As a long-time observer of the digital advertising landscape, I have seen the traditional model become increasingly stale and intrusive, with users feeling bombarded by irrelevant ads that offer little value in return for their time and data. However, the emergence of Web3 protocols offers a tantalizing glimpse into a future where advertising is not only more effective but also beneficial to both advertisers and users alike.
For decades, product developers have needed to go through tech giants like Facebook, Google, Instagram and TikTok to market their products.
If they didn’t pay up, they wouldn’t be able to reach their audience.
According to a report by Axios, it’s projected that the long-standing, centralized ad industry will bring in more than one trillion dollars in earnings by the year 2025.
Simultaneously, ads displayed on these platforms frequently fail to align with users’ preferences, leading many to perceive them as unwanted, spammy content.
On the other hand, certain Web3 protocols are striving to revolutionize this sector by offering an improved method for connecting products with consumers. Unlike traditional methods that bombard individuals with unwanted interruptions, these protocols employ token-based incentives and a user data ownership model to attract users to explore novel offerings.
Providing value to users
As an analyst, I’ve come to understand, following Brandon Kumar’s perspective as co-founder of the Web3 aggregator Layer3, that the core issue with conventional advertising lies in its return of minimal value compared to the substantial investment of user time and effort.
He expressed to CryptoMoon that when he’s targeted with advertisements on Facebook, his sole benefit is perhaps customized ads. However, he emphasizes that he derives no value from this, even though he spends considerable time and contributes significant value to the platform.
Due to the perceived insignificant benefits offered by conventional social media platforms, numerous Web3 users seek play-to-earn games and other applications that deliver greater value for their invested time. Furthermore, some users possess assets they wish to increase in value through speculation and trading. Regardless of the approach, locating profitable apps can prove challenging.
Initially in the world of cryptocurrencies, people mainly depended on Twitter as a platform for discovering new protocols. However, according to Kumar, this method was inefficient as it primarily focused on what appeared appealing on Twitter, which might not have accurately represented real-life situations.
Approaches have been taken to connect with users via methods such as airdropping tokens or “mining liquidity,” granting tokens as incentives for supplying liquidity. However, this practice has resulted in the token’s value decreasing significantly. As Kumar put it, such actions are equivalent to burning money.
According to Kumar, the key to solving this issue lies in giving incentives to those users who are most likely to bring value to the protocol’s environment.
“If you have a token, you can use your token to incentivize users in a targeted way. If you don’t, you can spend fiat. And what we do is we take that, and we route that to users who are going to have high retention likelihood probabilistically in your protocol, will spend, will retain, have high wallet balances and meet your kind of target demographic,” he stated.
In his opinion, it’s possible by examining a user’s blockchain data, a factor often overlooked by conventional social media sites.
Kumar asserted that Layer3 not only assists users in earning token rewards, but additionally tailors content according to user behaviors, offering a supplementary, non-monetary advantage to the users.
Furthermore, I’ve observed that some newcomers to the cryptocurrency realm utilize our platform to expand their knowledge about digital assets. Consequently, it also functions as a learning tool or educational resource.
Apurv Kaushal, a partner at Intract – a platform for Web3, acknowledged that the unique value proposition of airdrops in the Web3 space poses a hurdle for conventional advertisers. To put it simply, he expressed this as: The innovative approach of airdrops within the Web3 sector creates difficulties for traditional advertising methods.
“You have a big intermediary in the middle, like a Facebook, that ends up controlling a lot of the budget flow that happens in Web2 in terms of advertising […]. Neither the company nor the users get the best deal because their data is being controlled by Facebook and all these other organizations. [But with airdrops,] the users actually get a cut in the company’s shares or tokens for contributing early to them.”
It’s become increasingly apparent within the industry that airdrops can sometimes be less effective, as Kaushal noted in the past six to seven months, “There has been significant debate about airdrops not being the most suitable method for a company to attract high-quality users.
To ensure that protocols don’t distribute tokens to low-value users unintentionally, Intract employs a method known as “selective incentive allocation,” Kaushal explained. This approach takes into account a user’s past online credibility (onchain) and their offline social data to determine if they qualify for a reward.
One example Kaushal cited is Intract’s “proof of humanity” feature. Protocols that are worried about bots infecting their platform can verify a user’s humanity through a variety of methods.
As a crypto investor, I’ve noticed that while this platform doesn’t prescribe a specific definition of humanity, it does set certain standards for users. Some protocols might be lenient, asking only for a Google account, whereas others might impose stricter conditions like a verified account at a cryptocurrency exchange or even a Worldcoin identity.
In essence, providing evidence of being human enables protocols to distribute incentives to users, all the while reducing the quantity of poor-quality prospects, as Kaushal explained.
Video games as an ad platform
According to Jonathan Bozanquet, one of the founders of Playa3ull Games, it’s expected that video games will significantly change or challenge the conventional advertising landscape in the near future.
In the early stages of his life, Bozanquet pitched the concept of video game advertising to both Sony and Atari.
“I had Sony and Atari. We were talking to them about a company we wanted to start called Video Game Advertising, because all the games, even today, no games have actual advertising in them. So, our thought was, you’re playing a game, and you pick up a pair of shoes that make you jump higher. Why aren’t those shoes Nike or Adidas? Or, you know, some other brand that wants to move up the ranks? You drink a drink that gives you more power. Why isn’t that Coca-Cola or Red Bull or whatever?”
Despite neither of the companies putting the concept into practice, Bozanquet maintains that video games could serve as a balance against the overwhelming influence of social media corporations and search engine giants. In his view, adverting within video games offers an opportunity to bypass conventional advertising methods.
At the moment, Playa3ull is developing thirty distinct Web3 video games. According to him, every game employs the same 3ULL token within its internal market system. This arrangement increases the usefulness of the token as each game is launched and attracts a larger player base.
Bozanquet mentioned that as of now, no advertisers have been secured for the project. However, they aim to approach them towards the end of 2025. Once advertising revenue starts flowing in, a part of it will be allocated towards marketing the games. This could attract more players and enhance the token’s functionality even more.
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2024-11-27 16:41