Blockchain Can Radically Transform Digital Marketing
The first thing that comes to mind when you hear the term “blockchain” is Bitcoin, the cryptocurrency that has been making waves lately in the financial and technology markets. However, blockchain is an overarching technology, of which cryptocurrency is barely one facet. At its core, blockchain is a system that allows information to be stored and distributed extensively, but not copied. It is a fundamentally non-repudiable, peer-to-peer technology with enormous potential to disrupt a lot of sectors.
One of the fastest growing applications of blockchain outside of fintech is in digital marketing. It facilitates greater transparency, trust and accountability for brands and advertisers in their relationships with consumers as well as media.
That’s the reason why the Interactive Advertising Bureau (IAB) has set up a working group to study how blockchain can improve efficiency in digital advertising, while the Data & Marketing Association (DMA) has helped build an open protocol to prevent ad fraud. This is all in response to increasing interest on the part of consumers in the technology.
Let’s explore in detail a few ways in which blockchain is turning digital marketing on its head.
Elimination of Middlemen via Direct Media Buying
With the rise of programmatic advertising, traditional media buying agencies are being edged out of business. As digital media becomes more and more addressable, the behemoth demand-side platforms (DSPs) like Google and Facebook will eventually start to feel the heat. Why is that? Because blockchain enables advertisers to communicate directly with ad publishers by establishing the veracity of users via click-through data. It also builds trust between the parties with a transaction-dependent payment system.
This eliminates the need for platforms like Google to verify the number of ad impressions or genuineness of user clicks, and also significantly reduces the amount of money lost to ad fraud, which is projected by the World Federation of Advertisers (WFA) to reach $150 billion by 2025. These funds will be available for advertisers to be re-channeled into more campaigns.
Transparency Throughout the Customer Journey
Every part of the user journey will be subject to strict validation and verification norms with the introduction of blockchain at various touchpoints. Sellers of goods and services can irrevocably prove their trustworthiness to customers by making their manufacturing and supply chain processes radically transparent. In a groundbreaking instance, retailer Walmart used blockchain technology based on IBM’s Watson AI to create a digital route for how their pork products originated in China and ended up on shelves in the US.
Consumers and vendors alike expressed greater confidence in Walmart as a result. “Blockchain ledgers establish a shared, secure record of supply chain information flows – a single version of the truth across networks for supply chain transactions, processes, and partners,” says Shari Diaz, Ecosystem and Innovation Leader at IBM Watson Supply Chain.
In another instance, fashion brand Babyghost teamed up with Blockchain-as-a-Service (BaaS) provider VeChain and used a heady mix of emerging technologies such as blockchain, Near Field Communications (NFC) and Augmented Reality (AR) to enable customers to scan clothing tags to check if they were genuine or not. Customers also got access to the backstory of how that clothing item was made and who modeled it previously, resulting in a personal connection with the brand.
Full Control of Privacy in Users’ Hands
Numerous studies have shown that consumers are willing to exchange personal information in for sweeter deals, customized products and better service. Marketers can appease their privacy concerns simply by showing respect and explicitly asking for permission to show branded messaging.
The European Union is poised to apply the General Data Protection Regulation (GDPR) on May 25, 2018. This directive will empower all citizens within the EU region to protect their privacy by forcing marketers to take consent for every bit of personal data that they collect and use.
Other regions may well follow suit and compel companies to do the same. Blockchain technology can come to the rescue here. Marketers can use it to negotiate approval with shoppers, website visitors or app users, who can be sure that only the data for which they’ve explicitly granted permission is being collected and used. What’s more, organizations can easily and securely store the large volumes of customer data they gather, without fear of it being hacked – blockchain-encrypted and decentralized data is far more difficult to break into than traditional storage methods.
Blockchain-based services like MetaMask allows users to micro-control their online identity with access to their full browsing and transaction histories. Users simply install the extension on their browser and create an “identity” that is authorized by the underlying blockchain technology and stored locally in the browser itself. Any transaction that attempts to copy information from this identity can be approved or rejected by the user, who in turn can use multiple such identities to browse publishers’ pages and purchase products in the guise of just an account number. While this wouldn’t be the same as a verified customer, the site or retailer can actually track browsing behavior and even issue loyalty points to the account in question.
The implication of users’ control over their online identities is such that it leads to a complete role reversal in Customer-Advertiser dynamics. Until now, marketers gathered customer data with impunity. However, in a Voice America interview, Amanda Gutterman, CMO of ConsenSys, said that could change in the future. “What if the customer forces your company to pay them to access and use their data? What if the customer charges you to read your ad or watch your video or attend your seminar? Welcome to the new reality of blockchain technology!” she declared.
Customer is the key
An earth-shattering shakeup of this scale isn’t possible anytime soon. Consumer understanding and business and regulatory adoption of blockchain technology is indeed a few years away. What is certain though is that the disruption is coming. Therefore, marketers had better be prepared to prove the value of their brands and products to their customers and find innovative ways of engaging with them.
[Olga Andrienko is the Head of Global Marketing, SEMrush- a digital marketing SEO Tool.]
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