Recently, the ICON community was treated to some interesting news about the project (and P-Rep candidate) weBloc, which announced the launch of their app “JubJub”:
“Just by visiting cafes in Jeju Island, you can get rewarded with cryptocurrency and the service is called “JubJub”. Tourists can use this service and visit partnered stores to maximize their fun while traveling.
The users can use their reward, WOK token, to pay for coffee or souvenirs, and might be able to cash out in the near future.”
It should be noted that the WOK token runs on the ICON public chain as an IRC token, meaning it requires ICX fees every time it is used.
While this announcement was another piece of progress toward further adoption of the ICON public chain, it also inspired me to do some digging on what weBloc is and just what they are up to.
weBloc is the project of a company called “ AD4th Insight,” which has been identified by some as “the digital marketing leader in Korea.” AD4th first appeared on the ICON radar in Spring of 2018, when it was announced that they had signed an MOU with theloop (now ICONLOOP):
“theloop has signed an MOU with AD4th to support digital marketing for blockchain business. The two companies agreed to share their expertise to strengthen the blockchain industry.
AD4th is the first company in Korea to host a blockchain demo day event, named ‘New Kids On the Block(chain)’. They are also engaged in various business areas such as blockchain business education, marketing for DApp projects. AD4th plans on expanding business areas to DApp project acceleration and building new DApp projects with the cooperation of start-up’s and conglomerates.”
It should also be noted that AD4th was the company that ICON teamed up with to establish Deblock, a “VC firm and accelerator jointly founded by ICON, the leading Korean blockchain protocol & AD4th Insight, a leading blockchain based marketing company.”
AD4th is currently led by CEO Joon Hong, who has extensive and impressive experience working in technology and advertising:
“CEO Ken Hong had worked at NAVER for 11 years from 1999 to 2009 taking the leading role in search engine business team, contributing to the explosive growth in the digital advertising market. With the advent of smart phone, he co-founded FSN (Future Stream Networks) in 2009, launching the very first mobile advertising service Cauly. He went through the M&A of Cauly to Yellow Mobile, growing Cauly into a listing company at KOSDAQ. After the successful exit, he moved on to Riot Games famous for League of Legends (LOL) taking the executive director in business development, contributing to the launch of League of Legends World Championship - the biggest esports event in the world - in Korea and developing a deep understanding and many experiences in game business. After that he moved to GS Shop working as an investment consultant contributing to the expansion of the venture business ecosystem. After the 20 years of digital advertising, mobile marketing, game, and venture investment, he currently works as CEO of blockchain AD tech company AD4th Insight and weBloc Asia.”
Meanwhile, the co-founder of AD4th, Matthew Lee, was eventually hired to serve as CEO of Unblock - LINE’s blockchain project. While Lee is no longer officially with AD4th, he does serve as an advisor to weBloc (along with Hongkyu Lee, CEO of Unchain, the joint venture between LINE and ICON).
AD4th as a whole currently has more than twenty employees (according to their website), and a handful of advisors (some of whom will be familiar to those who follow ICON).
In addition, they have a handful of impressive partners, including OK Cashbag (the oldest and most popular mileage point program in South Korea) and Syrup (a Korean payment platform).
So how do we get to weBloc? According to CEO Joon Hong, while AD4th was a successful and profitable mobile advertising company already, he realized “that there is a limitation to seek business expansion because Naver, Google, and other big advertising companies already dominate the domestic market.”
KJ Eee of the ICON Foundation spoke with Hong and, “suggested me to apply blockchain technology to our existing platform. I decided to take blockchain technology as the point of departure for the next big wave. I gained the first-hand experience of growth in the Internet while I was working at Naver.”
This ultimately led Hong to take the “blockchain plunge” and launch weBloc:
“My team and I started the weBloc project in which we collaborated with ICON Foundation and were supported by a leading provider of private blockchain solution, The Loop.
I strongly believe that every transaction on blockchain system are transparent so that all the participants are able to earn added-values. I have decided to apply blockchain technology to the weBlock, taking an advantage of the strategic partnership with ICON and experiences I gained in the industry for a long time.”
So just what exactly is weBloc doing with this blockchain technology?
This is where we see just how ambitious their objectives are: they essentially want to completely disrupt the current model of digital advertising.
According to their white paper (and probably anyone who has ever worked in digital advertising), the current model for ad distribution is notably cost-inefficient.
Here is a general description of how the model currently works:
Let’s say you’re a small business that wants to launch a digital advertising campaign across a number of platforms and websites (a fairly common approach in 2019).
Well, you probably don’t have the expertise or time to do that.
So you hire a marketing agency, who does have the time and expertise to do that. Out of $100 you may spend on advertising, the marketing agency takes 20% ($20) as their fee. (These numbers probably vary depending on the agency, type of campaign, etc. We are just using these percentages for the purpose of this example.)
So now you have $80 left to spend on actually reaching customers, after you’ve paid the agency.
But wait. There’s another step - you’ll likely also have to deal with an ad network. According to weBloc’s whitepaper:
“Small media companies without enough traffic have difficulty attracting advertisers. AD Network is an advertising platform to address this issue – developing AD networks to expose formatted advertisements by collecting small sized traffics and scaling up. It is widely used in the field of Display AD.”
In other words, let’s pretend you’re a blog with space at the top of your website for advertising. Instead of taking time to find possibly hundreds of companies to rotate throughout that space, you instead utilize an ad network and simply plug in their script to your website and collect your payment from the network.
So who is paying the ad network? Ultimately, the small business trying to reach more customers, via the marketing agency.
So while they still have $80 of their original budget, it might cost them another $20 in fees to the ad network.
That means the small business’s advertising budget has already lost $40 of value before a customer even sets their eyes on one of their ads.
Here is the image weBloc created to help illustrate this:
Now that you can see how cost inefficient this system is, it starts to make sense that this could be a market ready for disruption.
What does weBloc’s vision look like then?
Here’s how they describe it:
“weBloc is a project based on blockchain trying to develop a new digital advertising ecosystem firmly believing the value digital advertising should be focused on its essence. In other words, the players in the market need to stop focusing on the competition for scaling-up based on advertising fees and develop a structure where users can voluntarily participate in the advertising ecosystem.”
In order to do so, they have three guiding principles:
- First, middlemen’s (the agencies and ad network) profit is no longer guaranteed based on the advertising fees.
- Second, a new reward policy that can make users actively participate in the advertising ecosystem needs to be implemented.
- Third, weBloc will provide community-centered (network-based) advertising products that can be expanded.
This might be a bit hard to translate into practical impact - but I’ll attempt to do so here.
weBloc is creating an entirely new advertising “ecosystem.” Generally speaking, anyone who interacts with the ecosystem is a labeled as a “participant” (similar to how anyone who owns ICON can be considered an “ICONist”).
A participant can fulfill three roles within the ecosystem: user, advertiser, or middleman.
An advertiser is someone who wants to launch and fund an advertising campaign. They are responsible for “providing the purpose of advertisements, participation methods, and the minimum amount of tokens for participants.” In this example, it can be a coffee shop.
A middleman is someone who takes actions to spread the registered advertising campaigns, exposing the ads and campaigns to users.
A user is someone who consumes (or participates in) the advertising campaign.
It is possible for one participant to play all three roles. They could be a business owner launching a campaign, but also, in their free time, operate as a user and participate in other ads, or spend time serving as a middleman.
Each of these categories of participants can earn rewards in the form of the WOK token:
“Advertisers : Advertisers can evaluate and quantify the activities and contribution of middlemen and AD participants to earn tokens as rewards that can be used to start new advertising campaigns.
Middlemen : Middlemen can get tokens as rewards based on the evaluations from AD participants and their contribution levels.
Participants : Users can get the token rewards based on their AD participation and contribution levels.”
Now, this might sound like a similar model to the broken one I described above (especially with overt reference to “middlemen.” The key difference, however, is this: under the current model, an ad agency makes more money based on volume - the more ads they run (and the higher their budget), the more money they make. The quality of the campaign and the conversion of customers don’t factor into their profits.
Instead, the weBloc model rewards middlemen who gather and deliver quality users who have built up a contribution and reputation within the ecosystem.
Users - those who view and participate in the advertising campaigns - can show contribution by not only participating, but by evaluating middlemen and campaigns and performing other actions within the ecosystem. In doing so, they too receive WOK tokens. From an advertisers perspective, a potential customer who has a history of engaging with and absorbing ads is a way more valuable lead than one who simply glances at an ad and moves on.
Accordingly, all participants now have the correct incentives:
- Advertisers want to run an effective campaign to generate customers.
- Those implementing the campaigns (middlemen) are now incentivized not based on quantity of spending, but on the quality of possible customers (users), as determined by the reputation rating of the user(s).
- Users are motivated to engage at a higher level rather than just providing their attention, but by being more active players in the ecosystem.
The Practical Impact
In order to fully understand how this works in practice, let’s break down this week’s announcement about JubJub, weBloc’s app targeted for initial use on Jeju Island. Here is The Iconist:
“By downloading the mobile app for Android and iOS, JUBJUB users can earn WOK tokens by coming within 150 meters of a participating cafe. In the future, you’ll earn tokens for undertaking certain “missions,” such as visiting locations, ordering certain menu items or providing particular information.”
In this example, we have an advertiser: the cafes who want customers. We potentially have middlemen, who are working to promote this campaign, and we have users, who will be participants (in this case, by visiting cafes). (It should be noted that middlemen won’t necessarily always be required for every campaign.)
Advertisers (the cafes) pay a fee in WOK to fund and execute the campaign. Middlemen promote the campaign, and in doing so receive WOK based on the quality of users they gather to participate in the campaign. Users receive WOK for participating in the campaign, and also build up a reputation within the ecosystem based on their level of participation (presumably, the more cafes they visit, the greater their reputation/contribution).
Meanwhile, the WOK token has its own intrinsic value since it can be used to a) fund future advertising campaigns and b) can be spent at participating cafes (at least in this case). The token can already be bought and solid on the VELIC exchange, but the team plans to expand the exchanges WOK can be bought/sold in the future.
The Big Picture
While it’s certainly nice to see weBloc begin operating their service, it’s understandable to have some questions about how grand their vision is, considering Jeju Island has a population of only 700,000 people.
Fortunately for ICONists, weBloc is well positioned for expansion.
According to the whitepaper:
“weBloc advertising platform is designed to be able to interact with various communities over ICON’s Dapp project, planning to interact and connect with other blockchain platforms.
Not only the communities on ICON Blockchain but also other blockchains - using the Interchain technology by Loopchain to connect and expand.”
First, the “weBloc advertising platform will start a community-centered advertising platform by 1) establishing its own service based on stepwise expansion strategies.” They then plan to expand their application to other ICON DApps, followed by DApps on other blockchains via the ICON public chain. Finally, they aim to expand to non-blockchain communities.
It’s here that we begin to see the many possible opportunities for future expansion.
In fact, just a few weeks ago, weBloc reached a deal with TimeTicket, “an online platform that offers last-minute musical or theater tickets at discounted prices. Its platform ranked first in the performance/play/musical area of the application market and has 300,000+ customers.”
According to the announcement, weBloc plans to use the WOK token as the cryptocurrency for TimeTicket.
In addition, when looking at the many partners that AD4th has, it’s easy to see how some of them may be a logical use case for weBloc’s platform and/or the WOK token. (And the fact that two of their advisors are affiliated with LINE’s blockchain projects is also encouraging.)
Furthermore, weBloc’s presence and association with ICON possibly brings some clarity to some of ICON’s previous partnership announcements, such as the MOU with SK Planet:
“SK Planet will use blockchain technology in providing its mobile service, including its loyalty program SK Cashbag and Syrup. Through the partnership, it will adopt blockchain in its core business services, including e-commerce, online-to-offline services, and digital marketing.”
While a lot of their plans haven’t been made explicit, it’s clear to see a lot of dots that weBloc may be in great position to connect in the future – and that’s overall a great thing for ICON.