Onchain advertising is here
How to pay for the new internet
In an information-rich world, the wealth of information means a dearth of something else: a scarcity of whatever it is that information consumes. What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention and a need to allocate that attention efficiently among the overabundance of information sources that might consume it.
Herbert Simon, Designing Organizations for an Information-Rich World (1971)
‘Ads’ are a bad word in crypto, and yet (almost) everything in crypto is an ad.
Every shared mint on Farcaster is an ad: the referrer will make a cut of the minting fees. That link in your Discord or Telegram channel to a new DEX is an ad: the poster is getting upwards of 10% of your protocol fees via a referral program. Every memecoin is an exquisitely precise ad, a self-measuring barometer of attention: the price goes up if people talk about it and down if they don’t. Crypto is more spiritually money-focused than it realizes, and more than Web2 was when it was born; the money machines were built as a desperate afterthought.
Today we’re announcing a partnership between Spindl, Daylight, Serotonin, and Collab.land: a unique union of publishers, monetization technology, and a full-service marketing agency. Altogether, it represents a first: the ability to incentivize users (and their apps) along the full stretch of the marketing funnel, from an existing consumer experience to a new (to thprotocol, with zero legacy Web2 ad tech1.
To date, there has been very little in the way of onchain ads technology. A couple of self-styled ‘web3 ad networks’ are really just very basic web2 ad tech being run on crypto-focused publishers: the banner ad running over a chain scanner or token charting website. There’s nothing natively onchain about them at all, and their ads tend to convert poorly.
There are alternatives: Companies like Addressable use the blockchain as construct targetable audiences, finding those audiences on Web2 publishers like Twitter, Reddit and the wider Web (this is the reverse compliment of what Spindl attribution does, which is why we separately partnered with them). That’s an essential bridge that will be useful as long as Web2 is around, which is likely forever.
But something new is afoot: Web3 consumer is finally happening. Farcaster is happening, its many clients like Warpcast, Supercast, and Phaver are happening. Coinbase Smart Wallets that seamlessly issue a wallet with a social login are happening. Privy and Dynamic and embedded wallets are also happening. Web3-native onchain publishers and media are finally happening. Millions of new users will be onchain, whether they realize it or not.
What this means from the marketing perspective is that while most of the onchain action so far has been at the bottom of the user funnel—users land on a project’s page, connect a wallet, and only then transact onchain—the top of funnel is finally onchain too: users can natively transact on any user interface they touch. This changes everything about how users are acquired.
Consider this: What would Amazon pay for a one-click banner ad that lets you buy the product you abandoned in an Amazon shopping cart, all while browsing The New York Times? They would pay billions and billions for it, given the impact on conversion rates. But such a thing can’t really be built using legacy Web2 technology2.
It can be so easily built in Web3 that everyone and their brother toyed around with building the crypto version of it. It’s called Frames and launched on Farcaster this past February. There are so many of these damn things running that Warpcast (the largest Farcaster client) has a Frames-specific feed just to see them all.
Now imagine similar user experience, inside a consumer app, that’s correctly targeted via a wallet-based audience informed by onchain transactions, correctly attributed via onchain measurement, and paid for by natively onchain payment rails that accept your protocol token.
That’s what Spindl is launching today with our publisher network: a unified targeting, attribution, and payment system that finally completes the full marketing flywheel.
By ‘ads,’ of course, we don’t mean the hideous and annoying banner ads or mobile popups of web2. We mean an in-context, native, and relevant sponsored call-to-action like the ones below in a popular Web wallet:
These units are created and managed by Daylight, one of our partners, which surfaces airdrops and NFT mints inside consumer-facing experiences across several leading wallet apps. Their network of wallet partners includes roughly 5 million transacting wallets, the largest such onchain publisher network.
But do they work?
Can can you deliver the goods, in this, case real paying users, while making it worth the while of the publisher?
So far, the answer is a resounding yes. The ad unit you see above, generated inside the Collab.land signin process used by over 5,000 Discords, generates a steady clickthrough rate of over 10% across several advertisers. The resulting effective CPM (the generated monetization for each such ad) has peaked as high as $50 CPMs (and no lower than $10 CPMs) with several live campaigns, far exceeding the average CPMs of a legacy Web2 ad system.
Collab.land plans to share its ad revenue with the Discord moderators, rewarding those who have kept long-running communities going, on a volunteer basis. Recently, Telegram announced it was sharing ads revenue with channel moderators ads appear, making those communities sustainable businesses.
Our crude diagram above is agnostic to the publisher: whether a conventional media publisher, a channel moderator, or an influencer. The blockchain means everyone with an audience can be rewarded for it, irrespective of scale. Something that, again, would have been difficult or impossible to build in the offchain internet.
Web3 consumer is here and someone is going to have to pay for it. Server costs are manageable when you’ve got 10,000 MAU, but not when you have 100 million. Spindl, along with its network partners, is building the means to do just that. We won’t create a new onchain internet without it.
If you’re a publisher or advertiser who wants to learn more about the network, contact us.
For more on Web3 marketing, subscribe to Spindl Blog!
For the crypto people thinking: shouldn’t this be a two-sided market, with publishers bringing their users to projects willing to pay to acquire new users? Yes, it should be…it very much should be. Stay tuned.
The closest we have to this is TikTok shopping, which invokes Apple Pay when you go to buy a product you saw in a video. There, the mobile operating system (and your stored payment credential) stand in for the identity and payment rails of the blockchain. It took a good two decades of internet to get there.