Last week, the marketing technology firm Social Reality (which will soon change its name to SRAX) launched the beta version of a blockchain system that promises to give consumers more control over their data. The BIG (blockchain identification graph) platform is among the latest entries in the crowded digital marketing space as advertisers and brands try to balance their needs with consumer concerns.
Companies use information about consumer behavior to target their campaigns more efficiently. But critics say the practice has compromised consumer privacy and that organizations that collect and sell data are unfairly profiting from their access to the information. “People are disconnected from their digital identity,” Kristoffer Nelson, the COO and a founding team member of Los Angeles-based SRAX, told ThirtyK in an interview.
Nelson, a marketing veteran, helped design the platform, which he says will give consumers “100 percent control” of their data. “The three principles in this project are choice, transparency and compensation,” Nelson said. “Let’s give consumers full awareness of what’s happening, let’s give them the ability to opt out of what doesn’t interest them.”
ThirtyK: What is the major misconception about digital marketing?
Nelson: People have an idea about data and targeting: “I go to Nordstrom.com and I’m seeing Nordstrom.” People understand that these are related but they don’t know how it works. People are disconnected from their digital identity.
“In the BIG platform, the consumer has 100 percent control. They can delete or opt out of data whenever they want.”
ThirtyK: What key issues does blockchain address?
Nelson: The three principles in this project are choice, transparency and compensation. Let’s give consumers full awareness of what’s happening. Let’s give them the ability to opt out of what doesn’t interest them. And there needs to be value exchange.
ThirtyK: What’s your end goal?
Nelson: How do we move consumers closer to a better, more engaged way of managing their identity and data.
ThirtyK: What does it mean to opt out of data?
Nelson: Consumers can opt out of specific data points [and] specific segments. They can opt out of brands. In the BIG platform, the consumer has 100 percent control. They can delete or opt out of data whenever they want.
ThirtyK: How does compensation work?
Nelson: In the BIG platform, we pay people for actions that create data. We pay in tokens, and we manage that on the blockchain. We pay for data upfront. A specific action like you giving us your birthday creates data. We’re using a tokenized system to manage that. Our token system represents rights to revenue generated from the platform. Fifty percent of the revenue goes to a trust. That trust is built by the amount of tokens we’ve issued. What we’re giving to people is payment for the value of their data. Over time, they can ultimately bring those tokens and exchange them for capital.
ThirtyK: Do BIGtokens translate into fiat currency at some point?
Nelson: That’s right.
Brands and Advertisers
ThirtyK: Who are your customers?
Nelson: Our customers are advertisers and marketers that pay us to buy media on their behalf. Those advertisers and marketers are brands and their ad agencies. We buy media coupled with data targeting. We’ve always been a consumer-focused marketing organization where we’re more concerned about the targeting of the individual than we are about the specific kind of media. To do that, we need data.
ThirtyK: Does your system relinquish all control of the data?
Nelson: The consumer is 100 percent in control. If the consumer wants to delete a data point, like their birth date, all the segments that are related are removed. Once a piece of data is deleted, it goes away from our system forever. We don’t store it. If consumers delete all their data, we delete them from our system.
ThirtyK: Will consumers want to be that involved in managing their accounts?
Nelson: The answer is no, and that’s why we’ve designed the system where a consumer can have choice and transparency. You can sign up for the BIG app, do the onboarding, integrate some key things like social networks, like [mobile phone] transactions, bank accounts and credit cards and location services and earn passively off of that without interacting often, or you can be very engaged. There will be people early on who are engaged at the beginning, some people who are low touch and some who land in the middle. We want to service all these populations.
ThirtyK: Are you concerned about competition from other blockchain projects or otherwise?
Nelson: There is some crowding when it comes to identity sovereignty and data ownership. We found the right balance between the consumer and commercial scale side. I focus on us and our execution.
ThirtyK: You are in beta mode. When do you expect to go live? How many companies are working with you in this beta mode?
Nelson: Our beta closes on Jan. 31, 2019. During the beta period we are not monetizing, and so we’re not working with advertisers. But we are working with lots of advertisers on our other data and media products. You need scale to begin monetizing an anonymized segment. Once we get that scale, which we expect next year, that will be when it goes live.
ThirtyK: How are you paying for the platform, and how many developers are working on the product?
Nelson: It’s self-funded. We’ve been working on it for a year and a half. Our organization has over 80 developers. This [platform] has a dedicated team, but I’m not going to say how many of our staff are working on it.