A Complete Look at Profila & Zero-knowledge Advertising

The online ad industry is worth billions of dollars and is growing year by year. 

However, it is built on user tracking models, where personal data is collected and traded away like between advertising platforms and brands. 

Profila, a Cardano-based, data marketing platform aims to change how users and brands interact, using Zero-Knowldge Advertising (ZKA) as part of a decentralized marketing (DeMar) system.

This system is intended to work by allowing users to create anonymous identities which they can use to opt-in to offers by brands by providing keywords of the products they’re looking for.

As part of this system, users will also be compensated for viewing curated advertisements.

In this post we’ll look at how brands handle user data, the Profila platform, how it works and Zero-Knowledge Advertising.

How Brands Handle Personal User Data

Personal data about you is gathered and shared with marketers every time you visit a website, watch a video, like a post on social media, fill out a form, or buy a product or service online. 

This data is used to help advertisers show you more relevant products or services, which you are more likely to purchase.

Why would some companies and publishers sell and misuse their user’s personal information?

Well, that's because online advertising is a very profitable business model, and it needs personal data to be more effective.

According to a report by Mordor Intelligence, the online advertising market was valued at $378 billion in 2020, and is expected to reach $982.82 billion by 2025.

In most circumstances, you agree to submit your data without knowing how a company will use it (typically disguised in a privacy policy or addressed in ambiguous wording). 

So what can you do if a company uses your information against your will, and how can you keep track of all the legal rules that govern a company's use of your personal information?

Users have little control over how brands use their personal information. Brands and advertisers are solely responsible for determining when to contact you, which medium to use, and the content you see. 

This is partly due to a lack of tools for giving advertisers clear instructions on frequency of interaction, preferred channels, or preferred content. 

It would be better to put users and advertisers on the same level, making this information exchange more transparent and consumer friendly.

This is one of the reasons why the blockchain-based data platform, Profila, started to build a decentralized marketing (DeMar) platform on Cardano.

How Does Profila Work?

Users are able to select which brands they want to see content from using the Profila application. 

They choose the brand and frequency of the content, for example one piece of content per day from a brand or once a year, they’re also compensated for every piece of content that they view.

As part of their decentralized marketing platform, Profila is working on a framework for "Zero Knowledge Advertisement and Insights," or Zero Knowledge Advertising (ZKA). 

ZKA will allow a brand to market to their target customers without revealing any personal information about the user to the brand.

The ZKA protocol plan to enable the following:

Customers can see curated and relevant adverts without advertisers receiving any personal information such as websites visited, similar ads clicked on etc.

Advertisers to market to their target customer without the need for intrusive information about that customer such as age, demographic, interests etc.

The platform is also developing an expert-sourced knowledge base on privacy policies and legislation with the help of the University of Lucerne's (HSLU) Blockchain department.

The aim of the project is the creation of a chatbot or AI Lawyer, using the data from the privacy knowledge base. The chabot will be used as a customer engagement tool for users.

The Profila team is also working on a marketplace where users can create anonymous personas or avatars. 

These personas enable individuals and businesses to meet and engage anonymously until both parties agree on the parameters of their interaction (under the terms of a data subscription).

For example, if a customer wanted new running shoes, they’d use the Profila app to build an anonymous avatar, they would then enter keywords such as “tennis shoes”, “24 years old”, “male” and “shoe size 10”.

Brands that supply products matching the keywords will be able to send offers to the users avatar. Once the user chooses a brand, the brand can identify them and send them the tennis shoes.

When users opt-in for paid content from brands on, they are reimbursed for allowing access to their data and they receive 50% of the advertising expenditure. 

Building a DeMar Protocol on Cardano

The decentralized marketing protocol will be built on the Cardano, a proof-of-stake (PoS) blockchain.

Profila is also integrating Atala Prism's decentralized ID capabilities and working on a CNFT (Cardano Non-Fungible Token) use case for customer-created content.

Every time a user shares a piece of data or advises a corporation how to use (or not use) their data, their instructions are hashed (encrypted) and kept on the Cardano blockchain.

Users will have irrefutable proof of what occurred if a brand misuses their information, shares it with third parties, keeps it longer than intended, or uses it for purposes other than those stated in the initial agreement.

One of the reasons for building on Cardano is the low transaction costs. This enables it to scale internationally while using the least amount of energy possible, addressing one of the most pressing concerns in the existing blockchain ecosystem. 

The costs of a transaction are determined by the size of the transaction. The average costs, on the other hand, are generally lower than those of Ethereum.

Cardano is also a lightning fast cryptocurrency. It can process over 1.000 transactions per second (TPS), making it faster than Ethereum, which can only process 20 transactions per second at the moment. 

The Cardano network may be able to accommodate 1 million TPS in the future (pending an upgrade to the blockchain platform called Hydra).

The Profila protocol is expected to process millions of transactions every day, with Profila paying individuals to see ads. 

These ads could cost anywhere from a few cents to a few dollars. The project intends to use Cardano to install their ad-delivery model on the blockchain.

Conclusion

The question of ordinary people having control over their digital data is a controversial one. Big data platforms track and share user data with advertisers, usually with users being none the wiser.

However, if brands can skip the middleman and market to users directly, without getting access to sensitive information such as browsing history, age, sex etc. This could start to level the playing field between both brands and customers.