This interview is part of our new Blockchain In Advertising series, where we interview the world's leading thought leaders on the front lines of the intersections between blockchain and advertising.
In this interview we speak with Peter Yu, CEO and founder of CyteCoin, to understand how his company is using blockchain to transform the advertising business, and what the future of the industry holds.
PY: The rapid development of Virtual Reality (VR) since 2015 has led to an explosive growth of AR/VR/360 contents that include games, photos, and videos. While game startups and hardware manufacturers are focusing on the entertainment market, the real burgeoning market has yet to become the next growth driver – VR Advertising. The massive AR/VR/360 market adoption will not grow without a sustainable monetization model given the high cost associated. THE SOLUTION – CyteCoin is designed to solve the problem by providing a decentralized platform among advertisers, content producers, event organizers, sponsors, influencers and audiences to reduce the cost of producing AR/VR/360 advertisements and at the same time establish an ecosystem for audiences and influencers to get rewarded by viewing and promoting AR/VR/360 marketing materials respectively.
We have engaged in the VR business since 2014 and been fiddling around different VR technologies with the attempt to come up with a killer application. Frankly, it's been a rough ride due to various technical hurdles and business model. However, we finally came up with a technology called “Object Tracking” whereby we are able to track what the audience is looking at within the VR environment and for how long. We then took the technology further by tokenizing the business to expand the usage of the technology. This is how we get CyteCoin started in early 2018.
PY: An advertiser can use CyteCoin via a smart contract associated with the target content. This content is now active, or live, which means content producers, viewers, and influencers can engage with that advertiser through the smart contract and be rewarded with CyteCoin for driving attention to that content. Every ad view, click, and reward that happens is communicated to the CyteCoin Smart Contract through VirtualCyte. The CyteCoin Smart Contract will then autonomously distribute CyteCoin to the users participating in that engagement. By utilizing smart contract, a publicly verifiable blockchain, and trusted, can directly disintermediate the “trade” of attention. It enables advertisers to execute ad campaigns by directly rewarding the content producers, services providers, and influencers of attention instead of going through an agent. Advertisers can target their smart contract to a much wider genre of content or even one specific media item. Advertisers choose the budget of their campaign by committing the exact number of CyteCoin that they want to be dispersed. Advertisers can also set custom conditions for the smart contract, e.g. 1 CyteCoin rewarded per ad click or 5 CyteCoin rewarded per ad click. This supports a transparent, competitive marketplace, where participants compete for the highest-rewarding smart contract. Advertisers can then visibly aim for low-cost, or suitable and effective cost campaigns. This provides a reward opportunity for all participants.
3. Could you share a specific customer/user that benefits from what you offer? What has your service done for them?
PY: We have done a sponsored 360 video for Spartan Race in Hong Kong back in 2017 and applied logo placements within the video and used “Object Tracking” technology to track on the logos and determine how many audience members have actually seen the logo and for how long. Since crypto and blockchain were still in their infancy stage, there weren't many people with e-wallet and who really understood cryptocurrency and as a result we had to do it manually by sending CyteCoin via wallet-to-wallet.
4. What other blockchain advertising use cases are you excited about?
PY: Blockchain advertising is a very niche market and I haven't seen or heard of any similar concept or technology is being deployed on the marketplace. However, it does make a lot of sense both technologically and economically, and I won't be surprised that there will be new players cropping up in the near future.
5. Where will CyteCoin be in five years?
PY: Good question! Both VR and blockchain have been evolving very rapidly almost every 3 months, and I wish I had a crystal ball but one thing is for sure and that is VR advertising is here to stay and so does blockchain. What I would imagine though is that CyteCoin will continue to gain more acceptance in VR content production and become one of the most popular cryptocurrencies, if not the only one, in the VR advertising industry.