Whether we like it or not, advertising will find its way into Web3. But now, we have the opportunity to control what it looks like, says Shiv Malik, Pool’s founder and CEO.
The tour guide suddenly stopped among the ruins of the ancient Greek city of Ephesus and pointed out to us the strange series of engravings on the flagstone – a leg, a portrait of a woman and what looked like a purse.
“Here,” he said, “is the world’s oldest ad. “It’s for a brothel that was just around the corner.”
Staring down the marble pathway, the lessons were clear. Even 2,000 years ago you still needed to market yourself in order to prosper. And with the exception of owning a brothel itself, advertising may be the oldest business in the world.
Many millennia later advertising is still something that people would like to pursue in a hurry. Even though they’re delivered in far more mindlessly sophisticated ways than anyone imagined until 30 years ago, commercials are treated with weary disdain; Persistent annoyance but still a fact of life.
The techno finds are definitely a different breed and tend to have a far more visceral relationship with their Mad Men counterparts. At the dawn of the Internet in the early 90s, it was envisioned that everything would be free. Programmers will philanthropically create distributed open source software at zero marginal cost, and have no need for marketing evils. This kind of commercial greed will ruin everything good and pure about online digital communities. Capitalism will be debarred from sticking its greedy mouth into the pit of utopia.
advertising is here to stay
It didn’t take long for the ad to find its way. (Spoiler alert: it always will be). By the mid-90s, banner ads and email spam were pretty ubiquitous. A decade and a half later, free-to-use social platforms were taking over networks of millions and monetizing them with even greater efficiency. The key assets of the digital age shifted from interactivity and content to focus and data. If you can connect people to screen, and you even know who those people are, you can make a unicorn almost overnight.
Like Web1 thirty years ago, Web3 is at a similar crossroads. How does it handle advertising? Oppose? embrace? Or just ignore it in the hope that it goes away? Of course Crypto, as opposed to Web3, likes nothing more than advertising. Few tokens make it big without the garish marketing and slyness and wink from A-list influencers.
From London to the streets you can find shillings of cryptocurrency shamelessly Lima, This year’s Superbowl was dubbed the “Crypto Bowl” because the ads were so ubiquitous (but still annoying as ever).
But from a technology point of view, blockchain is yet to adjust. Advertising is not natively distributed across all except some blockchains or dApps. Blockchain hasn’t really added anything to what Web2 has already mastered.
Of course, most protocols, such as Uniswap, or Ethereum itself (which does not have a ‘frontend’) do not need to be ad supported. They have effectively chosen a user-funded model. And maybe it stays the same. If payments, which blockchain does best, are very frictionless and users are willing to pay for Web3 services, why even think about integrating annoying ads into the process? Who wants a message from Walmart to save gas in their wallet?
Of course there are exceptions to this. Chief among them is the Brave browser which deserves your attention. Other smaller projects are now building on this “look to earn” model. But it is not clear whether the advertising industry really wants to embrace this kind of open bribery. Brands are also capturing NFTs to do their marketing. But are there other new ways of integrating advertising into the blockchain that could actually improve the delivery of ads for everyone involved?
If advertising in Web3 is almost deliberately opposed, it’s for the most obvious reason: Marketing pits against privacy, one of the central tenets of this movement.
To advertise well, marketers must know who you are. To find your yet-to-be-met needs, some economists call latent demand, advertisers must know what motivates you. They should know what you’re thinking about, what decisions you want to make without yourself realizing it.
As the Internet’s founder himself warned in 2008, succumbing to the unruly motives of advertisers is sacrificing privacy. To sell you have to reveal yourself to salesmen, which is no deal Web3 builders are willing to strike.
There is a way out. The solution lies in separating those two key assets, focus and control of the data.
Currently tools of surveillance capitalism such as cookies and data-sucking mobile SDKs, serve those who want to create, then control, attention and consumer information. Google, Facebook et al. Now both of them own properties, which gives them their outsized power.
What if Web3 could leverage decentralized storage, messaging and payment networks to help users control the data side of the equation? Imagine, a data wallet that allows users to hold not only their tokens, but also their data from multiple sources. They can control who can read that information using the same private key that controls payments.
This fits in with the vision of a decentralized social identity, practically realized with the ‘spirited’ tokens that Vitalik Buterin, Glenn Weil, Pooja Ohlawer and others have been floating around lately.
Aligning both the payments and digital stories in this way creates excellent KYC and identity solutions. But knowing one’s overall digital story is also exactly what advertising tech has wanted for decades. Furthermore, when a user controls their data, they can also take advantage of that control. Either in exchange for payment, for fewer ads (but hopefully better quality ads), or just outright privacy.
It can all work using the ‘Sign in with Ethereum’ protocol. With Data Wallet, you can sign in to any website and then be asked if the site host can read your Data Wallet. You choose.
Imagine signing into an insurance marketplace website that could automatically figure out which deals were the best without requiring you to fill out forms for 20 minutes.
Imagine never having to modify cookie preferences again because any site could ‘know’ your personal preferences, because you stored them once in your data wallet.
By combining private data with just a private key, this is a future where the power, value and control of data will be redistributed to billions of people around the world.
It’s also an ecosystem that advertisers will be desperate to adopt because it provides them with a lot more information than they currently do, while knowing it’s based on consent.
So maybe there’s a way forward, where Web3 can deliver for advertisers and digital citizens alike, rebalancing interests long out of kilter. If nothing is done, advertisers will find a way regardless. And if the last two thousand years of marketing have anything to teach us, we probably won’t like the results.
About the Author
The founder and CEO of Pool is Shiv Malik. Infrastructure and technology solutions fueling the growth of data unions.
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