Behavior-Based Advertising as a Service

Advertisers know all too well the inner workings of a pay-per-click advertising model prevalent in Google AdWords. In AdWords, the ad’s click-through rate determines its quality score which determines how frequently it's seen and how much it costs. The higher the score the more it's seen and the lower the cost-per-click.

On its face, the model seems ideal. What advertiser doesn’t want cheaper ads? But are cheaper ads the goal? What happens if the clicks are empty? Viewers may indeed be clicking on an ad, but if there is no further interaction between the viewer and the brand what benefit is the ad providing? Shouldn’t an advertising system with a quality score be based on quality and not clicks? We think it should. That’s why we created an advertising system that elevates quality and incentivizes engagement from all parties.

Like any industry, the advertising industry is experiencing growing pains as technological advancements move at breakneck speeds and businesses are trying to keep up. As a blockchain capabilities company, Dragonchain understands these challenges and builds systems that can make it easier for businesses to use blockchain as a tool to achieve their goals.

Dragonchain believes that any sufficiently targeted advertisement is seen as quality content by its viewers. When the right ads are put in front of the right people at the right time and in the right place, they are seen by viewers as content and as such are more likely to get the desired engagement.

The goal should be to create a content-based delivery system where the consumer actually wants to see the ad content.

Current advertising models don't address one of the core goals of advertising, which is ultimately engagement. Today, we're challenging advertisers to think differently about how they advertise.

Targeted Advertising

An advertiser will typically use targeted advertising as a way to associate specific traits, interests, and shopping behaviors to consumers. The term targeted tends to convey a negative feeling from consumers who are growing increasingly frustrated with how their personal data is obtained.

There is nothing inherently wrong with targeting specific consumers. No cat lover wants to see an ad for dog treats. Likewise, an advertiser does not want to spend resources on ad content the consumer doesn't want to see and will not engage with.

Targeted advertising should present content to a community that wants to see that content instead of relying on artificial intelligence and algorithms to curate that based on the personal data of users.

Contextual Advertising

The use of contextual advertising is when an ad is placed alongside other content that is related to the product or service being advertised. On its face, it seems like a good idea to associate the ad being seen with what is happening on the screen at the time. But in practice, this is what gives us endless pop-ups and shrinks our content viewing screen.

Advertisers are making strides to limit the negative feeling from these pop-ups by employing a technique called native advertising. Native advertising is paid content that blends into a publication. Although these ads look better on the page they still compete with the consumer's viewing experience and cause confusion and annoyance for the targeted audience.

Contextual and native advertising shouldn’t run alongside content but instead, be encapsulated into the content itself.

Behavioral Targeting

Behavioral targeting “considers user behavior and browsing activity when positioning ads”. This invasive targeting practice tracks consumer behavior, clicks, purchases, and social media following, most of which doesn’t even matter to the product or service being advertised.

Dragonchain takes a completely different approach to behavior-based ads.

Behavior Systems for Advertisers

At its core, an ad is meant to elicit a specific behavior out of its viewers. It doesn't matter what that behavior is. It could be anything from reading this to buying that. When advertisers employ a pay-per-click model, clicking becomes the behavior. If the focus is on clicks, it degrades the viewing experience and limits the potential for engagement. The placement of these ads has further negative effects on the brand and the platform as they become the source of frustrating viewing experiences. This is not the behavior the brand desires.

According to experts in behavioral science, people often change a certain behavior that they wouldn’t otherwise if the result exposes them to an ongoing external positive reward. Dragonchain’s behavior system motivates people to perform desired behaviors and rewards them for doing so.

Dragonchain’s behavior-based advertising model arranges specific behaviors in a way that incentivizes advertisers to create better ads that not only perform better with consumers but actually cost less with a return of a portion of their advertising budget for high-performing ads. The model further incentivizes consumers to view and engage with ad content beyond just the click, giving them the ability to view the content they actually want to see.

Users can be incentivized to provide demographic information without exposing sensitive personal identifying information using a decentralized identity system. This can also provide better assurance of authentic engagement with real people.

The entire process is less intrusive and fosters more engagement creating a more organic viewing experience for the ad viewer, is cheaper for the advertiser, and is better for the platform itself because it keeps everyone coming back.

Additionally, a behavior-based advertising model can address issues with stale ads. Advertisers can use real-time metrics to monitor the performance of specific ads. When metrics indicate less engagement with ad content, advertisers can rotate the waning ad for newer, fresher ad content.

See it in action!

Dragonchain spin-off,, employs a behavior-based advertising model as a reference implementation. Den is a community forum and content management system that aims to elevate the best content quickly. Dragonchain’s behavior system is used to curate content and users are incentivized to perform certain behaviors the platform and individual communities desire. For instance, the platform rewards Denizens for creating and curating quality content as well as performing certain actions such as content tagging and moderation.

Individual communities called Lairs provide an environment where advertisers can tap into an already established set of people who likely align with their message. This intimate form of native and content-based advertising fosters a stronger relationship between the brand and the community and in turn, the brand can better serve its audience.

The platform is designed to incentivize the advertiser to provide better content for the community and simultaneously incentivize the community to engage and share those ads with colleagues and friends across all social media platforms.

Content is King

The focus is solely on the content. If the content is well-received, the community will upvote the post where it will remain visible and more likely to have engagement. On the other hand, if the content is not well-placed the community can downvote the post and it will quickly drop from view.

Multiple Ways to Advertise

In an effort to create the content the community wants, brands can use ambassadors or micro-influencers. These individuals can be employed by the brand itself, or the natural incentivization of can reward them for posting engaging quality content which can become ads.

If a brand wants more out of their experience they can even have their own branded Lair community. This option gives the brand full control of the rules and guidelines associated with their Lair. Here they can build and engage a thriving community awarding top supporters and contributors. The Lair will also serve as an additional way to reach new audiences without directly targeting them with intrusive and expensive ads.

To get more reach the advertiser can boost their ads for more engagement. They can choose to elevate content internally within a specific community and/or reward the community for externally sharing to other platforms. Proportions of rewards assigned to internal and external boosting are completely customizable by the brand per advertisement.

The better the ad does the less it will cost the advertiser.

Advertisers who boost ad content will have a portion of their ad spend (up to 85%) returned to their account for future ad spending or withdrawal if their content is well received by the community. The better the ad does the less it will cost the advertiser. The model is the opposite of Google where the better performing ads will typically run more resulting in increased costs for the advertisers as they are charged each time the ad runs.

Coming soon brands will be able to use Den’s Governance as a Service model to poll their community about issues that affect them, the brand, the products, and the services the brand provides.

Applying our behavior-based advertising model will refocus advertising practices to provide quality ad content increasing overall engagement bringing brands and consumers together in a more organic way. Contact us to learn how you can apply our model to your advertising campaign today.