Interview with CryptoAds CEO and Founder Oleksii Vinogradov
May 15 starts the token presale of the CryptoAds platform. CryptoAds is a decentralized advertising platform built on the Ethereum blockchain. How can blockchain simplify the online advertising market, what do bank credit histories and the reputation of an online user have in common, and how can you avoid huge middleman markups when promoting services and products? Oleksii Vinogradov, Founder and President of CryptoAds, talks about these issues and more.
CV: You position your project as a “decentralized marketing and advertising platform built on Ethereum blockchain.” That’s a pretty broad definition. Can you explain what specifically CryptoAds is offering to users?
OV: We are offering transparent and secure solutions for posting advertising on a decentralized exchange for brands, digital advertisers, marketing firms, content publishing platforms, and media influencers.
CV: What kind of solutions?
OV: Our platform enables firms to post advertising products in a wide variety of multimedia formats on an unlimited number of platforms with good user traffic thanks to the use of AI and blockchain technologies. This could be native videos or in-app mobile ads, standard video clips, vertical and 360 video ads, and offer walls. Platforms will be able to share their audiences, content delivery methods and hosting opportunities directly with potential advertisers.
CV: According to the latest Ericsson Mobility Report, digital advertising this year will account for 44% (USD 269.85 billion) of the total global ad spend, and this figure will rise to 50% (USD 335.48 billion) by 2020. This is an extremely attractive and very competitive market. Do you have a plan on how to secure a footing on this market?
OV: Let me answer your question with another question. Do you know how much intermediaries can add to the initial cost of an advertising product while it makes its way from the advertiser to the end user?
CV: I can only make a guess. In food retail from 50% to 200%…
OV: Take it up a notch — up to 1,000%!
CV: Wow, that is pure greed!
OV: That’s the whole point. Blockchain can change this situation. Our clients can trade directly without the need for a centralized ad exchange, thereby reducing the number of intermediaries and, therefore, costs.
CV: Cutting costs and the number of intermediaries in business is one of the key objectives that can be resolved successfully by blockchain. But you are not the only player here and you won’t surprise competitors with just this.
OV: We’re not stopping there. We stand out from our competitors in the transparency of our processes and our guarantee by blockchain. The platform will compile the crypto history of each user and record it in the blockchain. Each of our clients will have their own rating. Whether it is good or bad will depend on the individual and their actions on the platform. In any case, the ratings and transaction terms will be spelled out in smart contracts, and this will help to resolve naturally the problem of online advertising fraud. For example, the advertiser will not be able to avoid paying consideration for the services provided, and the platform owner will not be able to delete or change any history.
CV: When you mentioned ratings, it immediately brought Uber to mind. Users initially gave reasonable driver ratings. However, in a couple of years, the service was suspected of exaggerating the numbers. Why do you believe that the evaluations of your users will not be biased? Who will control their objectivity and how?
OV: Let’s start by first distinguishing between user evaluations, which might naturally be skewed by any number of personal factors and even the user’s mood on that day, and the rating of an individual based on his actions on the platform, based on his transaction history.
CV: So, you are talking about a kind of work rating of the user indicative of the obligations implemented on the platform and not subjective valuations?
OV: That is absolutely correct.
CV: Understood. And how does the individual benefit from these ratings?
OV: Clients with the best ratings will be able to conclude contracts offering them a higher payment. If we see a significant volume of transactions and transfers and no instances of fraud, then the user automatically receives a more privileged status. The higher the individual’s status, the better the advertising offers that he can expect to receive in the future. The same holds true for advertisers: if their history looks suspicious, users with a high rating will be able to weed out their offers.
CV: How will this work in practice?
OV: Let’s assume that a major advertiser approaches our project and says that he or she does not want to pitch his ad to all of the existing seven million users, but instead wants to target only the 100,000 top users who have the highest trust ratings. All this will be governed by the smart contract: it determines a user’s rating, and the top-rated individuals receive an opportunity to earn money within this network. Or let’s take a look from the other side: the user is offered the products of an advertiser. He looks at its profile, see its low rating and says: “No, I have an excellent rating, and only want to receive ads from good, tried and tested advertisers.”
CV: Will the ratings of advertisers also be adjusted depending on their activity?
OV: Yes. If an advertiser has a low ad turnover or offers low levels of consideration, then his rating falls automatically. All relations will be governed by smart contracts, which will spell out the terms and conditions of cooperation and ratings.
CV: This sounds like a credit history bureau in the banking sector. If you ever deceive a bank, it is very difficult to receive a normal credit rating again.
OV: As a matter of fact, it is like that. It is very important that every transaction and rating is recorded in the blockchain. First, any artificial alteration to a rating is impossible. Second, we immediately see and analyze all the transactions and payments of the user tied to his gadgets. As a result, we end up with a transparent system for evaluating clients, while users will have an opportunity to improve their ratings in order to receive better advertising offers in the future. I believe that this provides a good incentive to dissuade platform users from engaging in potential fraud or other improper actions and behavior.
CV: Storing the histories of users and advertisers, their advertising transactions, and all contracts — is this the key function of blockchain in your project or does it have other functions as well?
OV: Blockchain helps resolve another important problem. It is often the case that, after launching content in the network, an advertiser does not know where this content ends up. The advertising application may be posted in the same networks with a fivefold difference in price: in one place they offer 10 cents per download, and somewhere else one dollar. Blockchain helps the advertiser understand where the offer was picked up most and which users should be disregarded, as the system retains the unique IDs of users in the application.
CV: How many advertisers and users do you have at present?
OV: We have approximately 100 contracts with advertisers. Nearly a third of them are very active and launch a variety of advertising campaigns in the system on a daily basis. There are approximately 7 million users on the platform, with about 100,000 using it on a regular basis every month.
CV: How do you intend to attract more users? What will you use to expand the audience?
OV: According to our forecasts, thanks to the token sale and distribution, the core of our permanent audience should already increase to 1.5 million users this year. We also expect the arrival of a large number of publishers after the release of the SDK (Software Development Kit — a set of software tools that expands the functionality of a program, game or suite of products and enables users to create their own programs, levels or add-ons — editor’s note). They will be able to integrate it in their own applications, offer to do the same for their subscribers and receive money for the advertising. In the near future, we also plan to add an online trading platform (marketplace) to enable users to buy game collectibles, subscriptions for services and various goods at a discount. This should also attract attention to the platform.
CV: Can you provide a breakdown of your audience by country?
OV: They are primarily from the USA and India — approximately 40% of the total. The rest come from Russia, the United Kingdom and the Middle East.
CV: You have 25 years of experience in business, have successfully launched and run numerous different projects. How did the idea of creating CryptoAds appear and when?
OV: It started back in 2011. We were working on several business projects and started CryptoAds as an extra option. The project took off rapidly and developed successfully. In 2013 we received additional contributions and engaged in the serious expansion of the business, and in 2015 decided to try our hand in blockchain. Over the next two years, we carefully examined how it all works, drafted the project concept, and finally launched the concept on the crypto market.
CV: How will your platform earn money?
OV: It will earn a percentage on the transactions that users perform to buy services. As new services appear, we will reduce this percentage. The percentage will also be differentiated: we plan to charge different commissions for different types of services.
CV: When will the presale of tokens and ICO be held?
OV: The presale of our tokens will start on May 15 and run until June 15. The ICO will start on June 16 and end on July 15.
CV: What goals have you set for the ICO?
OV: The number one objective is to expand the base of users interested in our system. And naturally we plan to collect funds for the further development and scaling of the project.
CV: What will this involve?
OV: Our minimum target is to double the number of advertisers and significantly improve their quality. We want to work with well-known global projects that offer significant ad volumes.
Our second objective is to reach agreements with more game studios, so that they will use our platform in their own system.
We also have another objective: to increase the number of users by 4–5 times — to 30 million people — and expand our interaction with them. Right now, they only use our potential for calls within our CallsFreeCalls project (a platform offering free international voice and text traffic services in exchange for the distribution of sponsorship offers — editor’s note), and this is a very narrow market. We will incentivize users to work more proactively with our application.
CV: How will you achieve this?
OV: We plan to significantly expand the number of services that can be acquired on the platform for tokens. When users have an opportunity to earn and spend any money profitably, they will be glad to make the most of this opportunity.