We discuss how the industrialisation of the Ad Tech ecosystem, and its layers of intermediation, has not only led to erosion of user privacy but also a poor web experience and how Brave’s Basic Attention Token incentivises a better outcome for publishers, users and brands.
Welcome to the Founders of Web 3 series by Outlier Ventures and me Your host Jamie Burke. Together we’re going to meet the entrepreneurs the backers and the leading policymakers that are shaping Web 3. Together we’re going to try to define what is Web 3, explore its nuances and understand the mission and purpose the drive founders. If you enjoy what you hear, please do subscribe, rate and share your feedback to help us reach as many people as possible with the important mission that is Web 3.
Brendan: Thanks for having me.
So you know, a lot of these innovations once out, could not be recalled the genie was out of the bottle. And tracking was done in the 90s. It was not widely understood how it worked, I think certainly not like the average users, the bulk of users, but you know, there were companies doing it. There were a lot of ads that were just banner ads, and they were like, takeover or sponsorship, they didn’t have any targeting capability. But as the tracking powers built up their their expertise with cookies and scripts, they started compiling dossiers on on people, I think the ad server that became double click, which Google bought in 2008, was started in the late 90s, early 2000. I forget the exact date. And it was called the dash server, I believe at first, and it was one of the early ones that I think did tracking. There were others. There are people who sort of mixed this up with advertising. They say advertising was the primal sin of the web because it conditioned people to expect free content. I take a different position. I think tracking was the problem. And if you have a pure sponsorship ad or an ad that’s getting you to contribute to a charity and nothing happens to you click on it. And if you change your mind and don’t fill out the form and donate money, nothing bad happens, then I think there’s nothing wrong with that kind of sponsorship ad or whatever you want to call it.
And over time, you know, with Google brain chrome out, it got harder to try to change the defaults to block tracking because sometimes he would break a site that had tied some inappropriate knowledge. So that if you blocked tracking the site malfunctions, if you blocked tracking in that blocks, ads, the site malfunctions. And so it was hard. I think for browsers that hadn’t done anything from the start to start doing things now. Apple Safari came out a year before Firefox one Oh, there was a earlier version of Firefox at the same time, but we didn’t do one oh till November 2004. And 2003. Safari came out and it had a third party cookie blocker that kind of blocks those cookies set by those embedded elements like scripts and images that can track you. So Apple got it right from the start, relatively speaking. Now, they had a loophole in that cookie blocker in that if the domain trying to set the cookie as an embedded element, had already successfully set a cookie as a page you visited so called first party cookie, then it was allowed to track you. And so you know, the advertising companies, some of which you may never have heard of, such as app Nexus figured this out. And they would cleverly do things where if they got the chance to handle it. cliques and MCs were accidental. Or if they got the publisher for whom they were serving ads or delivering ads to arrange it, while clicking on the ad or otherwise interacting with the publisher might take you to App Nexus com as a full first party page very briefly. And that would set an app Nexus com cookie and Safari. And then thereafter they were whitelisted for tracking. And this is called a redirect bounce because of course, you didn’t want to go to App Nexus. So as soon as you landed there, and they set the cookie, they immediately redirect you back to wherever it was, you were supposed to be going. Whether it was another page on the first party, the publisher or it was the ad you clicked and you wanted to get to some full page ad unit, and that that loophole, once it was known, got exploited. So my friends at Apple came up with intelligent tracking prevention few years back, I forget when they started it, I think it was after we started Brave. But Brave also had benefit of, you know, some really great work in other extensions, I’ll call out you block origin, which is another one of these
Ad it could be somebody who’s trying to get an ad into a middle or bottom of the page slot, not a great ad and make some extra money for the New York Times. And it goes through the Google Ad Exchange. So that advertiser has to sign up with Google, but not necessarily with New York Times, generally not. And that that company is amazing. This has been diagrammed by some of the security researchers could be a fake, it could have fake LinkedIn profiles for executives, it could have fake address. It could be an address in I don’t know Ukraine or Russia or somewhere.
Most people don’t I think sometimes, you know, you can’t do it. And you know, there have been attempts to innovate around this by letting publishers declare exactly which third party ad vendors are allowed to place ads on their on their site, but that that got wrong foot in several ways. One again, you can sort of fake your way into the domain namespace. Now there is some of these so called trusted third parties were playing both sides against the middle, and the publishers didn’t take them out of this permission list so it went bad. So I hope I haven’t made your eyes glaze over. But this is really a baffling ordeal for anybody trying to make money and yet, it’s the main way the web is funded. And with Brave we wanted to get a better way going not just protect users from tracking which is their right, but let our users choose individually to give back. Something in lieu of the ad revenue that was being lost through through blocking tracking. Brave mainly blocks tracking, we don’t block ads, like on the Google search page. We don’t block Facebook feed ads by default, some of our users want this and we’re adding options for it, or Twitter feed ads, let’s say which generally are missing me. But they are part of the publishers content. And we neutralise or block their tracking, so we don’t take them out. We view the more like part of the first party content, we do block out so much tracking that almost all third party ads are blocked. And that’s why Brave gets such great speed wins battery savings, data plan savings.
But, you know, Brave, I think it’s the only one that lets you earn from private ads to give back because instead of Brave being a blind runtime for the ad tech superpowers, we want it to be the user’s agent. And if the user chooses, then the browser can study your data locally, all browsers see your data, they see your navigation history, that’s why you can clear it. You see, whatever cookies you do allow to be set and Brave blocks, third party cookies by default. They see in a browser, see your your clicks, they see your bookmarks, if you choose to bookmark, you see where you are scrolling on a page and what’s in view, and they see absolutely what’s in view with ads. There’s been a lot of cheating over the years about what’s that ad really visible or what covered by something, was it halfway up from the bottom of the page? You know, so called below the fold was somebody claiming that the ad was seen when it wasn’t? Was there a viewability or visibility fraud or mis measurement going on? Well, the browser ultimately has precise rendering model, maybe even pixel accurate depending on how it’s done. And so it knows exactly what’s going where and what’s in front of the capacity stack, semi capacity stack and sea otter stack. And so realising this with Brave we thought the option for us if we don’t turn it on by default should allow a local agent local machine learning nothing too heavyweight, that is all open source so you can speak to our experts can inspect the trust. To learn study from classify interest from your data feeds your history mainly and the clusters of words in documents you browse that have to be loaded by the browser and rendered as you know, in a font. So the browser is doing all this text handling. It’s fairly lightweight on the side to do some natural language processing and machine learning. And that’s what we do if you enable Brave rewards, which is the system we have for giving the user 70% of this private ad revenue, and it is private, because we don’t track you, there’s no server tracking your history. Instead, your browser is studying things, to derive a set of interests that might be hot or topical for you. And then match those, let’s call them keywords, or segment identifiers against the keywords in a catalogue of ads and offers and everybody in the same region. Everybody in the UK for instance, gets the same catalogue. If we get big enough, it will be everybody in you know, the Greater London area, or we can even get finer grain but it’s a large anonymity set and by taking that catalogue as a download, that can be downloaded, compressed and efficiently updated incrementally. You don’t identify yourself, everybody’s getting the same catalogue in the UK, and there’s no signal back to us who you are in taking it. It’s like downloading a Safe Browsing list, which is something we also offer With some extra anonymity VCP Google, and Google provides a Safe Browsing service to many browsers to prevent you from being fished or being deceived into going to a malware site through like a link in an email. So it’s similar to that anti phishing Safe Browsing list. And it’s, it’s a catalogue of ads and offers, it’s not the ads themselves, it’s links to various edge cached ads, we don’t run the edge caches the advertisers generally do. And we don’t consider the edge caches to be an adversary in this model threat model. So we’re not too worried about that we can’t really defend against network level attacks anyway. Though I mentioned something about that in a minute. So when you are opted into this Brave ads part of the reward system, the catalogues downloaded you know that if I buy that the machine learning studying your interest, you’ve been researching cars at a slow burn, it’s escalated, you’re now on certain car sites you’re honing in on certain European sports cars. Let’s say the local machine learning can pick the best offer from the catalogue about maybe an alternative brand you were considering, but you cooled on or maybe it’s the lead brand and gives you an extra choice offer you didn’t know about. And it floats on notification. We can put this not in any page, but in your attention space, your ad space, the user has promo rights to control notifications. In fact, some people don’t like them. So we’re looking at alternatives or in app versions. But if you opt into the system, the first call to action comes in a notification to you that’s not associated with any page you’re on. And it may be at the right time to you it’s not going to bug you if you’re typing away or mousing away. Wait, still, there’s signup, idleness. it respects you know, other apps and screensaver. But when you are ready, and you see that notification, you can click on it and just seeing it and the call to action, small amount of text and little image is worth something. But if you click on it, you’ll get a full tab with Brave shields up so it’s your again, protecting from tracking, even from the advertiser and that’s the landing page. You could think of these Brave ads, these user ads as detached search ads, it’s like there’s no search engine. You don’t have to go to Google. But you’re getting these little text ads like you find on the search engine result page from Google or Bing. But they’re floating separately from your pages in notification. And if you click on them, you get tabs. And the tabs can go to full, full page content, promoting the, whatever the brand is promoting, offer you a discount, you’re still not identified, you’re still shielded, but you can engage with the advertiser, this could become a long term engagement channel with the advertiser, if you like it, it could be a place to sign up and get a test drive and get a discount could be a cost per lead ad model, which is very high margin. And we will give the user 70% of the revenue using our own cryptographic token on aetherium.
The basic attention token. And that’s important because we block all the conventional ad tech, we’re not the blind slave of the ad tech companies as a browser. So by letting users opt in, we need something to replace all the payments traditionally done through, you know, banking relationships or invoicing, credit cards that the ad tech companies use to pass the revenue along from the gross revenue, the marketer puts in chipping away the fees as the intermediaries, the middlemen take their cuts, till whatever 3030 pence in the pound is left for the port Guardian, right? We’re giving it to the user because he’s ads are in the user space. But we’ve always talked about another option, we’re still working with key partners to do this. It’s not something we’re rushing into, because it requires great scale and a great partner. But we could do ads in Pages two, if the user and the publisher both consent. And in that model, we give the publisher 70%, much better than the 30% regarding God, and we give 15% to the user that model, even though it’s not launched, we fixed the revenue splits because we want this sort of transparency. We want the blockchain auditability at the end of the day, and we want the user to get a cut so the user gets at least what we get 1515 in this perspective publisher ad model, and so it’s always at least what we get going to the user 7030 on the user ads, and 70% to the whoever owns the ad slot. Those are the two principles 70% of the ad slot owner, and the user gets at least what we get. We tried to do this to align our interests with the users and tie a knot that prevents us from being you know, mistrusted or from ever going wrong without blowing ourselves up if the user realised that they were being underpaid, for instance, and having things settle on the blockchain helps with auditing, there are anonymity problems I won’t get into here, but blockchains typically are public so you can see everything. So that’s not you don’t want to do micro transactions on the blockchain that also get costly. But again, having a browser helps you can buffer and you can use zero knowledge proofs or blind signatures various cryptographic protocols to ensure anonymity and prevent likability of events and user IDs.
So again, great doesn’t see you. But we know from the catalogue matching through the browser software running on your device that we have a good match. And then when you look at the ad, we can, we can send one of these cryptographic proofs to a server that doesn’t have any idea of the user identifier, the Internet Protocol address gets dropped by our edge cache partner fastly, and they can’t see inside the encrypted payload. And then we see the payload without the IP address, we can do the cryptographic protocol, verify the proof and count a view as from an actual user. But we don’t know which user we just know it was a real user and the user can get in return sort of in a receipt form, get the 70% of the revenue. This is what our white paper laid out is somewhat idealised form. We built it and as far as I know, it’s unique and we have I said, over 1.6 million monthly active wallets I think it might be higher now.
I think if people like brave users, for maximalists down to custodial account, if these users insist on their rights, then we will be in a better state.
Jamie: Brendan really appreciate your time, keep doing all the great work you are doing with Brave, I think it is the killer app at the moment. Looking forward to having you again at some point.