Role Of Blockchain In Marketing
The concept of a blockchain was foremost introduced in 1991 by Stuart Haber and W. Scott Stornetta, and here is where blockchain technology emerged. It was a system consisting of a series of immutable digital timestamps and an encrypted chain of blocks. This idea was used in 2008 to establish Bitcoin, a cryptocurrency that allowed anybody to make trades without the need for an intermediary like a bank, by an unidentified entity (a person or people) known only by the alias Satoshi Nakamoto.
Over the past ten years, several cryptocurrencies have entered the market, including Ethereum, Litecoin, Ripple, EOS, and others. This piece will examine blockchain’s potential applications in marketing and advertising. We’ll start by discussing the idea of blockchain in marketing, its impact, best practices, and pros and cons.
What is Blockchain?
Blockchain is a network of digital blocks that keeps track of transactions in the open. It is a decentralized technology, which implies that no single person or business owns or runs it. There is no intermediary. As a result, it is making the technology far more secure.
What do we mean precisely by “middle man”?
Think about what occurs when you visit the bank. Your bank must approve all transactions, and only their system keeps track of your money. Even if you have the money, you cannot accomplish something if they say you cannot.
On the other hand, blockchain is the home of several cryptocurrencies or digital currencies. The amount of bitcoin you have is always accurate, and you can always trust that number and the knowledge that if you send any to someone, it will go through since no one maintains the blockchain; instead, it’s a public record kept on a network.
Blockchain technology offers many uses, including marketing, and is perfect for creating and storing cryptocurrencies like Bitcoin and Ethereum.
What is meant by Blockchain Marketing?
Using blockchain technology in a digital marketing campaign generally comes to mind when you hear the phrase “blockchain marketing.” Although blockchain is used most of the time to purchase, sell, and trade cryptocurrencies, other applications will start to appear as we learn more about this new technology.
And we’ll explore some marketing-related uses for blockchain technology.
Blockchain in marketing can assist businesses in establishing more trusting connections with their clients, enabling them to create more targeted advertisements without sharing as much data with as many companies.
As blockchain technology develops, many fresh business options will open up. We’ll discuss those options’ potential outcomes and ramifications in the upcoming weeks.
Why is blockchain used in marketing?
The three leading causes of blockchain’s quick acceptance might help you comprehend how it will change the marketing landscape:
- Decentralization
In a centralized or client-server design, one (or more) entities are known as the server, and you (the client), to access the information, must establish a connection with the server. For instance, you must use an intermediary, like a bank, if you need to send money to someone through the internet. Due to the presence of a middleman, the centralized design is susceptible to several risks, including data breaches.
The P2P network, however, is decentralized. There isn’t just one source of information. In actuality, as was previously observed, each node in the network keeps data locally. As a result, you may send money straight to someone without going through an intermediary.
- Immutability
Security through records’ immutability is the second factor. The information included in a block cannot be changed once confirmed. Even if someone tries to forge a partnership on the blockchain, the data and the hash of its last blocks will be dramatically altered. It cannot be validated with any other node since the entire blockchain has changed at this point. Anyone attempting to attack the blockchain would have to change data at every node, which is almost difficult.
- Transparency
Since blockchain is a distributed digital record, all users can access past transactions. Even though this could create some questions, it is unneeded since, even if blockchain users can see the transactions, the identities of the persons are still secret.
Pros and Cons of the Blockchain in Marketing
Is it a brilliant idea to employ blockchain technology for marketing? What potential effects may this technology have? Let’s go over some benefits and drawbacks to get a feel of the scope of the possible changes.
Pros
Adopting blockchain technology has various benefits for the marketing sector:
- Blockchain is trustworthy.
- Never is data sold or stolen.
- This prevents fraud.
- It does away with the requirement for a middleman in transactions and advertising.
- It enhances the monetization of content.
Cons
Of course, there are thorns on every rose. Thus, there are several issues with blockchain:
- Data management is still possible in other circumstances, such as when a single company controls most nodes.
- It is expensive.
- It requires a lot of effort.
Only time will tell if the advantages outweigh the disadvantages. Let’s first examine some of the potential effects of blockchain on marketing.
Impact of Blockchain on Marketing
What role may blockchain have in the marketing sector? We’ll go over some of the essential alterations and chances that blockchain technology may bring to the world of digital marketing in the future.
- Users could receive rewards for watching commercials.
On almost every channel they visit, users are bombarded with advertising. There are constant calls to buy, from social media and online marketing to television ads and billboards on the highway.
However, the advertising experience may become much more direct with blockchain technology. Corporations may reallocate some of their advertising resources to pay customers who see their advertisements.
- Data is safer and won’t be sold.
Currently, our technology is secure, but not enough so. How often have emails about data breaches for companies that use your personal information been sent to you?
In addition, some businesses that you provide your information to—even if it’s just your name and email address—sell it to other companies for profit. You are then added to twelve new corporate mailings you did not request.
All of that might change as a result of blockchain technology. Because blockchain transactions are entirely anonymous, you don’t need to be concerned about disclosing your data.
- Marketing becomes much more transparent and reliable.
Brands may assert that they provide only organic items. But can they give any evidence? Customers have legitimate concerns about marketing tactics and advertisements.
But because of blockchain, businesses can be much more transparent, making it easier for consumers to believe in them. Due to its ability to exhibit various transactions, companies may use blockchain to illustrate their supply chain functioning.
Now, customers may discover where certain items originate and how and where they were made. Martin said, “For instance, whether the food was indeed organic or if the farmer in the supply chain was fairly rewarded.
This kind of information will have a significant impact on competition. As customers become more aware of their purchasing selections, previously picked businesses will be replaced by companies with a more ethical supply chain.
This is advantageous, though. It suggests that small businesses could be more easily trusted, giving them a market edge, mainly when competing with big-box merchants.
- Businesses may produce more targeted leads.
Blockchain, however, benefits both businesses and consumers. Currently, organizations use cookies to get customer data. This then affects email funnels and retargeting campaigns. However, not all of that data is reliable. Thus some of these initiatives ended up being a massive financial waste.
Using blockchain, businesses can generate much more accurate leads since they will get the information directly from the clients.
And how is this happening? As was previously said, blockchain technology is more secure and protects customer information.
The customer would be supplying their data and information in this scenario. The client would be paid for doing so through discounts, tokens, or other payments, much like with Braces and compensation models.
The lead data gathered by businesses will be far more accurate because the customer will opt in, allowing them to sell more successfully.
- Advertising might become more affordable.
Online advertising must be handled through a reputable platform, like Google or Facebook, if you want it to be successful. Because there is such a small market for ad platforms, they mostly set their prices. They produce $43 billion and $32 billion ad revenue per quarter.
Using blockchain technology, brands and websites with available ad space may be quickly authenticated, enabling them to work together directly without needing an intermediary to drive advertising prices.
This suggests that advertisers will acquire far more exact data and stats from their advertising, in addition to commercials being much less expensive and less expensive in the future. They will be able to track their advertising more efficiently since they will know precisely how many people saw it.
Businesses will also be able to determine which purchases were made directly from their marketing—and where those advertisements were displayed—since all blockchain transactions are public.
Best Practices for Blockchain in Marketing
Industries including banking, finance, and insurance (BFSI), real estate, media, retail, healthcare, and law stand to be significantly affected by blockchain technology. These are only a few instances, though! Big companies like IBM, Microsoft, Oracle, Intel, and Apple have already begun to invest in blockchain after seeing its potential. Let’s look at the blockchain strategies and best practices transforming the marketing landscape in light of all the hoopla around the technology.
- Influencer Marketing
To reach a wider audience, brands heavily invest in celebrities and micro-influencers. However, influencer marketing has a bad reputation due to calculating ROI, a lack of transparency, and phony followers and engagement.
Blockchain can efficiently solve this issue by integrating smart contracts into the ecosystem. Smart connections will make it simpler to receive payment after doing particular activities or delivering the appropriate outcomes. The performance and credibility of the influencer may also be verified using technology.
- User data protection
Organizations must prioritize protecting customer data as data breaches become more frequent. When GDPR took effect in 2018, it imposed strict guidelines for businesses collecting and using customer data. Organizations have thus been looking for ways to increase the security of customer data.
Blockchain saves the day by enabling customers to sell or anonymize their data to their chosen businesses.
- Blockchain-based social platforms
Social media platforms have drawn billions of users over the previous decade. People may communicate with their loved ones, friends, favorite brands, and celebrities on social media, but it costs them their data. Since advertising is the direct source of income for social media platforms, they keep track of every action to enhance their targeting capabilities. People are hesitant to use social media due to this knowledge and previous data exposure.
- Social Commerce
The following industry disruptor in e-commerce will be blockchain, which has already arrived in the form of social commerce. Blockchain offers applications in e-commerce that are similar to traditional marketing in terms of lowering fraud, enabling faster transactions, and protecting user identification.
Decentralized E-commerce systems and marketplaces like OpenBazaar, GAMB, Bezop, and Eligma assist merchants in building online shops and provide them with the control they need to manage their businesses.
Wrapping Up
Despite being relatively new, blockchain technology has already penetrated several business divisions and industries, including marketing. We have presented it to help you understand blockchain and how it may be used in marketing. We also saw the benefits technology might provide and how it can change marketers’ gaps and problems.
Marketers need to evaluate and test the different possibilities and use cases mentioned above to remain ahead of the competition.
