Digital advertising is tiring. In a world ruled by interruptive marketing, we live our lives in a constant state of ad fatigue, and many of us are now de facto pros at avoiding ads. We have the “skip ad” location memorized on Youtube, we employ ad blockers, we say no to cookie gathering, and we avoid sites that abuse them — opting for less intrusive experiences.
First party data and consumer behavior targeting are far from perfect, but even when a DSP does serve up the ideal ad to a consumer (and by ideal we mean exactly relevant to someone’s interests and buying potential), it’s still an interruption, and the consumer isn’t rewarded for their engagement or for the data they provided that gave the business the ability to target them in the first place.
Targeting is getting more difficult for advertisers, too. GDPR made collecting data without consent more difficult for brands, and this means more shotgun marketing and less specificity, resulting in worse experiences for both brands and consumers.
But advertising can’t go away — businesses need it. Good companies with great products need a way to share their value with the world, and consumers want a way to hear about products and services that may improve their lives.
So what’s the solution? How can advertising improve?
One answer is through opt-in, value-exchange marketing.
What Is Opt-In, Value-Exchange Marketing?
At its essence, opt-in value exchange marketing is about brands giving people something useful in return for their time and data.
Instead of interrupting peoples’ experiences, brands build their ads into the experience someone is already having. This lets users engage with a brand in return for something relevant.
For example, let’s say someone was obsessed with classical music, and a streaming service offers 30 minutes of unlimited listening for every 1-minute ad break. Now, let’s say this person really wanted to listen to a Steve Reich piece that was fifty minutes in length, and he is prompted with a suggestion from the streaming service to opt-in to an interactive, five-minute-long experience with a relevant brand of their choice in return for 3 hours of free listening.
Perhaps this listener is using cheap Apple headphones but has always been curious about improving their listening experience, and they choose to engage with Bose. Bose can take this time to explain why noise-canceling headphones offer the best experience for listening to classical music, bar none.
This is opt-in, value-exchange marketing in action. The user opts-in to interact with relevant brands in return for getting something they already care about. This promotes goodwill between the brand and consumer and dramatically improves engagement and ad retention rates.
In these opt-in, value-exchange models, the publisher, not the brand, owns the transaction of the rewards. In other words, it’s up to the streaming service to give the listener free minutes. Not the brand.
Is Exchange Marketing the Same as Opt-In Marketing?
If you include value-exchange as part of your opt-in marketing definition, then yes.
Opt-in marketing without a value exchange is already very popular in modern marketing circles. Including a relevant value-exchange is what makes exchange marketing different.
Value-exchange ads are also known as:
- Opt-in ads
- Rewarded ads
- Exchange ads
The bottom line: If an ad is built into a user’s experience, offers something in return, and is entirely opt-in, then it’s an opt-in value-exchange ad.
Value-Exchange Advertising Is Often Misunderstood
Value-exchange advertising is often misunderstood as solely opt-in marketing. Here’s how to think about it. It’s:
- An ad system powered by consumer choice.
- A way to give consumers something relevant to the experience they’re already having.
- Entirely opt-in.
- Made possible by letting the publishers handle the engagement reward.
Gamification is king in value-exchange marketing, but as more and more systems develop, that will change. Below is an example of a value-exchange ad. Notice how the reward is directly related to their experience. That’s the key.
Exchange ads are also described as a premium ad type by some sources, but it should not be viewed as inaccessible.
What Opt-In, Value-Exchange Advertising Isn’t
Just permission marketing.
You can think of value-exchange marketing as a component under the umbrella of permission marketing. By design, users have to give permission to brands to engage with them. It’s a transparent transaction between a consumer and a brand — just like permission marketing, but opt-in value-exchange ads give something relevant back to the consumer.
Interruptive ads with sign-ups.
Just because something includes a sign-up or gift on an ad does not mean it’s a value-exchange ad. Opt-in, value-exchange ads are not interruptive.
Directly giving people cash for watching an ad.
This isn’t just handing people cash, but there are some fascinating cryptocurrencies currently in development that aim to compensate users in return for their engagement with brands. This would be the technical equivalent of permission marketing and hand complete control of data back to consumers while naturally filtering out bad faith businesses.
While opt-in, value-exchange advertising certainly shares a lot of similarities with inbound, it’s an evolved version. In inbound, brands create content to ask for information; in opt-in value-exchange, consumers ask brands to engage in return for a reward.
Why Opt-In, Value-Exchange Ads Are the Future of Advertising
Simply put, it’s a better experience for both brands and consumers. When an advancement in technology or strategy offers benefits to both players in a market, the innovation will inevitably take hold.
Here are a few reasons why opt-in, value-exchange advertising is the future:
- Providing relevant value increases attention and engagement.
- Since the ad is opt-in, brands own that experience and aren’t competing with other distractions.
- Since a user is rewarded via a particular brand, an increase of goodwill occurs.
- Consumers are getting better and better at avoiding ads, with 60% of millennials using ad blockers.
- As the golden age of platform-dependent advertising diminishes, brands want more control over their ad experience.
- Brands want to keep users on their own platforms instead of relying on third-party platforms like Facebook and Google.
- Blockchain is enabling the transparency and engagement metrics necessary to create more effective and rewarding value systems.
- Existing ad platforms are increasingly oversaturated, which raises the costs for advertisers.
All of these reasons add up to create clear momentum for value-exchange marketing.
Examples and Ways to Start Using Value-Exchange Marketing Today
Exchange marketing has already taken off — most notably in mobile gaming, but you can find it across many industries including dating apps, games, music streaming platforms, and news sites.
Opt-in, value-exchange marketing is not industry-specific, and there are limitless ways to approach value-exchange advertising.
Here a few ideas to get you started.
A business could offer:
- More matches in a dating app
- More coins in a mobile game
- Additional articles for a news organization
- Access to members-only content across any website.
- Discounts on shopping sites
- Extended ad-free experiences on any site
- Access to exclusive products
- Social spotlight to users that engage
Other clever examples of value exchange marketing:
- A map installation where users can locate the nearest store to them and receive a discount to their email address.
- Giveaways in exchange for email addresses.
- Giveaways that reward repeat exposure with the brand. E.g. points for digging into available lessons or courses on an online education site.
- Teasing new episodes of a show in return for watching ads.
- Opting to watch multiple ads at first to have a commercial-free experience.
Any type of business can find a way to use value-exchange ads to create better ad experiences — they just have to take initiative.
3 Ways Businesses Can Immediately Start Using Value-Exchange Marketing
1. They can buy directly from the publisher.
Reach out to ideal publishers — especially those with existing examples of opt-in, value-exchange marketing, and start a conversation around opportunities to work together.
2. Programmatically, as through OPENRtb.
While you won’t have as much control over the unique experience, using exchange marketing in an automated bidding context is absolutely possible.
3. Through a blockchain ecosystem like Permission.io.
Building an app or service that uses engagement-based cryptocurrency is the most complete way to engage in value-exchange marketing. Every action a user takes with a brand rewards them, and brands have more control and opportunity to engage with consumers on a personal level than ever before.
Permission.io is building the first-ever value-exchange ecosystem — revolutionizing the internet as we know it.
Best Practices for Running Opt-In Value-Ads
Many of the best practices for value exchange ads share similarities with inbound and permission marketing. Here’s what you need to know if you’re running value-exchange ads:
1. Know where and how your ads are running so you can better match your offer.
As with all marketing, specificity reigns supreme. The more specific you can match your offer to the service you’re advertising on, the better. Whether that’s advertising gaming chairs to gamers or home kitchen equipment to online cooking magazine subscribers, the better you can fit into their experience, the better your results will be.
2. Go small and specific with desired demographics.
On a similar note, go hyper-specific with these campaigns — especially to start with. If you notice a campaign doing particularly well, you can test it on a bigger audience.
3. Keep it simple.
With interactive and value-exchange ads it can be tempting to offer too much or make them too interactive. Keep it snappy, and keep it simple. Get to your offer quickly and provide a clear next step.
4. Check your video specs across platforms and internet connection.
You may be able to stream 4k in your office, but that doesn’t mean all publishers and consumers will. Test what your experience will be like across mediums before launching a campaign.
5. Know your KPIs beforehand.
This is critical for anything you do in marketing, but they are especially important to keep in mind when testing a new type of ad. Keep track of your CPAs, your CPCs, and your tracked revenue for your value-exchange ads.
6. Set up specific tracking when you can.
Point users toward a specific landing page and cookie them accordingly — this way you know exactly how much revenue your exchange marketing ads bring in.
7. Test value-exchange ads for different parts of your funnel.
Experiment with both top-of-the-funnel and bottom-of-the-funnel value-exchange ads. For colder audiences, you could establish goodwill with an easy interactive and overview of your company, perhaps bidding for views over engagement. Then, you could build an interactive that ties to your service more directly.
For example, let’s say you were Stitch Fix, the popular clothing delivery service. Your ad could be a version of filling out their ideal style onboarding form, and the end of the ad could be a call to action to transfer that information into a customer profile.
8. Know what you’re being charged (cost per engagement vs. cost per view).
Cost per engagement is usually the right choice for new campaigns, but it depends on the structure of the funnel. For movies or other wide brands, they may be able to get more brand reach for cheaper with cost per view.
9. Don’t go overboard on your DSP / brand-safety exclusions.
If you use a DSP to experiment with value-exchange advertising, make sure you don’t lean too heavily into your safety exclusions. This can prevent you from reaching profitable audiences.
What’s Next for Opt-In Marketing
AR experiences and more interactive creatives.
Some advertisers will feel constricted from a technological standpoint with value-exchange ads. The best ads are custom at the moment, but we expect to see AR make an appearance and a slew of companies developing platforms that allow for simple ad creation and distribution.
More publishers will get on board and work to partner with brands on opt-in initiatives.
As value exchange marketing becomes popular, the partnership infrastructure will flourish. Instead of sounding like a novel idea, publishers will begin suggesting value-exchange marketing to brands.
Blockchain and value-based currencies will provide an avenue to build value-exchange marketplaces into native apps and software.
The way our internet today handles advertising is outdated and intrusive. Consumers are subject to unfair data practices and have no control over what they do with their information. As blockchain enables the transparency needed to create a cryptocurrency that rewards consumers for brand engagement, we will see entire ecosystems and marketplaces created around value-exchanged advertising.
Indeed, the Ad industries foremost research and standards organization, IAB (Interactive Advertising Bureau) refers to this new model, which sits at the heart of the benefits that blockchain can provide, as “a win for consumers and brands alike” (2).
Join Us as We Build the First-Ever Value-Exchange Marketing Ecosystem
Whether you’re a brand, a developer, or a user, we’re building a new data ecosystem that will compensate users for their data and fundamentally alter how the internet economy functions.