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From Data Monopolies to Democracies
The Transformative Role of Web3 in Digital Advertising
The fusion of web3 with advertising technology marks a transformative phase in digital marketing, bearing profound implications for brands and platforms. Web3, built on blockchain and decentralization, ushers in a user-centric internet era, granting users indisputable ownership rights over digital assets.
This new paradigm is a stark departure from the Web2 model, where platforms retain control. web3 empowers users with irrevocable possession of their in-game acquisitions, digital assets and online data, redefining their interactions with social media and other platforms that currently capitalize on this information.
Put it another way, web3 is set to dismantle traditional data monopolies, fostering a more balanced digital environment that prioritizes transparency, equitability, and decentralization, significantly impacting content creators, consumers, and advertisers.
This transformative web3 framework introduces diverse, meaningful engagement avenues for brands and advertisers, including immersive virtual realities and exclusive community access, paving the way for innovative marketing strategies in the digital domain.
Power to the People
Justin Vogel, Co-Founder of Safary, a Web3 alternative to Google Analytics, highlights the fundamental shift: "In Web3, users control their data, which changes everything in advertising. We're moving from a few controlling many to many controlling themselves."
Web3's decentralized approach stands in sharp contrast to the Web2 model, where platforms like Google and Facebook dominated the data streams. The centralized nature of Web2 often left users feeling exploited, as their data became the currency fueling these platforms.
"In Web2, the user was the product. In Web3, the user is the customer," explains Nodo Ivanidze, CEO, and Co-Founder at MetaViu.io, a Metaverse advertising network. This new relationship requires businesses to devise innovative strategies to engage consumers more aware and protective of their digital footprints.
For instance, Coca-Cola partnered with MetaViu to deliver a branded experience in Decentraland—a 3D virtual world accessed through a browser—where fans could win Coca-Cola digital wearable Christmas jumpers. The campaign created significant buzz, garnering ten times more impressions on Twitter than inside the game. This approach capitalizes on Web3's tenet of authentic digital ownership, a far cry from Web2's 'access-only' model.
But the changes extend beyond the consumer front. "We're seeing a complete overhaul in how marketing strategies are crafted. It's not just about collecting data but about understanding and integrating into the open-source intelligence network that Web3 represents," says Filip Wielanier, Co-Founder & CEO of Cookie3, a web3 user analytics platform. Brands are becoming more selective in the data they integrate into their marketing stacks.
Vogel echoes that sentiment: "Marketers have historically faced this false choice of either promoting privacy and tracking zero user data or rejecting privacy and collecting all user data." For the first time, marketers are collecting only the data they need, returning the unnecessary portions to consumers. This practice enables brands to build trust with consumers and market to them more effectively.
The approach companies take toward advertising campaigns is evolving. Oleksii Sidorov, Co-founder at Slise, a Web3 advertising network, references a campaign with a leading financial platform: "We're helping PayPal reach their targeted audience with relevant ads in the decentralized app ecosystem." Digital currency consumers are more receptive to these ads in their favorite crypto apps than on a traditional Web2 website. Slise already embeds ads in digital wallets, decentralized finance tools, and trading platforms, and Sidorov anticipates a future where ads will be as common in Web3 ecosystem as they are in Web2.
Another significant feature that advertising on crypto apps allows is access to user’s blockchain data that can be used for a hyper-personalized targeting instead of third-party cookies. As Google prepares to phase out cookies for a subset of Chrome users in Q1 2024, the adaptation within digital advertising remains uncertain. Blockchain data is public, anonymized, and accessible when users connect their digital wallets while browsing the web. Though the number of wallet users is currently small, blockchain data serves as a meaningful digital identifier, emerging as an alternative to third-party cookies. Today, fashion brands are already delivering targeted ads to users based on their online purchase history. Soon, these advertisers will be able to target users based on their recent Non-Fungible Token (NFT) transactions related to fashion.
The luxury sector is also tapping into this transformative shift. Rich Feldman, who leads marketing at Absolute Labs, a Wallet Relationship Management (WRM) company, notes how high-end brands are aligning with the new digital ethos. "Brands like Louis Vuiton don’t view this as a passing trend; it's a new way to engage with an audience that values digital authenticity as much as physical exclusivity."
This strategic transition epitomizes the broader shifts in the marketing landscape. The focus has expanded beyond the product alone to include how businesses embed themselves within the Web3 community ethos. Central to these strategies is recognizing that Web3 signifies more than a technological shift—it heralds a move towards digital democracy, where users reclaim control and transition from passive commodities to active participants.
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