Digital Social Economy: Web3 Is Reshaping Online Ads by Rewarding Users for Their Attention

In 2023, the global advertising sector surged to a remarkable $647.3 billion, as reported by Impactful Insights. Forecasts from the same source project even more growth, estimating the market size to soar to $978.5 billion by 2032, with a growth rate of 4.6% from 2024 to 2032. The growth of the advertising sector has been attributed to several factors, including the utilization of artificial intelligence, the emergence of Web3 innovations, and the ongoing expansion of online platforms. Notably, big social media platforms and houses share a significant portion of this revenue, but little is shared with the users and advertisement consumers. 

The advertisement industry is undergoing a profound transformation in revenue generation with Web3 playing a pivotal role in introducing new monetization strategies that are changing traditional revenue models, and opening fresh avenues for content creators and users. Users are able to earn through content tokenization through monetization of their social interactions with ads.

Web3 ad players have built reward-based advertisement protocols that convert users’ social interactions into income streams. Decentralized technologies are able to offer alternative options to traditional social media networks run by centralized corporations that have dominance over user data and content distribution. One such company, Everyrealm, a social gaming platform, has launched a blockchain-enabled discovery and rewarded ad-serving protocol called Everyworld. The platform allows users to earn points for engaging with digital content like watching video content in Discord. In an X post, the company wrote, “In Everyworld, you can get rewarded for watching content from new games and apps.” Unlike traditional social media platforms, Everyworld compensates users for their social activities, providing a new income stream. 

Decentralized platforms and content creation

One of the key advantages of decentralized platforms is the ability to reward content creators directly through token incentives. For example, platforms like Steemit and Hive leverage blockchain technology to compensate users for creating and curating content. These platforms incentivize quality content creation by rewarding based on engagement and contributions, fostering a more equitable value distribution among users. For instance, Steemit rewards users with STEEM tokens for their engagement by curating and publishing content on the Steemit platform. 

Unlike conventional social media platforms like Facebook or TikTok, Web3 social platforms like Zion, a blockchain-based social network, enables users to maintain control over their personal data while earning from content interactions. Developed under the Bitcoin Lightning Network, Zion users can engage in forums to share content, post comments and — receive compensation for their contributions. In an interview with Bitcoin Magazine, Justin Rezvani, CEO and founder of Zion explains its functionalities, “Every person on the network is running a full Lightning node and it's a true peer-to-peer network. It's not a centralized system. It's not like a traditional website. It's actually peer-to-peer nodes, peer-to- peer computers, communicating through an open-source protocol, which is the Lighting Network.”

Tokenization of engagement and social interactions 

In the digital social economy, tokenization — the means of establishing ownership or value via digital tokens on a blockchain — is introducing monetization of engagements and social interactions. Everyworld Protocol recently raised $60 million, supported by venture capitalist mogul, Andreessen Horowitz, and is rewarding $EVERY token to its users. Contrary to legacy online ads that do not compensate users for viewing or clicking them, Everyworld rewards points entered into a draw and may attract monetary value as the $EVERY token trades. 

Furthermore, the winnings are split between the users and environmental conservation initiatives. This model blends the allure of winning prizes with the collective impact of pooling donations to influence social change. In this context, Everyworld has partnered with notable social-based organizations, such as, The Ocean Cleanup, IUCN, The Nature Conservacy, and more to drive environmental initiatives aimed at improving our planet. 

Azarus, another Web3 gaming network, has a similar token-based reward mechanism for games streaming. Its website defines the network as a platform “designed to reward fans for their time and engagement in helping their favorite streamers grow, and to provide those streamers with a new way of building revenue as they work to entertain and engage their audience.” Like the Everyworld approach, the Azarus network rewards gamers with Azacoins while participating in online games, a unique currency usable for redeeming items in the Azarus Store.

The future of Web3 advertising 

As Web3 continues to evolve, decentralized ads delivery is set to change this sector. Advertising platforms built on blockchain technology can utilize smart contracts to guarantee that ads target users who match specific attributes, such as age, content preferences, location, or past purchasing behavior. It brings transparency and efficiency to the advertising sector as firms can target specific audiences, thus cutting costs for advertisers. Furthermore, blockchain technology promotes trust in the ad space as decentralized platforms move data away from centralized players, delivering enhanced data privacy for users and integrity for advertisers.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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