6 Ways Blockchain Revolutionizes Digital Marketing
Blockchain technology is often associated with bitcoin and cryptocurrencies that are not only disrupting the financial sector but transforming the way various industries do business. Blockchain is a decentralized technology, which is considered to be the next huge wave in technology. It has everything documented and verified, allowing decentralized communication between different parties. The global blockchain market is expected to be worth $20 billion by the year 2024.
Blockchain can impact digital marketing in a significant way. Looking at the growing popularity of the blockchain and owing to security reasons, many digital marketers are relying on this technology. As per Blockchain Marketing Technology Landscape (BMTL) report for Q1 2018, blockchain-based MarTech and AdTech market grew by nearly 400% in the past six months.
Here are the major six ways in which blockchain will change the advertising and digital marketing industry in the upcoming years.
1) Role of middleman
Blockchain has the capability to remove the middleman in digital advertising.
According to an analyst from Forrester Research, ad publishers who remove middleman can increase their CPM (Cost Per Thousand Impression) from $1 to $5. Blockchain does this even better, enabling companies to pay their targeted audience directly to view their ads, thus, completely negating the need for a middleman.
Brave, an ad-blocking web browser based on blockchain, uses “Basic Attention Token” (BAT), allowing advertisers to directly pay users for viewing their ad without the end user having to give up their data in exchange.
Companies prefer displaying Google banner ads on their site because Google is a trustworthy source. Google verifies the credibility of the business, ensuring that the host website’s brand image isn’t tarnished. It plays the role of a middleman between the advertiser and the website owner, taking a portion of the profit from the website owners.
Blockchain enables website owners to directly find advertisers who are already verified through this technology without the need for any intermediaries like Google Display Network or Facebook.
Blockchain companies like BitClave are focusing on search-data privacy, ensuring users can have full control over their data. By using Ethereum blockchain technology, the company directly connects customers and businesses without involving middleman in between. When users perform a search on Bitclave’s search engine, they can select what data they want to reveal to the advertisers. Bitclave completely eliminates the need for intermediaries who sell the data of the users to the advertisers.
By creating such direct relationships, businesses can exercise greater control over their spend and be sure that their users are genuine. As per a study, advertisers had an estimated loss of $7.2 billion in ad spend in 2016, and the losses were estimated to reach $16.4 billion in 2017. Blockchain gives businesses information about who viewed the advertisement, when it was viewed and for how long it was seen, ensuring complete details on how many real users clicked on it.
2) Ad frequency
When it comes to the frequency of advertisements, marketers don’t have an idea about consumers’ preferences and overwhelm them with too many ads, emails, and messages. They send a lot of ads hoping that at least one might hit the right chord. This is due to their unawareness about what their audiences want, and when, where, and how they want it.
Blockchain technology prevents the same display ad to get seen, ensuring the optimal frequency of ads for the target audience. As per studies, when it comes to the impact of frequency of ad exposure on consumers’ readiness to buy, anywhere from four to six ad exposures is favorable. This is, however, difficult to achieve due to the issues of data quality.
Consumers avoid sharing their personal information because they lack trust in companies, fearing that their data will be misused. If they share more of their preference information, businesses will get to know more about them, leading to an enhanced relevance of the messages and reduced the frequency of advertisements. Blockchain’s ledger-based transparency enables brands to increase the trust of consumers. It addresses consumers’ concerns about data security, giving them a transparent look at how their data is utilized.
3) Social media
Blockchain is going to change the scenario of social media for those who are offering services to businesses as well for the ones making use of social media to reach customers. Social networking sites built on blockchain will be more secure with no central hosting server.
One of the effects of blockchain is that social media marketers can validate their own data instead of relying on third-party tools for it. Blockchain technology also ensures privacy, allowing users to transact in a private way. Only the sender and recipient have knowledge about the contents of the transaction.
Blockchain verifies the identities of users, ensuring their genuineness. It maintains transparency in social media ads that involve the process of booking and buying, and placing ads, eliminating the chances of frauds.
Through blockchain, it will be possible to take out the role of social media as a middleman with content producers getting compensation for the content instead of social media platforms. When users log in on social networking sites, their data is released to advertisers. With blockchain technology, search data privacy is ensured.
Companies who are monitoring consumer behavior will be able to get all the information from one place, which will be reliable due to a high degree of accuracy of blockchain. Marketers will even be able to pay to consumers for their information.
Social media has fake news and spambots. With blockchain, the content distribution in the future will be focused on verified information and the spread of data could be easily traced. It will also be possible to block content and its contributors.
There are a few social networks that use blockchain technology like Akasha, Sapien, Sociall, Synereo, Indorse, and Steemit.
Sociall allows users to post information, exchange private messages, do public transactions, carry out sales activities, buy ad spaces, etc. on blockchain. Information exchanged, data stored and transactions done within the platform are completely private. Sociall’s cryptocurrency SCL can be used to purchase goods and services, with all the transactions being managed on blockchain.
Synereo, just like Sociall has a cryptocurrency called AMP, which can be used by content producers to distribute content and receive payment.
4) Smart contracts
Blockchain enables smart contracts, helping digital marketers to provide services to clients across the globe. These contracts are “programmable agreements that execute automatically when conditions are met.” For the next step to take place, every contractual milestone has to be fulfilled. They ensure that payments are made only after the contract terms are met.
The key benefit of a smart contract is that it can process transactions without third parties. The transactions can be traced and are irreversible. Through smart contracts, marketers get a guarantee that they will be paid and contractors are guaranteed of the security. These contracts, therefore, provide transparency, saving time for both the parties.
5) Influencer marketing
Blockchain technology provides the necessary regulation for transactions between the brands and influencers, assuring both the parties of transparency and security. It also helps in authenticating users and engagement that marketers get from these transactions. Marketers will be able to see whether an influencer’s followers are genuine or simply bots.
Influencers face challenges in catering to their audiences and interacting with their fans due to less time and technical capabilities. By having dedicated applications, social media influencers can improve interaction opportunities and strengthen relationships with their audiences. Dedicated decentralized apps (DApps) can be helpful in improving both data and payment on blockchain with the current social network data. Influencers can also be benefited by smart contracts, which can be created between various parties to start working on a campaign.
Through blockchain technology, influencers get a secure way to get paid for helping businesses in their social media marketing efforts and businesses get to collaborate more effectively with them.
By incorporating tokenization logistics into a decentralized network, it becomes possible to remove intermediaries like influencer marketing platforms.
6) Loyalty and reward programs
There are many reasons why loyalty and reward programs don’t give expected results including lack of intrinsic or perceived value, absence of transparency and difficulty in the transfer. Blockchain technology facilitates marketers in coming out with effective loyalty and reward programs. Customers can have points automatically added and tracked when they shop. Instead of using a loyalty card, marketers can use blockchain technology to change the nature of reward offers for shoppers.
OrionCoin uses the blockchain technology to give businesses as well as their customers loyalty points known as “ORC.” They can be redeemed across loyalty programs and traded for cash. They are, thus, beneficial to merchants in offering great loyalty programs and for shoppers who get an option of using ORC points with multiple merchants or encashing them.
Blockchain technology is still in its infancy and is expected to grow significantly in the next few years. It will disrupt digital marketing, offering marketers various benefits in terms of security, transparency, efficiency, and performance. Those marketers who will adopt this technology early will be able to provide a better user experience and an increased trust to consumers due to permission-based access and hard-to-crack security of blockchain.
Blockchain technology will also help in reducing the time needed to launch marketing campaigns, eliminating difficulties that digital marketers face in measuring the effectiveness of the campaign. Businesses will be able to allow consumers to check the authenticity of their products. There will be highly targeted ads, fewer pop-ups, and encrypted data and it will be possible to tackle the problems of fraud, leading to an increased ROI. Marketers will, therefore, have to be aware of the developments in blockchain to connect better with their target audience in the future.