ICO Analysis: AdHive

advertising

Digital advertising is the fastest growing segment of the advertising industry, and now has the highest market share in terms of ad spending beating TV in 2017. Despite losing billions of dollars in revenue to challenges like ad blocking or insignificant banner ads, the digital ad industry is still multiplying due to new growth avenues. Native advertising is one such segment which has helped the industry sustain high growth. Native advertising content is ‘in-feed’ (i.e., un-boxing videos on tech channels of YouTube), immune to disruptors like ad blockers and carries two times the brand recollection potential.

AdHive is a platform for native video advertising on the channels of key influencers. These influencers could be Instagram stars, famous YouTubers and influential content creators on other social media platforms.

To get a sense of what AdHive is trying to application, consider the following:

  • AdHive’s platform will create a distributed network of influencers with clear rules and quality, along with automated operations and payments.
  • AdHive will bring together advertisers and influencers on one platform. As such, it will work with thousands of small influencers globally as one channel. Even smaller niche influencers will get an opportunity to promote products on their channels.
  • Advertisers do not need to choose a particular influencer and control the placement — the platform does it automatically, saving time for both the influencers and advertisers.
  • An inbuilt AI confirms whether the influencers has completed the designated task or not. Smart contracts release payments as soon as confirmation of the work done is received.
    Influencers can work with any advertiser in a trustless manner.
  • AdHive also incentivizes human verifiers to validate the influencers work.

AdHive creates a transparent and trustless platform for influencer advertising using the AI and blockchain. The platform has potential advantages for both the advertisers and the influencers as compared to the traditional agency model.

An alpha version of the platform is released and available for testing. Beta release and initial customer acquisition will be done in Q1 2018. Community assessment functionality will be rolled out in Q3 2018. A recent blog post announced that the platform had registered 3000 influencers already.

Token

AdHive Token (ADH) is an ERC-20 token, which gives participants the right to access multiple activities and services of the AdHive network. Influencers have to pay a security deposit of ADH tokens to apply for ad placements. Meanwhile, influencers get paid in ADH, which can immediately be converted into fiat currency. Along with paying influencers, advertisers can also spend ADH Tokens for analysis of all video channels to detect usage of keywords and brands they are interested in. Advertisers can fund their accounts in native or fiat currencies. Once the payment is sent, fiat currency is automatically converted to ADH based on the current market rate.

Team

Co-founders Dmitry Malyanov and Vadim Budaev have previously co-founded and worked together on Scorch.ai and Webvane. Scorch.ai is a provider of Artificial Intelligence solutions for businesses. Meanwhile, the generation of text format metadata for the analysis or search of videos is one of the solutions provided by Scorch.ai. The work done on Scorch.ai will be useful for creating the AI modules of AdHive. This is definitely an interesting synergy that needs to be highlighted.

Malyanov has an impressive track record in business. Prior to joining Scorch in 2015, he headed Groupon’s sales team.

The third co-founder, Alexandr Kuzmin, is a serial entrepreneur and has experience in blockchain technology.

There are 13 team members listed on the website, along with seven advisors.

AdHive has partnered with organizations like Wings (tech support for the AdHive crowd-sale campaign), Bancor (liquidity for tokens) and AdEX (some video ad campaigns of AdEx will get implemented on the AdHive platform).

Verdict

AdHive is targeting a niche segment within the digital advertising industry. The company’s focus on video ads via social media influencers aligns with the team’s experience from previous ventures.

AdHive will be beneficial for “micro influencers,” i.e., influencers with a substantial following but not big enough to get them marketing deals. These micro influencers have a better engagement with their followers and have now started drawing the attention of advertisers as well. This category of social media influencers would eagerly be a part of a platform like AdHive which provides them visibility and commerce in a trustless manner.

Overall, AdHive is working on a niche use case with a good team and scaling potential.

AdHive faces competition from marketing agencies and marketplaces. Marketing agencies work exclusively with the top level influencers while the marketplaces are not ideal for micro influencers as they themselves have to work on the negotiations.

Risks

  • Top level social media influencers can get better deals by directly interacting with advertisers rather than a platform like AdHive. -1
  • Automated campaigns may not capture the qualitative aspects of different influencers. For example, a crypto YouTuber with 100,000 subscribers is much more influential than a vlogger with same subs but more video views. -1
  • Working on a niche segment, especially in a sector like digital advertising, carries the risks of being disrupted by a more substantial player offering diversified services. -1
  • Connecting with social media influencers is not as difficult as it used to be. Marketing agencies and advertisers can connect with even the smaller influencers via marketplaces like these.  -2

Growth Potential

  • AdHive has a solid team working on the project. Their previous work experience with Scorch.ai is very relevant for the AI modules of AdHive. Two of the co-founders are former senior managers at Groupon whose B2B2C model is similar to AdHives’s business model. +4
  • Negative impacts of ad blocking software and diminishing ROI from banner ads has resulted in increasing advertiser shift towards unaffected segments like influencer marketing. Native advertising has rapidly become a new reality for the advertising industry. +3
  • AdHive has targeted the right sector in the advertising space, as native influencer ads have better return metrics in almost all the segments. Influencer marketing content delivers 11x higher ROI than traditional forms of digital marketing. +3
  • AdHive has the first mover advantage as it is the first AI-controlled influencer marketing platform with blockchain technological solutions. The use of automation, AI and blockchain technology in influencer advertising has a good scaling potential. AdHive already has 3,000 influencers on the platform. +2

Disposition

We arrive at a score of 7 out of 10 for AdHive. We have rated it on the higher end mainly because of the beta launch is coming up in Q1 2018, already registered 3,000 influencers, good team and partnerships, and a niche presence in one of the fastest growing industries.

Investment Details

  • Token Type: Utility
  • Platform: Ethereum
  • Symbol: ADH
  • Pre-sale: 31st January 2018
  • Pre-sale bonus: Day 1-3 (Jan 31 – Feb 2): 20% Bonus; Day 4-7 (Feb 3 – Feb 6): 15% Bonus
  • Token Sale (Phase 1) : February 21 , 2018.
  • Token Supply: 450 000 000 ADH with 30% being offered in Phase 1 token sale. Phase 2 will be conducted in 2019 with the other 30% token supply.
  • Hard Cap: $12 million for Phase 1.
  • Jurisdictions Barred from Participating: Only accredited U.S. citizens are allowed to participate. Chinese citizens are banned.
  • Website: https://adhive.tv/

Featured image courtesy of Shutterstock. 

Author:
Aakash Kawale is a financial analyst based out of Mumbai, India. He is the lead analyst at a Singapore based organization and has extensive experience of analyzing US and Indian equities. Aakash is a strong advocate of the Blockchain technology and has been analyzing cryptocurrencies since 2015.