to use smart contracts to make the relationship between customers and creators fairer and more transparent.

Such systems could make it possible for advertisers to pay influencers for a single post, or to hire them exclusively for a period of weeks or months.

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

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Blockchain-based Ad Service Revolution: Crypto Answer to Social Media Bans

Widespread bans of initial coin offering (ICO) and cryptocurrency adverts on major social media platforms and search engines could provide the opportunity for a Blockchain-based advertising service revolution.

In June 2018, Google’s ad service will stop serving any advertising content relating to cryptocurrencies or ICOs. The move has massive ramifications in that all cryptocurrency businesses will be denied access to the biggest advertising platform in the world.

Similar bans from Facebook, Twitter and a number of other mainstream social media platforms has made matters worse, limiting the ability for these businesses to reach a massive base of potential users.

There is a silver lining to these bans, as a group of big companies have been developing Blockchain-based platforms that have the potential to fill the void.

They could also solve long-term problems that have tormented the digital advertising space, namely privacy invasions, bots, inefficiencies in campaign assessments as well as ad-blockers.

Digital advertising – by the numbers

According to the Interactive Advertising Bureau (IAB), digital advertising revenues in the US totalled $40.1 bln in their 2017 half-year internet advertising revenue survey conducted by PwC – with a an estimate of $85 bln in revenue for the full 2017 calendar year.

Just to show how much of a stranglehold Facebook and Google have on the digital advertising space, AdAge cited a report from Pivotal Research that estimated the two giants totalled 73 percent of all US digital advertising revenue in the first half of 2017.

US DIGITAL ADVERTISING IN NUMBERS

Calls for accurate digital advertising metrics

Of great concern is the return of investment of digital advertising campaigns, and the exposure brands are getting from digital campaigns.

This was highlighted in 2017, as the likes of Procter & Gamble, Bank of America and Unilever called for greater transparency from digital advertising agencies. As reported by AdWeek, these multinational companies threatened to cut billions of dollars of spending if advertising agencies didn’t address issues of fraud and transparency.

According to Procter & Gamble’s chief brand officer Marc Pritchard, a large portion of advertising budgets are wasted due to a number of factors, as quoted by Adweek:

“Frankly, there’s, we believe, at least 20 to 30 percent of waste in the media supply chain because of lack of viewability, non-transparent contracts, non-transparent measurement of inputs, fraud and now even your ads showing up in unsafe places.”

Going on the IAB’s $85 bln forecast of advertising revenue in 2017, up to $17 bln could be wasted by the concerns highlighted by Pritchard.

Considering that Procter & Gamble have a $2.4 bln advertising budget, their concerns about industry practices cannot go unnoticed.

England’s House of Lords Communications Industry has also highlighted these concerns. As Marketing Tech News reports, committee chairman Lord Gilbert of Panteg, said the industry is struggling to deal with a number of dysfunctions.

“The market for delivering digital advertising to consumers is notoriously ‘murky’: businesses which buy advertising services don’t know how their money is being spent, whether their advertising is being displayed next to content which is obscene or which supports terrorism, or whether their ads are being viewed by a human being at all.”

While conventional digital advertising networks look to overhaul their processes, Blockchain technology is being used to answer some of these problems already.

Streamlined, transparent advertising networks

IT giant IBM and online media platform Salon have partnered with Adledger to pilot a Blockchain proof-of-concept called “The Campaign Reconciliation Project” (CRP).

Adledger is a non-profit research consortium developing a variety of Blockchain based solutions for the advertising industry. A number of companies form the consortium, which hopes to solve a number of problems plaguing the industry.

A major concern for the advertising industry is how companies can accurately assess the true value for money out of an advertising campaign, according to a blog post by Automate Ads CEO Andrew Torba on Huffpost.

This is in essence what the CRP will do, by recording data from contractual conditions to publisher payments – all on an immutable, auditable blockchain system.

According to PRWeb, the project addresses “long cycle times, manual reporting and discrepancies that are the norm for today’s reconciliation process across what has become a complex advertising network.”

Of utmost concern is an apparent divide between money spent on campaigns and the value a business receives. Part of the problem is the amount of money that is seemingly wasted through the process of digital advertising

IBM’s global solutions head Chad Andrews wrote a column in which he said that almost half of every dollar spent by advertisers is lost in the digital advertising supply chain. Whether its due to fraud, or costs of intermediary services, advertisers aren’t getting the full bang for their buck.

Salon sees value in the project’s ability to provide auditable data on campaigns published on their website. Ryan Nathanson, Salon Media’s chief operating officer, said the Blockchain platform solves many inefficiencies of current digital advertising networks:

“The shared ledger on the Blockchain will act as a single source of truth creating indisputable transparency for both the brand itself and the publisher, which will aid in greater accuracy during reconciliation as well as make advertiser spend much more efficient.”

A ‘brave’ new world

Another big industry player, the Dow Jones Media Group (DJMG), is also exploring the possibilities of a Blockchain-based advertising solution for its content brands.

DJMG have partnered with Brave Software to provide a platform that will serve advertising to websites providing premium content. Brave, which was developed by Javascript creator and former Mozilla CEO Brenden Eich, raised $35 mln in 30 seconds in its ICO launch in June last year.

The agreement would see Brave provide premium content from DJMG to a select few users that download the Brave browser. These content providers will become members of Brave’s Basic Access Token (BAT) platform, which awards users BAT for interacting with advertising served on the browser.

Eich’s Brave platform endeavours to rewrite the status quo of current digital marketing systems:

“We’re trying to reconnect the funding that comes in gross payments after the fact from advertisers and gets chopped down by a bunch of middle players — notably Google — and the remnants are given to publishers,”

Forward thinking

These Blockchain projects address these pressing concerns within the digital advertising space with innovative ideas harnessing all the benefits of distributed ledger technology.

With the ability to write in contractual obligations and parameters, advertisers know where and when their adverts will be published and will be able to track that with the transparency provided by Blockchain technology.

As IBM’s Andrews explains, the success of these projects will depend on various players in the digital advertising industry accepting a new age solution to these pressing concerns:

“With a Blockchain backed peer-to-peer network, achieving transparency in the digital advertising supply chain is possible. But, ensuring its success will require the entire industry, including advertisers, ad tech providers, publishers and agencies to coalesce around a shared, auditable version of truth.”

Unilever is currently developing its own blockchain project to address some of these issues, with the help of marketing service provider IBMiX.

IBMiX global marketing executive partner Babs Rangaiah told that Unilever will start with campaign reconciliation of marketing campaigns – which became blurred due to current supply chains:

“One of the things that happens when you have so many middlemen is discrepancies become rampant. And so you typically can’t reconcile that until the end of a flight, and by then it’s a mess. What Blockchain does is allow you a single, unified view of how that media buy occurred, and there’s one number.”

Given that some many big industry players are calling the advertising industry to clean up its processes, the use of Blockchain technology could well become an important part of this process.

Whether it’s startups, or multinational corporations, the quest for honest, value for money from digital advertising will require a shift in thinking and processes that could be answered by Blockchain technology.

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Snoop Dogg To Promote Ripple At Invite-Only Event In NYC

Ripple is hosting a VIP gathering, dubbed “XRP Community Night,” in NYC on May 15, with a performance by Snoop Dog, the company announced Tuesday, April 24.

The event is “invite-only,” but two Twitter contests will run in which participants can vie for ten tickets: “Twitter Trivia” and “Make the Meme,” on April 26 and May 2 respectively.

Ripple says the “special night” is to thank those who are helping the company to develop the XRP Ledger and xRapid platform, as well as all those who are “spreading the good word about Ripple’s many benefits.”

Social media was predictably split between fans and skeptics, but one Twitter user rode the wave with good-natured indifference:

This is hardly showbiz’s first foray into the crypto sphere, with singer Lionel Richie recently appearing in a Super Bowl television ad promoting Bitcoin Futures, former Liverpool soccer star Michael Owen launching his own token, and heiress and reality TV star Paris Hilton endorsing ICO LydianCoin last year.

There are concerns, however, about potential investors being lured in by celebrity endorsement. The US Securities and Exchange Commission (SEC) busted a high-profile ICO scam earlier this month, which was backed by boxing champion Floyd Mayweather and DJ Khaled. In November, the SEC raised wider concerns that ICO endorsement by celebrities could in certain cases be illegal.

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Facebook, Google and Twitter Ban Ads, But Do Their Founders Really Dislike Crypto?

Social media platforms have recently banned advertising for cryptocurrencies and ICOs, but that stance is contradictory to the thoughts of their directors.

In January, the social network giant Facebook outlawed cryptocurrency related advertising in an effort to protect users from various ICO scams, fraudulent token sales, Ponzi schemes and the likes.

It has set a precedent that is now being followed by other platforms and service – but this disparaging move is at odds with the sentiments of the heads of these businesses.

The people responsible for the creation of social media platforms like Facebook and Twitter have been singing praises for cryptocurrencies and their underlying Blockchain technology.

It creates a bit of a juxtaposition, as the companies they are responsible have enforced sanctions that potentially stifle the adoption and development of Blockchain.

In order to unpack this disconnect, let’s take a look at what the likes of Facebook co-founder Mark Zuckerberg and Twitter CEO Jack Dorsey think about the developing technology.

Facebook and Instagram

At the beginning of 2018, Facebook co-founder Mark Zuckerberg made some positive comments about cryptocurrencies in a post on Facebook. He focused on the potential benefits they have for businesses like Facebook, as well as the power they hand back to people.

He honed in on an issue that is becoming increasingly talked about – centralization versus decentralization. As CNBC reported, Facebook was in the spotlight for a number of negative issues mainly related to its ad-services and their capabilities.

“There are important counter-trends to this, like encryption and cryptocurrency, that take power from centralized systems and put it back into people’s hands. I’m interested to go deeper and study the positive and negative aspects of these technologies, and how best to use them in our services.”

No more than two weeks later, Facebook announced that it would prohibit cryptocurrency related advertising on the platform, which was met with varying reactions from the wider cryptocurrency community.

Fast forward three months and Facebook was embroiled in one of the biggest scandals since its inception. In essence, the platform supplied personal data from over 50 bln users to political consulting firm Cambridge Analytica.

Zuckerberg took to Facebook to admit the company had made ‘mistakes’ while outlining what had led to Cambridge Analytica access to data from Facebook users. He has since taken out adverts in British newspapers to make a public apology, while Facebook has been hit with a swathe of lawsuits.

In an interview with CNN last week, Zuckerberg even suggested that Facebook could benefit from regulation – an issue that is hanging heavily over cryptocurrencies and ICOs this year:

“I’m actually not sure we shouldn’t be regulated. In general, technology is an increasingly important trend in the world and I actually think the question should be ‘what is the right regulation rather than ‘yes or no, should it be regulated.”

“On the basic side, there are things like ads transparency regulation that I would love to see. If you look at how much regulation there is around advertising on TV and in print, it’s just not clear why there should be less on the internet, you should have the same level of transparency required.”

Meanwhile one of the primary attributes of Bitcoin and other cryptocurrencies is the ability to encrypt data giving anonymity and privacy to users.

Facebook’s move to ban cryptocurrency related advertising also applied to partner platforms Instagram and its advertising platform Audience Network.

Twitter CEO beams on Bitcoin

While Zuckerberg battles with Facebook’s ongoing woes, Twitter CEO Jack Dorsey has been waxing lyrical on Bitcoin of late.

In an interview with the Sunday Times issued on March 21, the Twitter and Square CEO forecast that Bitcoin could one day become the single global currency in ten years time.

“The world ultimately will have a single currency. The Internet will have a single currency. I personally believe that it will be Bitcoin, probably over ten years, but it could go faster.”

Having personally invested in Bitcoin, Dorsey is a staunch advocate for the virtual currency. He’s also the CEO of point-of-sale software startup Square, which would soon integrate a Bitcoin buy/sell functionality.

Furthermore, Dorsey also invested in Lightning Labs, which has seeded $2.5 mln to spearhead the development of the Lightning Network which promises to provide free and fast Bitcoin transactions.

While Dorsey is bullish on Bitcoin, he reiterated that startup companies like Lightning Labs hold the key to further adoption around the world:

“It’s slow and it’s costly, but as more and more people have it, those things go away. There are newer technologies that build off of Blockchain and make it more approachable.”

What is disconcerting is that Twitter is the latest social media platform to ban cryptocurrency advertising.

Murmurs of an impending ban last week were confirmed on March 27. Twitter will begin cutting out advertising of initial coin offerings and their token sales as well as global cryptocurrency wallet platforms if they are not publicly listed on select stock exchanges.

Once again, there is a clear disconnect between the thoughts and views of its leadership and the plans of the business itself.

Twitter has followed in the footsteps of Facebook. The social media platforms are trying to protect users from fraudulent companies and scams, which have taken advantage of many through advertising campaigns on social media networks.

However, that has painted everyone with the same brush. In essence, innovative startups with ingenious business plans have been stifled due to the actions of fraudsters and scam artists looking to ride the Blockchain and cryptocurrency wave.

An infamous example was John McAfee’s Twitter account being hacked and used to promote some obscure virtual currency tokens.

Furthermore, Twitter, in particular, has been rife with accounts impersonating well-known cryptocurrency advocators and accounts, which has caught unsuspecting users out.

Google to follow suit

The world’s biggest search engine, Google, is following in the footsteps of its social media cousins.

As reported in March, Google’s updated financial services policy will rule out all related cryptocurrency advertising through its AdWords service from June 2018. Once again, consumer protection is touted as the main driving factor behind the move.

There is an air of irony to Google’s move. While cryptocurrency adverts will come to an end, Google could actually be stifling the growth of companies it has invested in that directly use cryptocurrencies.

Companies like Blockchain based cloud storage Storj and payment platform Veem, which Google has backed financially, will in essence be unable to advertise on the search engine once the ban comes into effect.

The move to ban crypto advertising comes less than a year after Google’s parent company Alphabet invested in London-based online wallet Blockchain.info. It also remains to be seen how this service will be able to advertise on the search engine come June 2018.

At the time, Alphabet partner Tom Hulme said their investment in the company, which raised over $70 mln in overall funding, was essential because “the pace of innovation in the digital currency space is unmatched,” as quoted by Fortune.

And yet cryptocurrency wallet providers and promising ICOs will no longer have access to the world’s biggest search engine in two months time.

Other platforms

Snapchat is another massive social media platform to make a move against cryptocurrency advertising. They’ve instituted a similar ban on Facebook and Twitter, but have only prohibited adverts for initial coin offerings.

Ironically pioneering Snapchat investor, Jeremy Liew was bullish on Bitcoin and had some lofty price predictions for the preeminent cryptocurrency last year.

China has taken a hard stance against cryptocurrencies from a governmental level and that has filtered down to internet based companies in the country. In September 2017, the country ordered that all cryptocurrency exchanges must close down.

As reported by Recode, the likes of Alibaba and Tencent haven’t allowed this cryptocurrency related advertising for far longer. Meanwhile, the South China Morning Post revealed that it seems search engine Baidu is not returning adverts for any cryptocurrency related searches – only news articles and posts.

Russian search engine Yandex is also expected to follow suit – according to local media reports.

Where to from here?

This is a question that may not be answered for months. The whole world seems to be waiting for clear regulatory guidelines on cryptocurrencies and ICOs.

While the likes of the SEC pioneer this space, we may see continued apathy towards the promotion of ICOs and cryptocurrency tokens sales on most online platforms for some time.

Until there are firm guidelines in place that protect the majority of users from ICO scams and misleading investment opportunities, these extreme sanctions are likely to remain in effect.