Discussions around Web3 have really picked up pace. Whether it’s just dipping their toes in blockchain, or taking the plunge into the metaverse, many brands and advertisers have started to take the opportunities seriously. The medium’s most ardent supporters tout decentralization as crucial to establishing an internet with privacy and user control at its core, and claim Web3 could be the most viable way to break down the monopoly of Big Tech.
Despite the gathering momentum around Web3 and the opportunities it could afford, the industry seems to be divided on how to perceive the new technology. Opinions around blockchain, cryptocurrency and decentralization remain mixed. according to Stack Overflow’s 2022 Developer Survey, 32% of developers hold a “favorable” perspective of Web3, compared to 31% holding an “unfavorable” view.
With the jury still out on the possibilities, we asked industry experts for their perspective on the advancement of Web3, whether it really will be the next phase of the internet, and what challenges could be standing in its way.
Web3 can only go so far without regulation
Web3 hands internet users more control over their data privacy than ever. But despite benefits such as decentralized data capabilities, a lack of policy in crypto and NFTs has highlighted Web3’s susceptibility to fraudulent activity.
Further investment in Web3, once the decentralized currency market is buoyant again, could see companies successfully garner public engagement and fulfill Web3’s potential to overtake Web2. However, until centralized bodies such as governments become familiar with decentralized environments, and platforms overcome convoluted regulation and even outright bans on advertising, the ad tech industry is limited by some considerable barriers.
Xavier Klein, marketing services director UK, Making Science:
Big Tech is holding Web3 back – but for how much longer?
There are some major blockers to the mass adoption of Web3 blockchain developed Decentralized Identifiers (DIDs), for individual identity protection which would herald the start of the ‘next chapter of the internet’. DIDs would enable users to transact securely and privately across the internet but also get a slice of the data monetization action if they wished to sell their DIDs to ad platforms.
The major blockers are all from Big Tech, who are worried about the effects of introducing DIDs on their current advertising revenues. However, Big Tech is under revenue pressure – Meta from Apple’s ATT upgrade in 2021, Google from Microsoft investment in ChatGPT to supercharge Bing, and Amazon’s reported layoffs in 2023 from over investment. So there may be some strategic advantage for one of the Big Tech players to provide a route to mass adoption of DIDs.
Kate Cox, CMO, BrightBid
Evolving audiences will enhance Web3 adoption in time
Web3 and the metaverse are the natural evolution of the internet we know today and will have a big impact on the ad tech industry. When you think about decentralized tech and virtual worlds (including gaming), new opportunities for real-time, personalized advertising and data privacy are emerging. Advertisers will need to rethink how they reach highly engaged audiences in virtual environments, while also respecting users’ privacy rights, perhaps through blockchain-based solutions.
Over the next 5-10 years, Gen-Z and Gen-Alpha will become even more valuable audiences, born from a world of gamification, immersion, and creative economies. Expect NFTs packed with utility and membership to be baked into ad tech formats and AI-generated video, artwork, copy, and digital humans disrupting the creative industries. Interactive and immersive experiences are already part of the DNA of good brand experiences. Moving people from being an audience to a participant is the backbone of Web3 experiences but are already being achieved now through interactions with AR or virtual worlds.
Sam Field, director of innovation & creative partnerships EMEA, Yahoo Creative Studios
Web3’s potential for advertisers is too big to ignore
Web3 concepts can unlock huge potential for advertising. Blockchain technology, for example, can transform how data is used, providing a public ledger that ensures transaction data is verifiable and trustworthy across the supply chain. Meanwhile, digital identity wallets give users direct control over their data and can act as persistent, consented identifiers that facilitate valuable brand-user connections.
These features reflect Web3’s core ideology. shifting control away from the internet’s gatekeepers and towards users. In comparison, Meta’s development of the metaverse conflicts with this ideology as Meta will concentrate on protecting its walled garden, even if its efforts make Web3 more mainstream.
Ben Putley, CEO, Alkimi Exchange
Web3 is yet to deliver on its promises, but the future looks bright
Like the growth of the internet from Web1 to Web2, Web3 will provide an evolutionary step which augments current functionality in a consumer-centric fashion, namely through immersion and self-sovereignty. The last two years have oversold the promises of the technologies, which have greatly outweighed the practical use cases that we have seen materialize in the industry – either due to misuse or quick cash grabs to capitalize on the wider crypto market.
However, these years of capital-fuelled growth have also helped push these technologies through development and despite the market downturn, I am sure we will see exciting new projects developed over the coming years.
Vlad Panov, VP Web3 engineering, Publicis Sapient