Fixing Web3’s Ads with Attribution 📺
Hello!
Roman Storm's crime? Writing code that made blockchain transactions private. Now he faces 45 years in prison in a case that will decide the future of cryptocurrency development. The trial that could kill DeFi starts July 14.
Check out yesterday’s edition to know more.
Every Saturday I dive into a podcast by our partners at Decentralised.co and share what caught my attention.
This week, I'm reflecting on Saurabh Deshpande's conversation with Antonio García Martínez - and it left me both excited and terrified for the future of crypto media.
Listen to the full episode here.
Antonio’s stint in the ad ecosystem has spanned multiple generations, quite literally. He’s seen advertising evolve from analogue platforms like newspapers to digital ones in the Web2 world, to the crypto ecosystem in Web3.
He built Facebook's ad targeting system that generated over $160 billion in 2024. Remember seeing a holiday ad right after engaging with your favourite travel blogger’s posts? Well, Antonio can be "partially blamed" for creating the foundation of that system.
He also co-founded AdGrok, a venture-backed startup that automated Google AdWords advertising and was later acquired by Twitter.
After leaving Facebook, he wrote Chaos Monkeys - a brutal exposé of Silicon Valley that became a bestseller. He worked at Apple, went off-grid in Ukraine, and eventually got "crypto-pilled" during the bear market.
Now he's building Spindl, which Coinbase acquired in January this year, to solve problems around advertising and attribution in Web3. He feels “growth marketing” and things around growth in the ecosystem are completely broken and he “felt the need to fix them".
Antonio dropped a worrying observation: when he started talking to Web3 project leaders a couple years back, they couldn't answer basic questions like "What's your customer acquisition cost?" or "What's the lifetime value of a user?"
Every successful internet company has these numbers drilled into their CEO's brain. Then the problem is likely that a lot of these leaders enter the Web3 space with little background or knowledge in marketing and growth, unlike Antonio.
Crypto has survived on two unsustainable models that need solving: Either projects raise massive VC rounds and burn through cash, or they launch tokens hoping speculation creates enough value.
Antonio feels Web3’s problems are opposite to the problems in Web2.
“Monetisation on Facebook was quite poor for a long time. But there was huge consumer adoption for Web2. In Web3, monetisation can be easy … but consumer adoption can be quite low."
Even though every user spends a lot more in Web3 compared to Web2, there aren't just enough of them.
Antonio's core thesis is that Web3 can benefit from attribution (tracking where valuable users come from) better than Web2 because everything happens on a public ledger. When someone clicks an ad and swaps tokens, you can see exactly what happened and how much value was created.
For instance, GMX, the perp exchange, gets one of the highest referrals from CoinGecko, a token price tracking platform. In Web2, if you click a Facebook ad and buy something on Amazon, Facebook has no idea if you purchased anything. In Web3, the final action is all visible on the blockchain. So, if you can match Web2 and Web3 identities, you have a very powerful attribution system that tells you about all the user’s touchpoints until the final transaction. And all of them can be compensated based on their contribution.
But this makes me think of a philosophical argument crypto purists may have.
The reason crypto users choose pseudonymous wallets isn't because they wanted better ads - it's because they wanted to escape the surveillance capitalism that Antonio helped sow the seeds of at Facebook. When he talks about running “sponsored content" in wallet-aware experiences, isn't this exactly what crypto was supposed to get us away from?
The irony is that ads pay for the internet. Without ads, many internet businesses will break down. Alphabet Inc’s Google made $264 billion from ads in 2024, that’s 75% of their total revenue. Without advertising, most of the free content we consume wouldn't exist.
Read: Web3 Attribution & CPV: Rethinking Ad Value Online
Web3 is a subset of the internet and can’t get rid of ads magically. What can happen is that with better attribution systems, you will see way more relevant ads that might actually be useful.
Are there alternative models, then? Web2 did try out micropayments, which Antonio dismissed as a "bad monetisation idea" that's failed repeatedly.
"Nobody wants the mental decision of ‘Oh, do I pay 10 cents for this article?’” he said.
One of the reasons micropayments failed in Web2 beyond just decision fatigue was the friction of entering credit card details for a 10-cent purchase. But sending 10 cents from a crypto wallet takes one click.
We're already seeing this work with creator tokens, NFT mints, and tips on Farcaster. For the first time in internet history, we have native payment rails built into the medium itself. I wonder what then could make businesses on Web3 want to go back to advertising when users can actually pay for what they consume instead with minimal friction and thought to the decision.
Maybe the future isn't crypto media supported by ads alone, but by a mix of multiple models.
I think Web3 will have a three-tier system.
Premium set of users preferring direct payments via subscriptions, micropayments, token gating
Mass market apps using Antonio's advertising approach when crypto reaches billions of users
Hybrid models letting users choose between paying to remove ads, or seeing offers for free access
I think Antonio's attribution technology will have a spillover effect in Web3. Not just for advertising, but attribution will be far more valuable across Web3 applications for token distributions, creator payments, and governance in decentralised autonomous organisations (DAO).
The benefit of attribution is likely to be beyond revenue in Web3.
Antonio said crypto represents "a radical attempt to decouple ownership and value from the state." Unlike Web2's black box advertising systems, what he's building at Spindl is transparent as everything happens on a public ledger that anyone can audit.
This transparency changes how advertising could be looked at in Web3. Publishers can see exactly how much value they're driving for advertisers. Users can see what data is being used. Advertisers can measure real on-chain actions rather than guessing at conversions.
Web3 advertising infrastructure will give all participants more control and visibility. When he talks about users potentially swapping out hot wallets to break tracking trails, he's acknowledging that user sovereignty remains intact.
Antonio is building the measurement layer that enables sustainable crypto media, whether that's through advertising, micropayments, or hybrid models we haven't imagined yet.
That’s it for this week.
See you next week.
Off to contemplate the irony of writing about user sovereignty in advertising while considering advertising partnerships,
Want to hear Antonio's full argument about how attribution will benefit Web3? He also talks about how the likes of the SEC and Fed look at something as permissionless as a blockchain.
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