Online advertising has exploded into a $40bn industry, and unfortunately for many Internet users, this increase has come with the cost of often-annoying user experiences.
To be fair, online advertising has been a boon for the Internet and for content creators. The idea of a digital canvas for advertisers to reach consumers on was enticing in the 1990s at the dawn of the web, and it has enabled many media outlets to weather the transition from print to digital.
Given the size of the industry and many consumers’ distaste for invasive display ads, a number of entrepreneurs have started to look for ways to supplement or maybe even supersede revenues from traditional online advertising models using the power of bitcoin.
Still, they face a steep challenge. There is a compelling reason why most online media and content generators use display ads – they are arguably the best vehicle for monetization out there today.
This might not always be the only option going forward, though. Digital currencies have the potential to become a transaction method for the Internet due to their low fees and quick transaction times, and established bitcoin companies like Coinbase and Xapo are seeking to usher in this new future.
Exploring a new frontier
One of the earliest proponents of replacing traditional online advertising with bitcoin is William Waldon, the owner of astronomy-focused website Space Industry News.
Waldon removed all the display ads from his site in March, leaving his visitors with just one option for supporting the website: bitcoin donations.
The site has had a remarkably clean look as a result – and Waldon thinks his audience is the perfect group to experiment with for trying new things like bitcoin tipping to generate revenue.“My audience is smart and tech-savvy,” he said.
He hopes replacing his ads with bitcoin tipping could be viable in the long-term, by providing the right message to the consumers of his content. “I believe that in the short term I’ll be taking a hit, until the message is made clear.”
Waldon is fine with that, as long as he can influence others by setting a good example:
“I mean, who wants to watch a 30-second video ad while they’re trying to read an article? The first time I saw one of those on another website I promised myself that I would never be that kind of content provider.”
Waldon said he has generated around $100-worth of bitcoin each month since he started his effort back in March – enough to pay for site hosting.
It’s an experiment for Waldon, a way to set an example for a future where tipping could become normal practice. “If you really want to change the world, I mean really make people think, you have to get rid of the distractions and focus on the most important part, the content,” he said.
The rise of a tipping economy
The practice of sending bitcoin tips to show support for content providers like Space Industry News has been gaining momentum in the cryptocurrency community, especially in the past few weeks.
One company, ChangeTip, works specifically with bitcoin in its strategy to bring online tipping to the mainstream as an alternative to traditional advertising models and revenue streams.
ChangeTip currently enables bitcoin tipping directly on social media sites like Twitter, Reddit, GitHub, Google+, Tumblr and StockTwits.
ChangeTip explains how its tipping mechanism works. Source: TwitterOne interesting feature with ChangeTip is that the company has built ‘monikers’ into its platform. This means users can edit their settings and fix a keyword to specified amount of money.
For example, a ‘coffee’ could be set as $1.50 in bitcoin, and a ‘beer’ as $3.50. People can send any of these monikers to others in the form of a tip.
Nick Sullivan, CEO of ChangeTip, told CoinDesk this could open up a totally new field of online marketing with bitcoin tipping:
“We think that has some potential brand or advertising applications. For example, Starbucks buys the ‘Starbucks’ moniker from us, and then we create an advertising package around that to help them come together with a viral marketing campaign.”
ChangeTip launched earlier this year, and Sullivan said the company is already seeing growth.
A key draw for companies like ChangeTip and its dogecoin-focused counterpart Dogetipbot is that they have the potential to appeal to users outside of the cryptocurrency community.
Sullivan said that he and Dogetipbot founder Josh Mohland recognize this, and that they’re working together to tackle one of the major issues plaguing digital currencies – mainstream acceptance.
Sullivan said:
“The ocean is so huge with what needs to be done –the common enemy we’re both fighting is the mass adoption of digital currencies.”
More trials needed
Though promising, this part of the bitcoin ecosystem is still growing, and questions remain that need to be addressed.
For example, businesses that embrace tipping may have an advantage over higher-volume sectors in the bitcoin industry because they’re not as adversely affected by bitcoin’s price volatility, Sullivan said.
“Price affects our business less than most, because people aren’t speculating and holding lots of money in their ChangeTip wallet. [Users are] using it to tip,” said Sullivan.
Despite this, perception about bitcoin’s price volatility is still widespread and may ultimately prevent some from embracing bitcoin tipping.
Waldon, the Space Industry News proprietor, has a sense that digital currencies are something that other websites will end up embracing as a replacement for display ads, but he suggested that this habit needs to take hold on more social media outlets.
On this end, ChangeTip recently added a new feature to its Google Chrome extension embeds a tipping button directly into Twitter’s web browser so that sending a tip is as easy as retweeting or favoriting someone’s tweet.
Source: TwitterFor now, however, Space Industry News still serves as an early example of a publisher adopting a hybrid revenue model that may become more prevalent in the future, and Waldon is pleased with the position.
“I’m feeling a paradigm shift coming and I want to be at the forefront of that,” he added.
Disclaimer: The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, CoinDesk.
Note: Space Industry News had temporarily implemented display advertising on 22nd November, citing issues with its code. The ads have since been removed and replaced with bitcoin tipping buttons.
Image via CoinDesk