Even though most people correctly associate the term ‘blockchain’ with cryptocurrency and cryptography, far fewer people know that blockchain also has much to offer when it comes to digital marketing.
Blockchain is beginning to redefine several digital processes, including with financial security and how we conduct transactions. And even though most small business owners aren’t aware of it yet, blockchain technology also possesses very important applications for digital marketing and advertising that could prove to be more disruptive than AI and machine learning.
Taking the time to understand exactly what blockchain marketing is and exploring specific ways that online marketing that can be enhanced with the technology is one of the best actions you can take as an online business owner to get ahead of the curve. As we’ll soon see, blockchain marketing has the capability to help both the company and the consumer.
Blockchain is still subject to much hype, and with it, much misunderstanding as well.
At its core, blockchain is a digital transaction ledger that stores data (such as records of transactions or events) in a distributed, peer-to-peer network across multiple computers or servers. Since the data is stored across many different servers, there is no single location that can be hacked. Furthermore, the data is encrypted using cryptography, which only allows the sender and the receiver to view the details of the transaction.
This stands in stark contrast to the method of storing your funds with a traditional bank, which stores all of your financial information on only one server (or one central location). Blockchain not only substantially reduces the risk of fraud or hacking, it also eliminates the need for verification from independent third parties.
As previously noted, most people are familiar with blockchain technology through cryptocurrencies, which are digital currencies that verify and encrypt financial transactions using blockchain technology. The two most well-known cryptocurrencies are Bitcoin and Ethereum, which alone make up over 65% of the cryptocurrency industry based on market capitalization.
But also as previously noted, blockchain possesses more applications that go beyond simply storing and encrypting financial transactions and records. Digital marketing is one of these applications.
Here are the primary ways that the use of blockchain marketing stands to transform online businesses:
Perhaps the most obvious use for blockchain in digital marketing is that it dramatically boosts payment security. Inadequate payment security is one of the biggest challenges that business owners face today.
When it comes to marketing, businesses can use blockchain to facilitate and encrypt transactions made to advertisers. Your business can also advertise how you accept cryptocurrency payments in order to let their customers know that the risks of stolen credit card numbers have been eliminated.
Business owners need to focus on having full control over their customer data and ensuring PCI compliance, which means that all customer data must be properly encrypted and only viewable by members of your company with authorized access. Enabling transactions to be conducted with blockchain can be an important step to achieving this.
The whole purpose of blockchain is to create a trusted chain from the buyer to the seller. In marketing, ad expenditures are one of the biggest costs that businesses have to endure.
This is largely due to the multiple middlemen that take a cut out of each dollar. In a typical digital marketing campaign, these middlemen include supply side platforms, ad exchanges, and fees paid to the agency trading desk. Believe it or not, the average publisher makes only thirty to sixty cents on the dollar on average.
Blockchain, however, eliminates these middlemen so that much more of each dollar ends up with the publisher. As blockchain gains more acceptance, this fact alone will drastically shake up the way digital marketing is conducted. Major companies such as IBM have already successfully utilized blockchain technology to reduce their ad expenditures by tens of millions of dollars.
Small businesses stand to benefit from this just as much as large corporations have. Business owners should be keeping close track of advertising revenue and expenditures via detailed spreadsheets and automated financial reporting tools. These same business owners who keep tabs on where each dollar they pay for advertising is going, will be the first to see how conducting their transactions to advertisers with blockchain saves them a lot of money, which can then be reinvested into other parts of the business.
There are many ways that blockchain technology can help build trust between companies and consumers. For example, blockchain-enabled digital ledgers can document who owns the rights to different pieces of media to help reduce the theft of online content, including content (such as photos or videos) that you could use in your advertising campaigns.
Taking this step a bit further, blockchain-enabled code in so-called ‘smart contracts’ can actually keep track of licensing or legal agreements to help protect publishing rights. Marketers can also create smart contracts that detail the terms of an agreement between publishers and companies or otherwise use smart contracts to purchase licensing rights from content creators.
Furthermore, blockchain removes the ability for companies to view data from customers without reimbursing them for it. Companies have long had the ability to take data such as phone numbers, email addresses, and even personal or financial data from consumers. On one hand, this allows companies to market to people personally, but on the other hand, the concept of businesses taking personal data from people and making money from it is undeniably invasive.
Blockchain works to protect customer data so it can’t be viewed by companies. For example, rather than being bombarded with online advertisements consumers can instead opt-into seeing advertisements and then receive BATs, or Basic Attention Tokens for the ads they click. The customer’s data remains with them rather than like we discussed before, and when they do choose to reveal it, they are paid for it.
For everyday consumers, this means they will have more peace of mind knowing their data is not being relentlessly collected. For companies, this means they can target higher value customers more likely to buy from them.
While many people are aware that blockchain technology can help encrypt digital transactions, far fewer are aware of the above advantages it can provide as well. But even though it hasn’t been widely accepted as a method of payment nearly as much as fiat currency has (yet), cryptocurrency is already finding increased favor with the general public.
According to a recent survey conducted by CreditDonkey, for example, 72.5% of respondents reported owning at least one type of cryptocurrency. At the very least, this indicates that people are curious about crypto and the blockchain technology that powers it.
On the larger scale, blockchain possesses the ability to enhance transaction security, reduce ad expenditures, and to help companies and customers build trust with one another. Digital marketing is just one of the areas where blockchain stands to dramatically transform the way we do business with one another by both streamlining operations and better protecting our personal and financial privacy.