Advertising will find its way into Web3 whether we like it or not. But now, we have an opportunity to control how that looks, says Shiv Malik is the Founder and CEO of Pool.
The tour guide suddenly stopped amongst the ruins of the ancient Greek city of Ephesus and pointed to the strange series of engravings on the flagstone before us – a foot, a portrait of a woman and what looked like a purse.
“Here,” he intoned, “is the world’s oldest advert. “It’s for a brothel that was just around the corner.”
Staring down at the marble pathway, the lessons were clear. Even 2,000 years ago you needed to market yourself to prosper. And with the exception of brothel-keeping itself, advertising might be the oldest business in the world.
Several millennia later adverts are still something that people would rather hastily step over. Even though they are delivered in far more mind-bogglingly sophisticated ways than no one could have imagined even just 30 years ago, ads are regarded with weary disdain; a frequent annoyance but a fact of life nonetheless.
Technological pursuits are of course a different breed and have tended to have a far more visceral relationship with their Mad Men counterparts. Back at the start of the internet in the early 90s, it was imagined that everything would be free. Programmers would altruistically create open source software distributed at zero marginal cost, and there would be no need for the evils of marketing. Such commercial greed would ruin all that was good and pure about online digital communities. Capitalism would be denied from sticking its greedy maw into the trough of utopia.
Advertising is here to stay
It didn’t take long until advertising found a way in. (Spoiler alert: it always will). By the mid-90s, banner ads and email spam were fairly ubiquitous. A decade-and-a-half later, free-to-use social platforms were capturing networks of tens of millions of people and monetizing them with ever more efficiency. The prime assets of the digital age shifted from interactivity and content, to attention and data. If you could hook people to the screen, and you also knew who those people were, you could create a unicorn almost overnight.
Like Web1 thirty years ago, Web3 is at a similar crossroads. How does it handle advertising? Resist? Embrace? Or simply ignore it in the hope that it goes away? Of course crypto, as opposed to Web3, loves nothing more than advertising. Few tokens make it big without garish marketing and the sly nod-and-a-wink from an A-list influencer.
You can find crypto shamelessly shilling itself on the streets from London to Lima. This year’s Superbowl was dubbed “Crypto bowl” because the ads were so ubiquitous (but still as annoying as ever).
But from a technology perspective, blockchain has yet to come to an accommodation. Advertising isn’t natively delivered in all but a few blockchains or dApps. Blockchain hasn’t really added anything to what Web2 already mastered.
Of course, most protocols, like say Uniswap, or Ethereum itself (which doesn’t have a ‘frontend’) don’t need to be ad supported. They’ve effectively opted for a user funded model. And maybe that’s how it stays. If payments, what blockchain does best, are pretty frictionless and users willing to pay for Web3 services, then why think about integrating annoying adverts into the process? Who wants a message in their wallet from Walmart to save on gas?
Exceptions
There are exceptions to this of course. Chief amongst them is the Brave browser which pays you for your attention. Other smaller projects are now building on this “look to earn” model. But it’s not clear whether the advertising industry itself really wants to embrace such open bribery. Brands are also seizing on NFTs to do their marketing. But are there other novel ways of integrating advertising into blockchains that could actually improve the delivery of ads for everyone involved?
If there is almost deliberate resistance to advertising in Web3, then this is the most obvious reason: marketing grates against privacy, one of the central tenets of this movement.
To do advertising well, marketers must know who you are. To discover your as-yet unmet needs, something economists call latent demand, advertisers must know what drives you. They must know what you are thinking about, what decisions you want to take without you yourself realizing it.
As the founder of the internet himself warned in 2008, giving in to the unchecked aims of advertisers, means giving up on privacy. You must reveal yourself to the salesman in order to be sold to, which is not a bargain Web3 builders are willing to strike.
Advertising: Solutions
There is a way out. The solution lies in separating control of those two prime assets, attention and data.
Currently the tools of surveillance capitalism like cookies and data sucking mobile SDK’s, serve those who seek to create, then control attention and consumer information. Google, Facebook et al. own both those assets now, which is what 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 then, a data wallet that allows users to hold not just their tokens but also their data from many multiple sources. They could control who can read that information using the same private key that controls payments.
It fits with the vision of decentralised social identity, practically realized with ‘soulbound’ tokens that Vitalik Buterin, Glen Weyl, Puja Ohlhaver,and others have been floating recently.
Aligning both payments and digital stories like this makes for excellent KYC and identity solutions. But knowing someone’s holistic digital story is also exactly what ad tech has wanted for decades. Except that, when a user controls their data, they also get to leverage that control. Either in return for payment, for fewer ads (but hopefully better quality ads), or just outright privacy.
Data Wallets
This could all operate utilizing the much underrated ‘sign in with Ethereum’ protocol. With a data wallet, you can sign into any website and then be asked whether the site host could read your data wallet. You choose.
Imagine signing into an insurance marketplace website which could automatically understand what deals were best without you needing to laboriously fill out forms for 20 minutes.
Imagine never having to modify cookie preferences again because any site could ‘know’ what your personal preferences were, because you stored them once in your data wallet.
By simply ringfencing personal data with a private key, it’s a future where the power, value and control of data would be redistributed to billions of people around the globe.
It’s also an ecosystem that advertisers would be desperate to adopt because it provides them with so much more information than they currently have, all the while knowing it is also based on consent.
So maybe there is a way forward, where Web3 can deliver for advertisers and digital citizens alike, rebalancing interests that have long been out of kilter. If nothing is done, advertisers will find a way through 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
Shiv Malik is the Founder and CEO of Pool, the infrastructure and technology solution fueling the growth of data unions.
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