Blockchain may be a relatively new technology, but it is already disrupting a number of industries across the globe.
What’s Blockchain?
A blockchain is simply a database with information that can be shared over the Internet but cannot be easily modified or deleted — think of it like Google Docs for transactions. It utilises cryptography to make sure that records in its ledgers remain valid and permanent in the entire system.
Why is Blockchain Important?
Some people are calling blockchain one of the most important technological discoveries in recent years. After all, it decentralises important information and provides a public ledger – meaning that security is taken care of automatically.
Blockchain marketing also has some other pretty neat perks:
- It’s much cheaper to use than standard payment systems – especially for larger transactions (paying your employees would be a great example). This means that you’ll have more to spend on marketing.
- Anybody can use it – you don’t need a bank account to participate in blockchain transactions, so this is a great way to help people who have been locked out of the traditional banking system.
- It’s Accurate – it helps business owners get an accurate idea of their financial situation at all times, without relying on a third-party authority.
It’s proof against corruption – your transactions are recorded on the blockchain ledger, so you don’t need to worry about somebody fudging the numbers or going back and changing what they did.
How Does It Work?
The blockchain process is actually pretty simple – all you have to do is maintain the integrity of a block, make sure it is complete and then forward it on to the next person in line. For this process to work, each transaction has two addresses – one for sending currency and another for receiving.
The sender’s address will be passed along to the miner who will complete the block and add on another transaction. This is done by solving a very complex mathematical equation that will use that sender’s private key for identification.
The smart contract would be set up to send out payments once this process has been completed, but if there are any problems with your transaction, then you’ll get notified immediately.
The Connection Between Blockchain and Digital Marketing
Blockchain technology is gradually penetrating almost all facets of our world. It has allowed us to take a quantum leap, surpassing the limits set by traditional technology.
In modern business, digital marketing is an essential tool for success. It can be said that blockchain and digital marketing are two sides of the same coin; they work together in many ways.
Today’s digital marketing is one of the key factors in business growth and success. In today’s world, you are only as good as your reach on social media.
Blockchain Technology to Fix Digital Marketing Issues
Nowadays, people are concerned about their online protection and confidentiality while surfing the web. Blockchain can provide an answer to these issues, and thus a solution to the problems faced by digital marketers.
There are several ways in which blockchain can be used to improve digital marketing:
- Digital payments – This is the most obvious way blockchain is applied in digital marketing, using cryptocurrency for transactions on an exchange platform or some other program/system. There is no need for third-party entities to intermediate a transaction, and they ensure that it is carried out safely. This reduces the number of participants needed for conducting digital marketing campaigns.
- Transparency – Blockchain can be used in digital marketing to give consumers full information about who exactly conducted any particular campaign and how much money was spent on it. This would eliminate most of distrust between customers and businesses.
- Authenticity – Blockchain technology can be used to prove the authenticity of any product, including organic products. This would increase trust in your business and promote better customer relations.
- Personal Digital Advertising – As you know, many people use ad blockers on their browsers or other software when surfing the web. Advertisers lose money because of this. Blockchain can be used to create a system that does not require third-party intermediaries and ensures the privacy of users.
- Development – Blockchain technology has the potential to revolutionise digital marketing in many ways, including developing an entire new industry with social media platforms that do not require third-party intermediaries or any kind of artificial inflation of user popularity (as is often the case with Facebook).
- New forms of marketing – Another great benefit for businesses that are planning to use blockchain technology in digital marketing is the ability to create new forms of interaction and promotion with consumers.
- Let’s consider each one of these points separately.
Digital Advertising & Blockchain Technology
One of the major issues of the digital marketing section is the problem with advertising fraud. According to a report by Adloox, $7.2 billion was lost by advertisers in 2016 due to ad fraud. This is 5% more than 2015. Blockchain technology can help solve this issue because it allows you to store information in an unalterable form on peer-to-peer networks.
This makes it possible to prevent fraud, as all transactions will be recorded in a blockchain network and cannot be deleted or changed. In addition, advertisers can pay publishers only when their ads are viewed (viewability), which was not the case before with other advertising platforms. This is an effective way of solving the problem of search engine optimization (SEO) and preventing spam traffic. Once again, this is done through blockchain technology, which records each transaction in a decentralised ledger.
This revolutionary technology will allow advertisers to optimise their advertising budgets by providing access to only useful and qualified traffic for their websites. This also means that they can avoid wasting money on the activities of bots – automated software that can compromise the reputation of a business.
The transparency offered by blockchain technology is also helpful in preventing the spread of fake news, which has become a major problem for digital marketing. Since each transaction will be recorded in a decentralised ledger and cannot be changed, sites with fake news cannot benefit from this kind of traffic. Thus they are not profitable for spam/clickbait sites that often spread false information and undermine the authority of legitimate news sources.
Moreover, blockchain technology offers options for full transparency in digital marketing campaigns. Products can be assigned a unique ID from the manufacturer or supplier and this code can be used to track its history, as well as who exactly bought it or sold it. There will be no need for intermediaries, and that means businesses will not have to pay additional fees. This would also eliminate the risk of fraud by a third party.
In addition, blockchain technology makes it possible to create decentralised digital marketplaces that allow sellers and buyers to communicate directly with each other without the involvement of any third parties. It is possible to create a system that will allow you to completely avoid censorship.
Blockchain technology can also be used in the digital publishing industry, by forming decentralised platforms that do not require third-party intermediaries. This reduces costs for both publishers and advertisers, while users get an ad-free experience (since there are no ads on distributed ledger networks) and the opportunity to monetise their content.
Unilever, one of the largest global advertising companies, recently invested in a pilot program that combines blockchain technology and online video ad spots.
What Is Blockchain Marketing?
Blockchain marketing is a form of digital marketing focused on helping businesses improve their sales and marketing efforts through the use of blockchain technology.
Benefits of blockchain marketing
Modern companies face a lot of various challenges while using conventional marketing strategies. This is the reason they are considering blockchain technology as a replacement for legacy or traditional marketing approaches. Main features and benefits of blockchain marketing include:
Transparency – all transactions made through blockchain technology will be stored forever in the blockchain database. This will provide you with an opportunity to carry out accurate reviews of your advertising campaigns and check the performance of each activity.
Greater security – blockchain technology helps make any transaction completely secure due to its decentralised nature. It is nearly impossible to alter transactions made through this system.
Lower risk of fraud – because all deals are verified by several computers on a distributed network, fraud is actually nearly impossible.
Greater engagement – many blockchain based apps make use of a reward system which uses tokens. Ensuring that customers are rewarded for their own actions provides them with an incentive to help you spread the word about your business or service.
Ready-made application programs – most of the technological difficulties in creating blockchain based apps have already been removed. There are many crypto-based companies which can help you build a blockchain marketing campaign and deal with the technical side of things, allowing you to reap most of the benefits without needing to get much involved in complex technology yourself.
Why should marketers care about the emergence of blockchain technology
Why should marketers care about the emergence of blockchain technology?
It is not a secret that blockchain technology has had an enormous impact on the way we work, play and live our lives. Recently, in South Korea, the government announced plans to utilize blockchain technology in a new tourism initiative as reported by Cointelegraph.com — a Singapore-based blockchain news outlet. This is just one example of how blockchain technology can play a significant role in our lives.
South Korea is not alone. In August 2017, UK’s Prime Minister Teresa May announced plans to integrate blockchain into public services and has even set aside £10 million for the initiative according to Telegraph.co.uk — another Singapore-based news outlet that reports on blockchain while prioritising their British audience.
Although it is very likely that you heard about blockchain technology, you might be wondering: Why should marketers care? Blockchain marketing allows brands to stand out in a crowded marketplace and reach their target audience like never before.
For example, the U.S. Real Estate industry saw a 137 percent increase in its number of listings on the blockchain-based platform, BitProperty.com — a decentralised real estate agency that uses smart contracts. This example highlights how the emergence of blockchain technology can help cement brands’ reputations for reliability and trust with potential clients and customers.
Here are four ways in which marketers can leverage on the future of blockchain technology to stand out from the crowd:
- Blockchain technology has kept customer records more secure than ever before, and it can help marketers build their brands on reliability and trust with potential clients and customers. As a result of blockchain technology’s decentralised nature, there is no central authority who can be compromised by hackers. In the digital age where personal information can easily fall into the wrong hands, blockchain technology provides a safer option for marketers to uniquely identify their customers.
- Blockchain marketing will help brands stand out in the marketplace because it is a genuine and revolutionary way of reaching new audiences. As advertising expenses go up every year, blockchain technology can be used as an alternative form of digital advertising that keeps costs low by cutting out middlemen and their hefty fees. A report from the KPMG consultancy found that digital advertising costs around $260 billion per year, and this number is projected to reach $335 billion by 2020. In addition, firms such as Google command most of these revenues instead of marketers who are trying to get in front of new prospects and future clients.
- Keeping up with the status quo is often costly for marketers in terms of time involved to create interaction with their customers and prospects. Blockchain technology can help marketers save money by redefining how they interact with new audiences and curate more relevant interactions each day. Of course, blockchain marketing still involves time spent on creating remarkable content that your audience will enjoy interacting with. However, by harnessing the true power of blockchain technology, marketers can rest assured that their content will reach a relevant audience and be put to good use. In addition, marketing costs can be significantly reduced because more people will discover your brand as it becomes widely shared on the Internet!
- Blockchain technology is often associated with the financial services industry, but blockchain marketing can be applied to any industry that wants to stay relevant and effective in the digital age. With blockchain technology, companies have access to a fast-growing network of new customers and clients who are eager to find out more about their products and services. Here is another exciting example: The Decentralized Apps (DApps) sector saw a $3.5 billion increase in venture funding since the beginning of 2017. This is because more and more people today are open to experimentation with new forms of technology, especially if it helps companies reach future clients in the digital age.
How can marketers use this new technology to their advantage
It’s a question that must be on the mind of many digital marketers, especially in light of the hype surrounding cryptocurrency.
The internet was supposed to level the playing field for all users – freeing us from central control systems. Blockchain builds on that promise by making sure there is no centralised point with authority over transactions or information.
Digital marketers need to be aware of the possibilities presented by blockchain and start experimenting with new ideas.
Changing Authority over Data
The explosive growth of digital media has given major brands the power to collect information on their users and use that data for ads targeting and marketing purposes. This has made it easier than ever for marketers to gather information about their customers, and they can now be confident that the data is accurate. But, this power has come at a price for users.
What blockchain technology does is shift control of the data from the provider to the consumer, while ensuring it remains secure and private.
This means digital marketers will no longer have access to all of your information in their databases – all they will have is the information you choose to share, and that’s it.
Every time a consumer shares their data, they earn crypto-currency in return. This creates transparency between marketers and consumers by showing how much of your information is being shared for what purpose.
Blockchain technology provides digital marketers with an opportunity to regain some of the trust and credibility they have lost over the years.
Enabling micropayments
Blockchain has created an infrastructure for micro transactions to occur. Digital marketers are already familiar with the concept of pay-per-click, but this still requires users to make a one-time payment using their credit cards or Paypal account. With blockchain technology, the same transactions can be made using micropayments.
Digital marketers should already be considering paid subscription models to replace pay-per-click. Blockchain is a natural fit for a system like this because it enables a direct exchange of value between the advertiser and consumer with each engagement.
Micropayments will also change how digital marketers interact with influencers, as well as how content creators can monetise their work.
No More Censorship
The key to internet freedom is encryption of information and data sharing. Every time we share something on the web, our transmission is vulnerable to being intercepted or stored by a third party in case it might prove valuable at some point in the future.
Blockchain has the power to encrypt and secure data, which in turn leads to greater protection of personal information. It also protects us from marketers who try to collect private data or manipulate rankings using black hat SEO techniques such as keyword stuffing.
With blockchain technology, digital marketers will not be able to control how consumers use their own information.
Loyalty Programs Updated
Blockchain technology will put an end to loyalty programs that use points or miles as their currency. For consumers, this represents a better deal because they can now determine which rewards they get and for what services.
Using blockchain, marketers have the ability to track customers based on their interactions with ads, products, or services. Every time customers are exposed to an offer or sale, they get a reward – kind of like how airline miles work. Rewards can only be used at that particular store or with that particular service provider.
Digital marketers will also have the ability to provide greater value through rewards. A blockchain loyalty program is better than points because it creates shared value between the marketer and consumer – each can use rewards from any product or service they choose.
Blockchain is a Distributed Ledger Technology that maintains a continuously growing list of records called blocks, which are linked together through cryptography. Since the system works as an open, decentralised database, new information cannot be added retroactively without the consensus of every participant in the network. Furthermore, as an auditable, public platform, blockchain maintains a high level of transparency and accountability for digital marketers who are currently under fire for manipulating data and compromising consumers’ privacy.
The beauty of blockchain technology is its ability to provide consumers with greater control over their private information. This shift from centralised servers to a distributed database also enables greater transparency between marketers and consumers.
It’s time to talk about digital marketing in a new light. Blockchain technology is just the beginning of the conversation.
What are the potential risks that come with using this new technology
What are the potential risks that come with using Blockchain technology?
With excitement about blockchain growing, discussion about what it all means is often met with confusion and challenges. Some people mischaracterise the distributed ledger technology as just another way of transacting online securely. They argue it could be used to replace credit cards or other electronic money transfer systems such as PayPal and Venmo.
Let’s explore some of the questions around blockchain.
As a friend, I would like to share with you what we think are the potential risks that come with using blockchain technology.
First, it involves an investment in infrastructure and expertise, but for startups or small businesses that may struggle to hire top talent this can be a deal breaker.
Second, the blockchain network is more difficult to scale across multiple users (known as nodes) compared with centralised solutions. This leads to slower transaction speeds and limits scalability of the technology. Thirdly, the process to produce, consume and validate blocks on the blockchain comes at an energy cost: roughly speaking this equates to the total energy consumption of the Republic of Ireland on any given day.
To be clear, I am a passionate believer in blockchain technology and if you read this far, then clearly you are too! However before we can truly understand its potential to change the world as we know it, we must first address these challenges,” he added.
The future for Blockchain Technology in Digital Marketing
Blockchain technology is here to change the future of digital marketing.
Current digital marketing has several shortcomings:
- It is centralised
- The ad-tech companies sell user data to third parties without user consent (Facebook and Google are continuously under fire for this)
- There’s high transparency regarding the cost of advertising on current digital platforms which leads to higher costs due to competition among advertisers over keywords and audiences
- There’s limited transparency regarding the performance of digital ads
- Low-quality traffic is still a huge issue in digital marketing, especially on social media platforms such as Facebook, Google and Twitter
- Digital ad fraud remains an unsolved problem that costs advertisers billions of dollars annually (51% by some estimates)
- Digital marketing and advertising is slow to evolve as the current platforms usually focus on short-term results rather than long-term opportunities
- Digital marketing isn’t personal enough – there’s still no way to connect with audiences at a deeper emotional level using digital ads
- Several campaigns and ad units are not mobile friendly
- Current digital marketing platforms aren’t always fun to use
These issues lead traditional marketers and CMOs (Chief Marketing Officers) to turn their attention towards new solutions instead of trying to solve the existing problems. In comes “blockchain technology” that claims it will change the future of digital marketing. Let’s examine it in more detail.
How will blockchain change digital marketing?
Blockchain will bring about a new set of foundational technologies that serve as the basis of trust online. It will make digital marketing more transparent and “direct” as it will eliminate third-party intermediaries.
Blockchain based digital marketing platforms will allow businesses to connect with their customers on a personal level, creating much more meaningful interactions. This will lead to higher engagement rates and stronger relationships – making your brand stickier in the process.
Blockchain will also change the way we do digital advertising. Currently, buying and selling is not transparent and easily verifiable. The opaque environment allows for several intermediaries to claim a percentage of each transaction as profit – and therefore creating a short-term mentality in the process.
Blockchain technology will make it easier for publishers to sell their ad inventory directly to advertisers using smart contracts. This direct connection between publishers and advertisers will allow for more efficient buying, selling and exchanging of ad inventory at a fraction of the cost. Currently, buyers have to pay much higher fees than what they should due to the role of intermediaries in the process.
The costs will be reduced because the optimal amount of money will be involved at each step. This transparency will also eliminate fraud as it tracks the origins and circulation of digital ads along the supply chain.
This direct way to buy inventory is already starting to happen, with publishers such as Forbes openly sell ad inventory on their websites using blockchain technology. Blockchain based digital marketing platforms such as Adchain and Basic Attention Token are also developing the technology needed to allow for this direct connection between publishers and advertisers.
Blockchain technology will also help with advertising fraud by creating an immutable record of transactions. This will protect publishers from fraudulent ad buying behaviour like bot traffic and click-farms, reducing the cost that they have to pay for ensuring that their advertising is “clean”.
Another way blockchain will help with fraud is by acting as a ledger that records when an ad was shown and to who. This will allow publishers to charge advertisers for missed impressions, reducing the cost of media buying in the process. This feature is already being built into Basic Attention Token’s digital marketing platform.
Blockchain will also change the way we use data in digital marketing. Currently, third party intermediaries like Facebook and Google are taking a large cut of ad revenue for their role as middlemen between publishers and advertisers. This leads to more expensive advertising as these intermediaries are not passing on cost savings to their customers.
Using blockchain to connect publishers and advertisers directly will allow both parties to save money and therefore invest more into digital advertising campaigns – leading to higher ad budgets. The benefits of this will be two-fold, as it will increase the amount of money that is going into digital marketing while also making it a quicker process. It will improve the ROI (return on investment) of each campaign as the process will be faster, and therefore cost less – leading to more efficient media buying.
Blockchain technology is not just limited to digital advertising however, it has the ability to bring about a new ecosystem for all online advertising. This will improve trust between all parties involved in an online advertising campaign and therefore the quality of online advertising – which will lead to a more engaged audience as they are seeing ads that interest them.
All in all, blockchain technology is still at an early stage but there is already work being done to implement it into digital marketing. It should be noted that if you want to start implementing blockchain into your marketing strategies, you should hire a blockchain development company. It is very basic to get started with blockchain but it can take some time to develop your own service on top of the technology. This way, your organisation will be able to create its own data management tools – rather than using existing solutions that are already available in the market.
Final thoughts on what we just learned (or a summary)
While blockchain was originally conceived to facilitate Bitcoin, it has broader applications and implications. The technology can be used for a range of data transactions, far beyond cryptocurrency.
This is an illustration of how blockchain works:
As we enter the second decade of the 21st century, there’s no doubt that digital marketing is one of the most powerful tools in today’s business world. With the advent of digital marketing, businesses have been able to reach wider audiences and customer bases than ever before.
But are current systems really beyond reproach?
Is there anything wrong with using a centralised system that relies on intermediary third-party services when it comes to digital marketing?
To answer these questions, let’s first talk about how digital marketing works.
A Quick Primer on Digital Marketing
Digital marketing is essentially a practice that uses the Internet to deliver and track advertisements in order to raise awareness of products or services, with the ultimate goal of increasing sales.
This currently relies on third-party intermediaries like Google or Facebook for tracking online users.
What are the problems with these third-party systems?
These centralised systems can be vulnerable to hacks. For example, a recent Google+ breach affected 500,000 accounts , and in 2015, Ashley Madison was hacked and a database of its users’ personal information was stolen . Not only this but when there is a data breach at one of these companies, the users are at risk of identity theft. And since data is stored in one central database, there are limits to how much the companies can do in terms of reducing this threat.
Unlike conventional transactions where a physical currency is exchanged for another physical currency, Bitcoin and alternative cryptocurrencies allow for an exchange of money and value without the need for third parties and intermediaries.
In other words, parties do not need to rely on banks or similar financial institutions when transacting financially with one another.
