The debate around Web3 has really picked up steam. Whether dipping their toes into blockchain or diving into the metaverse, many brands and advertisers are beginning to take the opportunity seriously. The media’s most ardent proponents argue that decentralization is essential to creating a web with privacy and user control at its core, and argue that Web3 may be the most viable way to break Big Tech’s monopoly.
Despite the momentum gathering around Web3 and the opportunities it can afford, the industry seems divided on how to embrace the new technology. Opinions on blockchain, cryptocurrency, and decentralization remain mixed: According to Stack Overflow’s 2022 Developer Survey, 32% of developers have a “favorable” perspective on Web3, while 31% have an “unfavorable” view.
While the jury is still out on the possibilities, we asked industry experts for their thoughts on the evolution of Web3, whether it will truly be the next phase of the web, and what challenges may stand in its way.
Web3 can only go so far without regulation
Web3 gives internet users more control over their data privacy than ever before. Despite advantages such as decentralized data capabilities, the lack of policy on cryptocurrencies and NFTs has highlighted Web3’s vulnerability to fraudulent activity.
Further investment in Web3 after the resurgence of the decentralized currency market could see companies successfully engage in public engagement and Web3 fulfill its potential to overtake Web2. However, until centralized bodies such as governments become familiar with decentralized environments and platforms overcome complex 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 back Web3 – but for how long?
There are some major blockers to the mass adoption of the Web3 blockchain, developed by Decentralized Identifiers (DIDs), which heralds the start of the “next chapter of the internet” for personal identity protection. DIDs will allow users to transact securely and privately over the internet, while also getting a share of data monetization if they want to sell their DIDs to advertising platforms.
The main blockers are all from Big Tech, concerned about the impact of implementing DIDs on current ad revenues. However, Big Tech is under revenue pressure – Meta from Apple’s ATT upgrade in 2021, Google with Microsoft’s investment in ChatGPT to power Bing, and Amazon overinvestment reported in 2023 gave. So there might be some strategic advantages for one of the Big Tech players to provide a route to mass adoption of DIDs.
Kate Cox, CMO, BrightBid
A growing audience will increase Web3 adoption over time
Web3 and the metaverse are the natural evolution of the internet as we know it today and will have a huge impact on the ad tech industry. When we think about decentralized technology and virtual worlds (including gaming), new possibilities for real-time, personalized advertising and data privacy arise. Advertisers must 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 a more valuable audience born from the world of gamification, immersion and the creative economy. Expect to see AI-powered video, artwork, copy and digital people developing useful and membership-filled NFTs into ad tech formats that are disrupting the creative industries. Interactive and immersive experiences are already part of the DNA of good brand experiences. Moving people from audience to participant is at the core of Web3 experiences, but is now achieved through interaction 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 open up great potential for advertising. For example, Blockchain technology could change how data is used by providing a public ledger that ensures transaction data is verifiable and reliable in the supply chain. At the same time, digital identity wallets give users direct control over their data and can act as persistent, agreed-upon identifiers that facilitate valuable brand-user relationships.
These features reflect the core ideology of Web3: to shift control away from Internet gatekeepers and toward users. In comparison, Meta’s metaverse development is at odds with this ideology, as Meta will focus on maintaining its walled garden even as its efforts make Web3 more mainstream.
Ben Putley, CEO of Alchemy Exchange
Web3 has yet to deliver on its promises, but the future looks bright
Just as the Internet evolved from Web1 to Web2, Web3 will provide an evolutionary phase that augments current functionality in a consumer-centric way, i.e. through immersion and self-sovereignty. The past two years have oversold the promise of technologies that far outstrip the practical use cases we’ve seen materialize in the industry – either due to abuse or a quick cash grab to capitalize on the broader cryptocurrency market.
However, capital-fuelled growth over the years has also helped drive the development of these technologies, and despite the market downturn, I’m sure we’ll see exciting new projects being developed in the coming years.
Vlad Panov, VP Web3 engineering, Publicis Sapient