Web3 advertising platform AdEx has announced the development of a privacy-preserving ad-targeting engine based on zero-knowledge technology. AdEx will now introduce “ZK targeting” into its platform once it launches in 2024. The incorporation of zero-knowledge technologies into Web3 advertising represents a seismic shift from the intrusive nature of Web2 models.
User privacy issues with digital advertising solutions (or adtech) have been a long-running problem. As we’ve moved to spending more of our lives online, advertisers have gained the unprecedented ability to target ads to the level of individual preferences. However, this comes at the expense of user privacy, as it involves tracking online activity and sending data to advertisers. Blocking tracking cookies is one option, but it doesn’t stop websites from serving ads – it simply limits them to generic, non-targeted placements.
AdEx harnesses Web3 technology to give more control to users, but crucially without limiting the ability of advertisers to deliver targeted ads. The project has now announced the launch of AdEx ZK, which is based on zero-knowledge technology. This allows advertisers to target ads to users based on an opt-in arrangement where the user has control over their ad preferences without having to disclose their browsing activity or personal data.
Benefits Beyond Privacy
The AdEx ZK solution addresses the key user privacy issue that faces the digital ad sector, but AdEx points out that it offers other benefits, too. By allowing users to opt in and curate their own ad feed, there’s a lower risk of ad fatigue. Furthermore, AdEx users can earn rewards for viewing adverts, helping to enhance engagement and click-through rates. Since it’s based on a direct connection between advertisers and publishers, AdEx is also able to offer its services with lower fees. Finally, it’s a fully compliant solution. All data is retained on the users’ own device and never shared with advertisers or publishers. In this respect, it actually reduces the burden of complying with regulations such as the GDPR, since nobody is acting as a data processor or controller of any personal data, even in an anonymized way.
AdEx’s launch could prove to be timely, as privacy and surveillance concerns around third-party cookies are overriding the imperative to deliver more targeted ads. Google recently commenced testing for changes to how companies can track user browsing activity, introducing a new feature to the Chrome browser that disables third-party cookies. Although it’s initially only available to around 1% of Chrome’s three billion-strong user base, the firm plans to roll out the changes to all users later this year. With advertisers complaining that their revenues will suffer as a result, it could mark a shift towards Web3 solutions, such as AdEx, if firms decide to seek alternative solutions for generating ad income.
AdEx has confirmed it will introduce AdEx ZK shortly after its platform launches in Q2 2024.