DADS Story

Challenges & Problems

With the development of web technology, the advertising industry has changed in a more positive direction than offline advertising. However, some of the following factors should be considered when it comes to advertising displayed in web2.

Regarding data, web2 represents the overexploitation of user data by technology giants. This raises concerns about user privacy. With an aim to solve this problem, an increasing wave of user data regulation has emerged globally, as evidenced by the California Consumer Privacy Act ('CCPA"), the California General Data Privacy Regulations. The European Union (“GDPR”), Brazil’s LGPD and, most recently, China’s PIPL. However, these regulations are only temporary solutions and not really transparent. Therefore, it is not the effective solution to completely protect user data.

As consumers, they are exhausted by excessive advertising. The fact that “42.7% of internet users worldwide (16-64 years old) use ad blocking tools at least once a month. 27% of American internet users block ads. AdBlock, a popular blocking extension, is reported to have more than 65 million users”. Secretly tracking and collecting user data has contributed to growing suspicion, as evidenced by the 2018 Cambridge Analytica scandal, which made public awareness of the misuse of their personal data by major technology companies.

According to a new survey of U.S. adults by Pew Research Center, “Some 81% of the public say that the potential risks they face because of data collection by companies outweigh the benefits, and 66% say the same about government data collection. At the same time, a majority of Americans report being concerned about the way their data is being used by companies (79%) or the government (64%). Most also feel they have little or no control over how these entities use their personal information.

Currently, the web2 advertising is dependent on 3rd party cookies and cross tracking devices. But by the end of 3rd cookie tracking & its deadline to remove so-called third-party cookies to late 2023 by google Chrome. Interestingly, Firefox and Safari have already removed 3rd party cookies on their browsers. As a result, web2 display ads are becoming increasingly ineffective when users choose not to share data with 3rd parties. According to a report from Meta CFO Dave Wehner said on a call with analysts after the company's fourth-quarter earnings report. “It’s on the order of $10 billion, so it’s a pretty significant headwind for our business.” Facebook's admission is the most concrete data point so far on the impact to the advertising industry of Apple's App Tracking Transparency feature, which reduces targeting capabilities by limiting advertisers from accessing an iPhone user identifier. It is based on interest of sharing data to web2 app, but the fact that A study from ad firm measurement AppsFlyer in October suggested that 62% of iPhone users were choosing to opt-out of sharing their IDFA”. Therefore, it directly affects the effectiveness of advertising to the right audiences.

Publishers also suffer revenue loss when users limit their interactions with advertisers. Apart from receiving revenue, publishers also want to have more benefits for their users and increase user interaction on their sites.

When it comes to web3 advertising, “the blockchain in media, advertising, and entertainment industry was valued at USD 166.6 million in 2020 and is expected to reach USD 4371.31 million by 2026 at a CAGR of 71.4% during the forecast period 2021 - 2026. Blockchain is disrupting not only the existing business models but is also enabling the development of new business models, especially in the media industry.

Digital technologies are substantially transforming the global media and entertainment industry, especially in the areas of content production and distribution, with blockchain being the most prominent technological disruptor. According to Accenture, 55% of media and platform executives think blockchain is a top-five priority for their company. Also, 83% of executives plan to increase blockchain investments in the next three years.