Discussions around Web3 have really gained momentum. Whether it’s dipping their toes into blockchain, or diving into the metaverse, many brands and advertisers are beginning to take the opportunities seriously. The medium’s most ardent proponents see decentralization as crucial to establishing an Internet with privacy and user control at its core, and claim that Web3 could be the most viable way to break the monopoly of big tech.
Despite the momentum gathering around Web3 and the opportunities it affords, the industry seems divided on how to understand the new technology. Opinions about blockchain, cryptocurrency and decentralization remain mixed: According to Stack Overflow’s 2022 developer survey, 32% of developers have a “favorable” view of Web3, while 31% have an “unfavorable” view.
With the jury still out on the possibilities, we asked industry experts for their views on the advancement of Web3, whether it will truly be the next phase of the Internet, and what challenges might stand in its way.
Web3 can only get away without regulation
Web3 gives Internet users more control over their data privacy than ever before. But despite advantages such as decentralized data capabilities, the lack of policy on crypto and NFTs has highlighted Web3’s vulnerability to fraudulent activity.
Further investment in Web3, once the decentralized currency market is re-energized, could see companies fulfill Web3’s potential to successfully engage the public and overtake Web2. However, until centralized bodies like governments become familiar with the decentralized environment, and platforms completely overcome complex regulation and restrictions on advertising, the ad tech industry is limited by some notable obstacles.
Xavier Klein, Marketing Services Director UK, Making science
Big Tech is holding back Web3 – but for how long?
Mass adoption of Web3 Blockchain developed Decentralized Identifiers (DIDs) for personal identity protection is some of the major blockers that will usher in the ‘next chapter of the Internet’. DIDs enable users to transact securely and privately over the Internet but also get a piece of the data monetization action if they want to sell their DIDs on advertising platforms.
The major blockers are all from Big Tech, which is 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, Microsoft’s investment in ChatGPT, Google’s supercharged Bing, and Amazon’s reported exit from multiple investments in 2023. So there might be some strategic advantage for one of the Big Tech players to pave the way for widespread adoption of DIDs.
Kate Cox, CMO, BrightBid
Developing audiences will increase Web3 adoption over time
Web3 and the metaverse are a natural evolution of the Internet as we know it today and will have a huge 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 need to rethink how to reach highly engaged audiences in virtual environments, while also respecting users’ privacy rights, possibly through blockchain-based solutions.
Over the next 5-10 years, Gen-Z and Gen-Alpha will become an even more valuable audience, born from the world of gamification, immersion and the creator-economy. Expect usability and subscription-laden NFTs 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 spectator to participant is the backbone of Web3 experiences but is already being achieved through interactions with AR or virtual worlds.
Sam Field, director of innovation and creative partnerships EMEA, Yahoo Creative Studios
The potential of Web3 for advertisers is too great to ignore
Web3 concepts can unlock great potential for advertising. For example, blockchain technology could change how data is used, providing a public ledger that ensures transaction data is verified and trusted in the supply chain. Meanwhile, digital identity wallets give users direct control over their data and can act as consistent, agreed-upon identifiers that facilitate valuable brand-user connections.
These features reflect the core ideology of Web3: shifting control away from the gatekeepers of the Internet and toward users. In comparison, Meta’s development of the Metaverse conflicts with this ideology because Meta will focus on protecting its walled garden, even as its efforts make Web3 more mainstream.
Ben Putley, CEO, Alchemy Exchange
Web3 has yet to deliver on its promise, but the future looks bright
Similar to the growth of the Internet from Web1 to Web2, Web3 will provide an evolutionary step that enhances current functionality in a consumer-centric fashion, i.e. through immersion and self-sovereignty. The last couple of years have oversold the promise of the technology, which has greatly increased the number of practical use cases we’ve seen materialize in the industry – either due to misuse or a quick cash rush to capitalize on the broader crypto market.
However, the capital-fueled growth of these years has helped propel these technologies through development and despite the market slowdown, I am confident that we will see exciting new projects develop in the coming years.
Vlad Panov, VP Web3 Engineering, Publicis Sapient