DAPPCON 2024: How Is Web3 Going To Unfuck Adtech - Eylon Aviv

Transcript

I will preface this um but I think something that is important and I think it's it's something that has come up here a lot um I think we have to transition to a phase where we start building consumer applications uh for the past seven or eight years we've been building infra bitting meta uh uh infra building abstractions and we have to move towards uh building consumer applications because otherwise we're going to continue just like circle jerking these things um and unfortunately uh I think it's like Americans who uh historically have done uh consumer applications well uh and we're we're in we have a problem

basically uh and we would I would like to see like more European companies and more uh folks sort of um trying to tackle this and AD Tech unfortunately or fortunately has uh a lot to do with this so yeah okay uh we'll start with wait one sec about ads who who likes ads in web 3 yeah no one I just you know this is like scrolling a bit on Twitter or like just Googling crypto ads and it's all scams um I mean I mean it's it's true like it's all scams it's all grifting stuff and and actually most times um like the adtech industry even if it

wasn't scams is like so counterposed to the values that we have in web 3 of like ownership and sovereignity and transparency and all that stuff it's like completely the reverse um so just to start with that and I will just quickly talk about like introduce myself um so I worked for a company called iron source which an Israeli uh adtech company uh and they sent me to China uh to sort of like help train the office there and I was there for three years uh while there you know I read about the Dow hack accidentally created the largest crypto community in China uh learned about Bitcoin learned about Dows um and then started uh uh uh I had a startup started advising crypto startups after I closed that I was a part of D xow where I see some folks here from the

Exel and now I'm with collider which is a venture fund out of Israel um so yeah um that's about me so what do you know what do you guys know about advertisements anyone knows who's the guy on the left here on the bottom left yeah no one so this is Edward bernes he is sort of like the father of public relations the father of propaganda he's the nephew of Freud and he famously if you see the woman right next to him it's the uh there was a campaign called the tortures of Freedom which you know essentially the cigarette companies saw that women are not smoking and that's like literally 50% of the market so in like he wrode the sort of feminist movement and told them to to

like light cigarettes and like uh a big feminist movement uh sort of occasion and obviously you know the sales of uh cigarettes row um on the bottom right here it's the first ad that has ever existed on the internet in 1994 um uh a banner as you can see and at the top here uh that's David benon I mean it's super controversial right now I guess but you know it's from the uh famous uh Apple ad about uh the uh um the odd ones I guess the square square pegs and round hole so I want to talk about quickly about the ryz of mobile and what happened because that's something that I know uh very well uh so I guess you know like uh the iPhone uh

in the early uh 2010s uh started there was like competition between Apple and Samsung and then uh advancements in uh chips allowed uh this to be sort of like mass produced another thing that sort of happened is like the evolution of JavaScript right like no Js cloud is has uh essentially made applications and development of applications so much simpler uh and social media with Facebook which was you know first uh on uh on the computers and on the web uh and then later as a phone on the phone became essentially the killer app um and that's kind of like how mobile evolved but one thing that people uh uh Overlook a lot is the rise of mobile attech and

the ability to sort of discover applications um realistic so there's a few things right there's uh analytics like I am able to buy a user for a dollar and I know that that user is worth a120 for me so I will always pay a dollar to get that user um and so there's there's like all these parameters like lifetime value cost per acquisition return of AD spend and sort of like the analytics industry sort of uh very much evolved uh another thing that evolved is the business model uh on the top right here you'll see um wow it's a cut but it's uh or is it's very small so like this is the share of uh applications that are paid right less than 10% in both Android and iOS are

paid applications what does that mean how does the developer make money uh and I saw it firsthand especially with games uh that you know you develop a game but no one's really paying no one's uh uh buying in a purchases stuff um so the result is that these guys had no way to monetize uh and using ads and this is really came up in like 2014 with things like I guess you know like premium and stuff like that it new sort of like ad formats emerged and these ad formats were like you know the uh thing in the middle here um you can either buy five more lives or you can watch a video and add and then uh get another life you know on candy crush or something of that

sort so like it sort of changed uh the changed how um these things worked um and so this is not sort of like without problems right and you have a Zuckerberg here you know that says you know the more of your data I gather the more I understand what it means to be human right um Facebook and Google uh controlled essentially all of the uh uh ad market and then more most recently Apple killed idfa and Google is probably going to have to follow suit uh which was like the ability to Target people across the web so right now apple is going to ask you to for permission to actually track you um and the atch

market is growing blah blah blah like you're obviously understanding this everybody knows uh so my take is that um uh web 3 is going to dramatically affect how the atch market is going to look like and how it's going to grow um so kind of like history Rhymes just like the rise of mobile I think we are uh at a point where we have ux substraction with like smart accounts uh uh and stuff like that what was actually previously talked here and even with like pwas I like this quote from uh from Kane uh you know crazy how many problems we have solved are about to be solved for uh deploying crypto projects because in his time when he deployed synthetics you had to build everything from scratch all the infra so now you have like the graph you have Alchemy you have all these Eva

modules you have all these uh uh wallet abstractions um and finally the uh stack to discover applications to figure out what is out there is uh is emerging you know there's like U audious definition and analytics uh there's attribution uh there is AD matchmaking in delivery and there is Discovery um and the last thing I want to say is that you know when I first started and I came here and I said like ads like the initial reaction from everyone is like ah no not ad it's what I call like a severe allergic reaction um and the reality we just I think we have to re branded in crypto and we'll talk about this in a bit but what about the word incentives I think it's like

very apt so how is web through going to change atch uh I think one of the things that happen uh that we can do in crypto is um we have alignment right we can uh set some standards and we can set uh shared ownership imagine there's like an ad Network and everybody who's seeing ads is a part of that ad Network they have tokens in it or you know whatever uh uh sort of ation uh you want uh and this is this essentially creates trust so right now uh the things that we have to do that is like you know um like airdrop and liquidity mining um and that's just a form of advertising that is very very bad because we want we didn't want to do like advertising um

another thing that this will sort of like enable is you know recurring engagement you can uh directly uh connect with the wallet or the person who uh you are sort of uh targeting and yeah like I mentioned kind of like optin Frameworks if I give in more of my data if I can share more of what I'm doing online maybe I will get um you know a bigger share of of the rewards that uh uh I'm supposed to get and a distribution and ownership in the net in the network another thing that is a bit overlooked is who remembers the ribbon Finance uh sort of like thing where their airdrop uh was farmed by one of their VCS who remembers this show fans no one yeah so yeah you know they came up yeah they like one of the

receipts basically created like hundreds of accounts and essentially farmed their uh airdrop and one of the biggest problems in attech is fraud like you know if you get paid to download an app then you know people are going to massively sort of like inflate that and try uh um to sort of make a shitload of money and so what happened here is because it's transparent because you can uh you know look at the blockchain and see sort of like what happened they were caught uh and they they weren't just caught their intern was using their ens name and it was very easy to sort of like follow them and it's just like a whole thebco um so yeah so like I said before instead of calling it ads we should call

it incentives um and want to touch a bit on like how is this going to look like um so I think we can have Dynamic incentives what I would call so imagine if you have some on CH Behavior if you're awale you'll be incentivized to maybe provide liquidity if you're not awale maybe you'll incentivized uh to just trade on the platform um uh or you know this could be um your progress in a game what you can do in other places and the fact that you have uh such a rich place with data which is your wallet and you know you can read and you can uh figure out um according to the things in the wallet what might be interesting for

you um I think that opens up to like a lot of different things um another thing is like uh you can create like interactive things that are cared specifically to you um you can do like social graph based rewards right if I am sharing something I mean it it's kind of already happening like with referral programs but if you can uh like bake this into like I don't know my foraster uh social graph and the more uh people come through my uh forecaster ID um then things could look like a lot more interesting um and yeah obviously like limited reward stuff you know all of these things are already happening but standardizing this could be like super interesting like okay the first 100

people that share their eth address can get this NFD or you know stuff like that um so I'll give a few examples I don't know if you guys know I put you guys in there um so uh on the left here there's uh on foraster someone put uh essentially uh an an ad and the space is for sale uh it's completely static it doesn't really read your wallet and our forecaster what you can do uh as soon as you interact with the frame you can uh see the the wallet address uh and then if you have the wallet address you can see what they've done uh and then you could customize what is the ad that they're seeing according to the wallet uh we have the folks here from Outpost that if you're not uh already on it it's

essentially uh uh let me know if I butcher it but uh a wallet based uh newsletter so it reads what you have in your wallet uh and according to what you've interacted with or according to your the communities you're a part of it will show you a feed of what they think is interesting for you uh from across sort of the web and then you have uh coinbase which they have a spotlight uh which you know according to what you are according to what you've done in the coinbase wallet you'll be offered to you know m u mint Shield Basics NFD because you've done some uh like basic things um yeah I think in general like this shift is sort of taking the web three values

of ownership and transparency and that type of things and baking them into some of the most dystopian industries that we've ever had like what created the most amount of of spying on people and you know generating uh data that people don't even know that they've been collected on right like everybody knows this thing where you know they would say giraffe with their phone with their friends on the phone next to the phone giraffe giraffe F and then they'll see like ads to go to the safari or something um and like these things have happened so like these um like what we can do with web 3 values can actually change how uh how shitty and I guess disgusting etic has been um another thing it's kind of like we are

changing uh uh how sort of like value is distributed um one sec yeah uh and how we sort of like value attention like if right now in Google and Facebook I don't get anything right I see an ad maybe the uh Facebook gets some money from the public from The Advertiser but I'm not I don't get anything from that uh and now you'll be able to sort of like be a part of this puzzle um um and yeah I think like web 3 right now it's sort of like a teenager in adolescence which doesn't really know anything about himself and the world and now we're finally getting uh to some like data driven stuff we're trying to we're we're beginning to quantify uh

like our users and how to get them and how to grow them um and this I mean this has to happen this has to happen if we want the industry in in of itself to scale um and yeah just like uh game mobile game developers couldn't monetize if they if there weren't any ads uh so so will many websites and so many Avenues in crypto will be able ble to monetize through showing like targeted incentives uh inside their platforms so yeah that's it any [Applause] thoughts yeah

yeah um do you think it's possible to create like one um profile for a user for a web through user because what you said is that you have uh the data from your wallet but I have like three different wallets I have my L2 wallet I have a coinbase metam mask so how is it possible to create like one profile a user profile to so I think I mean I think that this is a problem I have like 20 honestly uh like 20 wallets that I use for like different things uh because I so like value privacy um and like this is a very interesting question on how this is going to work do you I'll comment this from the other side do you

do you even want to be targeted by a wallet I mean that's kind of like it has your financial history it's kind of like this entire complex thing of um like I don't maybe I don't want people to see everything they have done on chain and then how do you interact with something like this um and and I I mean ssmo tried to do things like that like back in the day with like ZK proofs I'll be able to prove that I have an ape on some wallet because I sign a transaction without proving like which is the wallet for example um they're not doing that anymore uh and I think maybe it was kind of like an Overkill uh to do that but at the end of the day like you know these guys you can

ask them from Outpost this is kind of the question that I asked them yesterday cuz I connected with one of my main wallets um that has like most of my interactions but you know I have't another wallet that's you know not in that so can I add that wallet to uh that list or maybe can I add like multiple wallets um that's something to be seen and then maybe you want to create an abstraction for that maybe you want to okay I'm going to Mint an nftd that represents my wallet history and then I can update that nft uh according to sort of like what is continuing to happen what else I'm interested in um I don't know how this is going to turn out um so yeah does that answer the

question yeah hi um I guess another question is also related to cpms that are being paid currently by advertisers for example we ran a site we run a site uh with I don't know thousands of visitors and um anyways our impression was that for example the CPM that we get from um from these ad I guess like advertising dealers or whatever is actually very low so if I would spend with my co-founder some time uh building um a feature that allows me to Mint an nft or whatever like something that my

users like I might make more easily money doing that instead of uh selling ads on my website because at the end of the day connecting a wallet is actually so much less fre once you have connected it compared to let's say putting a credit card into a website right yeah and and stuff like that so so I also wonder guess I wonder what what is your how how do you think that will develop considering that it's so easy to spend money on web 3 that I feel I almost feel like maybe that just I don't know it just really shifts the Dynamics yeah so um yeah so so to start with I actually think like CPM like CPM

is like cost per Mill so cost per usually a thousand Impressions um I think that's sort of outdated and we're going to shift like it's already been shifted to like you know this cost per click CPC and then there's C per install like in an apps and then there's a even deeper which is like cost per action so this means that if I am an Advertiser I'm going to pay for a certain action that user does and let's say you know the the easiest example is uh I don't know I'm about to trade on on Unis swap for example through my coinbase wallet and coinbase knows that I'm about to do a transaction that maybe cow swap wants to offer me to do the same transaction through cow swap but um you know they know that they can they can give me a

better price because cow swap has solvers and you know that type of stuff so I think it will Trend towards that and then kind of it will still be in the flow of the onchain stuff uh right it will still be like I I am like trading I want to switch from usdc to Ether or or whatever uh and I'll be able to be quote unquote intercepted in a very good time um to uh uh yeah to go somewhere else and you know cow swap is willing to pay maybe a dollar or two to both you know the wallet and then maybe the user as well hey you're going to get a rebate in gas or something like that uh so I think it will Trend to these type of things um

actually I forgot I wanted to say an example um that when I was in China there was uh I don't know if people remember like there used to be Android devices where you would uh click to clean the cash of the Android device right and so I was working with like the biggest Chinese company to do that and after we iterated on a bunch of stuff and like how to show the ad when to show the ad and you know this is what we learned in retrospect but what we landed on was like you go and clean and it goes and it says like ah 150 megabyte cleaned the rocket flies whatever and then it's like you get like a presentent the President says would say we have something for you like and you know the conversion rate of that was

insane because you met the user in a very very good psychological Point uh later on we sort of like uh reversed engineer that and we're like oh okay so why does the user clean his phone because he's bored they're bored they're going to go to the cleaner clean it they have nothing to do and then it's like oh yes exactly I wanted to play that game or you know I'm already in a state where I'm more open to see an ad uh so I don't know where those points will happen in crypto like I don't know yet but this this just requires like a lot of iteration and once this happens I think we'll be able to sort of like reverse engineer that things like oh yes of course when the user did this or that it was the best time to show them uh Samad

yeah you want to guess maybe to um yeah thanks for that perspective I think uh maybe what I wanted to suggest was that since web 3 allows you to more easily monetize and often times in web 2 anyways I think it was kind of difficult to monetize um and just to make an example to there's like probably no spindle this like Tech web3 startup they had a an ad on coindesk today and I actually failed to read the ad uh to to to read the

article on coindesk because it was full of ads so I clicked away actually so and the the reason that coindesk has all of these ads is because they need to pay the people that write the Articles and maintain the site and I guess what I'm saying is that do do you think that the ad space will uh continue to have this like uh huge role in um in like the web and and Tech and so on or do you think for example that this will start to play less of a role considering that everybody can now more easily monetize in other ways um you know alternatively to running ads like coin B coin Des could sell nfts coindesk could I don't

know financialized with a token or whatever so they would actually never have to uh sell ads like that you know I mean that kind of implies that ads are inherently a bad thing which I don't think so like uh I agree there are more ways to monetize but still if you're like a data play like I don't take a website like deep Dow or defi Lama which is like these are both great great examples they they they've built something super comprehensive but how are they going to monetize this like in a reliable way uh but something like def if you go to check out the staking page or if you go to check out the fundraising page right they'll be able to give you something that is fairly curated to probably what you need um so I think like to meet the user where he is at at the right time is

important because people want to discover new applications people want to do like uh more consumer stuff and without that we're we're going to be kind of stuck uh in my opinion so I think it should be um it should remain and yeah grow and maybe you know be a bit better than what it is today y thank you