Exploring Web3's Role in Advertising and Viewer Engagement

10 May 2024

Today I'm speaking with Chris Schave, and we'll the role of Web3 in the modern advertising and viewer engagement.

Please introduce yourself

My name is Chris Schave, and I am the Chief Revenue Officer at Azarus. My responsibilities include ad sales, business development, and managing partnerships.

How did you get into the crypto space?

Like many, I hopped on the bandwagon a few years ago when Bitcoin was pretty well established in the space, and many new tokens started popping up and getting buzz in the media.

I was one of those people who quickly lost money on the Dogecoin hype, buying at the peak. After a few years of dabbling in the space and doing more research, I was allowed to join Azarus, a company expanding into the advertising space.

Alex, our CEO, and I spoke about the company's direction, which sounded compelling. Since joining, it's been a bit of drinking from a firehose experience to get caught up with all things blockchain and crypto.

How have online ads changed over the past ten years, and how has this affected people's interactions with them?

I started at Amazon Ads in 2013 on what was then called the Inside Sales team. It was cold calling Amazon vendors and pitching them why advertising on Amazon would help them sell more.

The common response was, "Oh, Amazon has advertising?" Today, you'd be hard-pressed to find an Amazon vendor anywhere in the world who doesn't know that. So, one of the most significant changes would be the introduction of e-commerce advertising.

With that came all kinds of shopper data and signals that allowed advertisers to refine their audience targeting to a much more granular level. Today, any company with audience data is exploring leveraging that to sell ads.

Now that all these companies have access to all this data, they have figured out how to measure better than ever. Before eCommerce advertising, all the measurement tools were very directional.

Many big companies still use these, but now there are metrics that show exactly how many units were sold to how many people and the actual ROI of your campaign. This has given rise to 1000'sthousands of performance advertising agencies taking advantage of how long it takes the bigger ad agencies to adapt to new eComm-based strategies.

So now, people have what I would assume is a much higher ad penetration and ads that are hyper-targeted to them. It's a double-edged sword. It's nice to learn about new products that I wasn't aware of, but it's a little freaky when I'm talking to my friends about something, and Instagram is now blasting me with ads for that exact thing.

Now, companies like Azarus focus on ads that do not take but provide value. I think that is going to be a massive shift in the industry.

How does Web3 technology help make online ads more honest and open?

I can't speak for all companies innovating in the ad space with web3. Still, one thing that excited me about Azarus was the idea of digital ownership and audience rewards, which are all built on blockchain using smart contracts.

The idea is that rather than give someone a fullscreen mid-roll ad that interrupts the stream they are watching, you give them the option to play a branded interactive game that everyone else on the stream can play simultaneously. If they play, they receive some sort of reward.

First, this allows audiences likely to watch this stream alone to play with others. This creates more of a sense of community amongst the viewers beyond the chat box. Second, reward gives the audience something for their time and engagement. When I started at Azarus, we offered AZA tokens to reward viewers.

This loyalty point can be used in our digital store to redeem over 35,000 items. We then started offering Web3 brands the ability to inject their tokens as rewards to incentivize audiences to take action after engaging with the ads. Seeing how well that worked, we decided to build a way for Web2 brands to use digital rewards, such as promo codes, as a way to reward.

Ads are disruptive to the experience being watched. There's no way around that. But if you acknowledge that elephant in the room and tell people, "Hey, we know this is a distraction, but we want you to play an entertaining game, and at the end, you may get a 20% off code for a restaurant you like or a free energy drink," that seems like a much more fair trade-off between the brand and the audience.

From the advertiser's perspective, we charge on a cost-per-interaction basis. Advertisers only pay when a real person plays the game. Our off-the-shelf offering is trivia, so if a person answers at least one of three questions, that incurs the charge.

Brands are moving towards a model where they want to know more about what they are getting for their ad investments. We are completely transparent and let them know exactly how many people played, how many times, and if they redeemed the reward.

How can data be used to improve the ability of online ads to engage people? Can you give examples of how data has helped you?

Today, data is everything in advertising. We are moving into a world where publishers will be subject to more restrictions on how they collect and use data.

It's going to be those companies that own their own data and have permission to use it for advertising, as well as those that can make sophisticated models to find relevant shoppers without knowing exactly who they are, that will win.

Advertising is about engaging someone at the right time, with the right product or solution, and in a way that captures their attention. Companies will continue to find workarounds for data privacy laws and a cookieless future using data in new and inventive ways.

We are taking a very conservative approach and collecting as little data as possible. We do not share anything beyond our standard metrics with advertisers. Our long-term goal is to be an ad tech provider for publishers that want to engage their audiences with interactive ads at scale.

This would allow them to use their data and make those strategic decisions. That said, we have used data to look at optimal ads per person, how many streamers we need to activate a campaign, and many more ways.

How can users balance making ads personal to people's interests with respecting their privacy?

A really easy way is to use contextual cues. Azarus' ads show up on predetermined Twitch streams. Typically, the channels are gaming streamers, so advertisers can message in a way to gamers. This could easily be applied to any site, but it may take a little more effort when looking at programmatic advertising, for instance.

We are on the cusp of seeing many innovative predictive models where brands will still be able to effectively reach their desired audience with minimal margin for error. This is, in general, not necessarily something we are working on at Azarus. The industry just had this wild swing of hyper-targeting people.

This flourished, but now it's time to pull back a bit to protect privacy. Advertising is big business, so very smart people will always figure out how to be as precise as possible when it comes to targeting audiences, even as more restrictions are rolled out.

What does your platform use to encourage viewers to interact with the games they see during live streams?

When you go to a basketball game and there's a t-shirt toss, even if you're like me and don't want to look excited, you secretly want that t-shirt. That's what we are doing. We offer you the chance to answer some trivia questions that should be fairly entertaining, and then we give you a prize.

Audiences can minimize the ad if they don't want to play or see it, so we know the people playing are purposefully doing so. If you can win 20% off food delivery for answering some questions, that's a compelling offer.

Can you explain how Azarus turns live streams into an interactive gaming experience for viewers?

From a technical standpoint, we can use a few different options to overlay our games onto a stream. The easiest is JavaScript, which we will typically test with new partners.

For Twitch, we use a Twitch extension that creates a very native experience where the streamer enables it and their audience can see the ads over the stream.

VPAID or VAST tags are another option for other video players. Finally, we have a web browser extension, but it requires both the site/channel and the viewer to enable it.

From a more functional standpoint, we work with native and standard protocols to create an overlay on streaming video players. This could be something like Twitch live streams or your favorite streaming app on your TV. We could use Azarus to overlay an interactive experience anywhere there is a video player.

So, in the case of Twitch, since that is live today, a viewer would be watching a stream, and the branded overlay would appear on the left-hand side of the video player. They would then see a countdown if it's a trivia game, and then the first question would appear.

Most brands want people to know what they're playing for, so the message might say, "Win up to 20% off your next order" or something similar. After the game is over, you can enter your ema "l to redeem your prize, which is st "red, in a custodial wallet that can be accessed on our site.

There are other options to choose from, such as winning entries into a larger prize pool or our AZA loyalty points. Generally, though, that's the user experience.

What role does Web3 technology play in your approach to creating a fair reward system for viewer engagement?

Because we have built this on the blockchain, there is a ledger of what people have won, and they can see that. It also allows us to be very adaptable when working with other web3 companies. We've had many discussions with partners about live minting NFTs on stream and using a gamified overWe've created a fun experience where the audience is an active paNFT in the stream.

We've also discussed what this looks like for crypto sports betting. Definitely note not my area of expertise, but I think in all of these use cases, what excites me is the ability it to bring people together in a world that is, by its nature, a bit isolated.

What new ideas or technologies do you think will change how online ads work in the future?

The very obvious ones are AI and machine learning. Machine learning has been used for a while now, and it helps with targeting and optimizing creativity.

My take on AI is that the low-hanging fruit is around creating simple ads. We are working on some concepts with AI that I won't go into too much detail about, but the idea is to streamline creative processes that are currently manual.

It's nothing groundbreaking, given what others are doing with AI, but we are a small company, and if we can save time, then it's worth the investment.

For us, interactivity is the big one. At its core, interactivity isn't new. Cliit'sg on an ad is technically interactive. Shoppable ads are big right now, but we want to develop new ideas to make advertising fun.

Even looking at OTT ads on streaming apps, it's just a TV commercial that I watched in the 1980s. TVs are becoming smarter, and we can work to build some incredible interactive experiences. Education is one area where I'm excited to see where innovation with interactivity can go. So many paths could be taken, but it's still very early days for us.

How can users utilize data analytics to enhance user engagement with these ads? Could you provide examples of how data insights have driven engagement improvements?

One thing we offer is A/B testing. It's a pretty simple data use case. Identify which creative is getting more people to play, what types of It'stions are answered more, or what rewards attract more players.

Those are the types of questions we look to answer and then apply to recommendations for advertisers in the future. Many publishers, like Facebook, Amazon, Wal-Mart, TikTok, and Google, all have proprietary tools to optimize many elements of their ads dynamically. We aim to work with those companies and have them use Azarus as an ad tech provider. That way, our ads can use their dynamic optimization tools without us having to reinvent the wheel.

Can you discuss any innovative techniques or technologies you've utilized to enhance user engagement with online ads?

It's probably not the most tech-focused thing, but our goal is to make ads that are genuinely fun to play with and that people want and can use. Most of our tech focus has been on scalability.

To get 500k people to play a game over time isn't too technically challenging. What is challenging, and what we have solved for, is having 500k people in a game simultaneously and receiving the correct rewards they individually earned at the same time.

It's the opposite of user engagement, but it's easy to turn people away and lose engagement when the same freezes or they don't get a promo code they earned. The areas we want to innovate in are those that don't make ads fun, engaging, and memorable.