Web3’s Promise: Ethical Ads Redefining The Digital Advertising Landscape

Traditional target advertising techniques are being kicked into touch by the emergence of Web3 ecosystem providers such as ReneVerse and Verasity, which have created more ethical and transparent methods for delivering personalized ads to consumers. 

Digital advertising is a big business, with one report from Statist forecasting that the sector will be worth $626.8 billion globally in 2023. It has been so successful that it has long since surpassed the traditional advertising sector that was focused on print media and television, transforming the way brands engage with their consumers. 

Web2: Targeted Ads Erode Privacy

The key to digital advertising’s success is the unique way in which it accumulates information about consumers in order to target them with more personalized ads than are possible in print media and, to an extent, even TV. Targeted ads are delivered to audiences based on their internet browsing habits, which are stored in large databases owned by big internet companies such as Google, Facebook and Amazon. Ads are targeted at specific demographics, based on their location, age, tastes, preferences, relationship status, sexual proclivity and more. 

Targeted ads are clearly more efficient. Indeed, McKinsey says that brands that engage in data-driven advertising are up to 23-times more likely to attract new customers, and they are also better at retaining those people too. However, the success of targeted ads comes at a steep cost in terms of consumer privacy. The online advertising giants have acquired extensive data and knowledge of people’s lives, and this doesn’t sit well with most internet users. 

Adding to the fears that our data could be misused, there is also the risk it could be stolen. That’s because the internet giants tend to store this information in enormous and centralized data centers that are a prime target for hackers. There have also been cases where database owners sell the information they have accumulated to third-parties. 

This has resulted in legal action in some jurisdictions. Earlier this year, Meta Platforms – the parent company of Facebook, WhatsApp and Instagram – was fined $1.3 billion by the European Union for violating laws on consumer privacy. Google has also faced legal challenges for similar privacy violations. 

Web3: More Ethical And Transparent Ads

The paranoia around data misuse means there’s big potential for Web3 to transform the digital advertising industry with more ethical and transparent business models that return control and privacy to consumers. 

The secret sauce of Web3, which is touted as a kind of decentralized internet, is that it’s built on blockchain systems that are public, immutable and transparent. Information stored on the blockchain is encrypted and hosted across numerous independent nodes, rather than stored on a centralized server that’s owned by Google, Microsoft or someone else. 

Due to decentralization, Web3 can power a digital ad ecosystem that’s more flexible, extending into areas such as video games, television, healthcare and more. Due to this, Web3 ads are sometimes known as “intelligent ads”, but the real advantage is that they can help to ensure better privacy for users. 

Because Web3 advertising is based on the blockchain, such systems offer greater transparency. The data mining process that underpins all advertising is made much more transparent, and consequently becomes more ethical, as no one wants to be seen as if they’re manipulating consumers. It allows brands to make data-driven decisions without breaching privacy rules, yet these systems are intelligent enough that they can be incredibly effective. 

One project, called ReneVerse, has created what it calls a “borderless” advertising framework that can be extended across multiple platforms. ReneVerse is the creator of a Web3 gaming ecosystem, but it has also created an ecosystem that enables businesses, developers and video gamers to interact across multiple games. With its borderless ads, ReneVerse provides developers with a way to create advertisements as digital assets and deploy them in any game within its platform. 

So a brand such as Coca-Cola might create a can of Coke that serves as a power-up for players in a fighting game, while appearing on billboards in a racing game. Because ReneVerse ads are digital assets, they are versatile enough to be deployed in almost any video game setting. 

The other advantage of Web3 advertising is that it promises to reduce the plague of click-fraud that remains ever-present in Web2. Verasity, which has built a blockchain-based service that enables digital ads and payments with greater transparency and trust, said in a 2021 study that click fraud is likely costing advertisers $44 billion per year. 

To prevent this from happening, Verasity has developed a unique “proof-of-views” mechanism that can determine if a real human viewed each advertisement. By using Verasity’s system, brands can eliminate wasted ad spend by ensuring that they’re only being charged for valid views by real humans. 

The Future Of Targeted Ads Is Decentralized

For the digital advertising industry, Web3 provides it with an opportunity to transform itself and increase its standing among consumers, while achieving better results from its campaigns. 

Web3 projects like ReneVerse and Verasity have only just begun to illustrate the advantages of more transparent and trusted advertising, and digital marketers would be advised to follow them with interest. As Web3’s adoption grows, we can expect that more consumers will begin to demand greater transparency from brands.