Attention Economy of Steemit

Exciting changes are coming to Steemit! At the recent Hackathon in Oslo, Steemit co-founder Ned Scott talked about how Steemit will pivot to take advantage of the time and attention of users to drive marketing opportunities which contribute to the overall value of Steem owners and rewards going to content authors, and curators.  

I think this is brilliant! 

Let’s be clear, this will mean advertising on Steemit. I know many will have heartache with that concept. Steemit began as a grass-roots blockchain social media site, in direct competition with the big advertising-driven platforms like Facebook, Twitter, Reddit, etc. No, @Ned and @Dan are not turning to the dark side. 

Hear me out. In the new model, as I understand it, ads would be allowed but it would require advertising clients to pay with Steem cryptocurrency. This will drive more use for Steem and increase the overall investment in the system. 

This investment would then be split three primary ways: 

1. Authors of the Blog which has the ad attached 
2. Curators who bring attention (upvote) to the Blog 
3. Split among Steem holders, by ‘burning it’ as part of the dividend to currency holders 

This is a great advancement for a number of reasons. First, allowing commercial parties to buy advertising space on Steemit blogs requires the purchase of Steem, the cryptocurrency. This will boost the value and meaningfulness of Steem. It infuses more money into the economy, which is at the heart of every currency. Second, the dividend model, which pays authors, curators, and Steem holders, will divert money back to the users of Steemit and holders of Steem. More rewards, represents a greater financial incentive to bring in more participants, into the community, thereby growing the overall value of the system. Such growth then attracts greater marketing and the cycle continues to feed itself. Brilliant. 

Ned proposed forming a non-profit corporation which would manage the advertising revenue to ensure the money is redirected back to the users and not to the pockets of corporations. There will likely be a percentage which is taxed to pay for the infrastructure and operating costs. But as a non-profit, the legal entity would work toward a zero-net gain, by returning money to the Steem community.   

https://youtu.be/aQQmaxbkiis?t=8m45s   

I imagine a non-intrusive, perhaps elegant, advertising banner at the bottom of Steemit posts. This area would be reserved for advertising.  

A process and tool to connect advertisers and authors must be developed and managed. A system to pair authors and advertisers must be flexible to accommodate tastes and optimized distribution. Authors may want to choose what kinds of ads can be on their blogs. Advertisers may want to filter the topics or authors where their ads will be presented. Then there is cost aspect. Some authors may be more valuable than others. Competition among advertisers may also be present which might be the foundation for a supply and demand auction activity to bring in fair prices. The non-profit should manage such tools, processes, and technology to maintain an easy, effective, and productive experience for everyone: advertiser, author, curators, and readers.

One of the most significant challenges will be, how to best quantify the consumption of ads. All advertisers and their clients demand metrics. They want to know as much as possible about the impact of their campaign. This will require Steemit to facilitate at a minimum the number of views and at the maximum a validation system which proves ads were read. This may be a combination of blog views, session time, ad-clicks, up-votes, re-postings (re-Steem), links, and aggregated data from viewers (reputation, followers, Steem Power, etc.). For privacy, I would expect this data to be handled off-blockchain, again by the non-profit.  

The structure of Steemit, which is founded on the Steem blockchain, may represent an advanced platform for better advertising. With ID verification, followers, and a reputation system already in place, Steemit can apply several different value-add algorithms. The value of someone with many followers and a high reputation system may be considered a much more valuable ad-viewer than a new account without much influence. Such mechanisms may be necessary to mitigate against Sybil attacks (attacker creates multiple accounts to gain an unfair advantage). These factors may also play into the ad cost determination.  

I expect this to be developed and rolled out slowly, to guarantee robustness. The developers recognize the great potential value, which both contributes to the value of Steemit and increases as the platform grows in popularity. It is time for Steemit to embrace the Attention Economy, for the benefit of all!