The discussions around Web3 have really taken off. Whether it’s just dipping their toes into blockchain or taking the plunge into the metaverse, many brands and advertisers are starting to take the possibilities seriously. The medium’s most ardent supporters highlight decentralization as essential to establishing an Internet with privacy and user control at its core, and argue that Web3 could be the most viable way to break up Big Tech’s monopoly.
Despite the growing momentum around Web3 and the opportunities it affords, the industry appears to be divided on how to perceive the new technology. Opinions around blockchain, cryptocurrency and decentralization are still mixed: According to Stack Overflow’s 2022 Developer Survey, 32% of developers have a “favorable” perspective on Web3, compared to 31% with an “unfavorable” view.
With the jury still out on the possibilities, we asked industry experts for their perspective on the evolution of Web3, whether it really will be the next phase of the Internet, and what challenges could stand in the way.
Web3 can only go so far without regulation
Web3 gives Internet users more control over their data protection than ever before. However, 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 up and running again could see companies successfully gain public engagement and fulfill Web3’s potential to overtake Web2. But until centralized bodies such as governments become comfortable with decentralized environments, and platforms overcome complicated regulations and even outright bans on advertising, the ad tech industry is limited by some significant barriers.
Xavier Klein, UK Marketing Services Director, Doing science
Big Tech is holding Web3 back – but for how much longer?
There are some major roadblocks to the mass adoption of Web3 blockchain-developed Decentralized Identifiers (DIDs), for protecting individual identity, which would herald the start of ‘the next chapter of the Internet’. DIDs will enable users to transact securely and privately across the internet, but also get a cut of the data monetization if they want to sell their DIDs to advertising platforms.
The biggest blockers are all from Big Tech, who are concerned about the effects of introducing DIDs on their current ad revenue. However, Big Tech is under revenue pressure – Meta from Apple’s ATT upgrade in 2021, Google from Microsoft’s investment in ChatGPT to outbid Bing, and Amazon’s reported layoffs in 2023 due to overinvestment. So there may be a strategic advantage for one of the Big Tech players to provide a path to mass adoption of DIDs.
Kate Cox, CMO, BrightBid
Evolving audiences will improve Web3 adoption over time
Web3 and the metaverse are the natural evolution of the Internet as we know it today and will have a major impact on the ad tech industry. When you think about decentralized technology and virtual worlds (including games), new opportunities for real-time, personalized advertising and data protection emerge. Advertisers will need to rethink how to reach highly engaged audiences in virtual environments while 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 creator economies. Expect NFTs packed with utility and membership to be embedded in ad tech formats and AI-generated video, art, copy and digital people 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 this is already achieved through interactions with AR or virtual worlds.
Sam Field, Director of Innovation and Creative Partnerships EMEA, Yahoo Creative Studios
Web3’s potential for advertisers is too great to ignore
Web3 concepts can unlock great 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, trusted identifiers that facilitate valuable brand-user connections.
These features reflect Web3’s core ideology: shifting control away from the Internet’s gatekeepers and toward users. In comparison, Meta’s development of the metaverse conflicts with this ideology, as Meta will concentrate on protecting its walled garden, even as its efforts make Web3 more mainstream.
Ben Putley, CEO, Alkimi Exchange
Web3 has yet to deliver on its promises, but the future looks bright
Like the Internet’s growth from Web1 to Web2, Web3 will provide an evolutionary step that augments current functionality in a consumer-centric way, namely through immersion and self-sovereignty. The last two years have oversold the promises of the technologies, which have largely outweighed the practical use cases we’ve seen materialize in the industry – either due to abuse or quick cash to tap into the broader crypto market.
However, these years of capital-driven growth have also helped push these technologies through development, and despite the market downturn, I’m sure we’ll see exciting new projects develop over the coming years.
Vlad Panov, VP Web3 engineering, Publicis Sapient