How Blockchain is Revolutionizing Digital Marketing

 

Over the last ten years, digital advertising has accelerated at a pace unprecedented in history from basic banner ads and email promotional blasts to sophisticated, big-data-driven campaigns powered by AI and machine learning. 

But with each innovation, challenges follow: data privacy issues, ad fraud, reduced transparency, and increased consumer skepticism. 

Step in blockchain technology the same technology that fuels cryptocurrencies such as Bitcoin and it's already transforming the universe of digital marketing.

Although blockchain is perhaps most widely known in the context of finance and cryptocurrency, its uses in digital marketing are just as revolutionary. 

From greater transparency to eliminating fraud, blockchain offers marketers new ways of establishing trust, streamlining efficiency, and improving targeting accuracy.

In this article, we'll explore how blockchain is changing digital marketing and why you should pay attention.

What is Blockchain?

Let's first get an understanding of what blockchain is before we talk about how it impacts marketing.

Blockchain is a digital ledger that resides on a network of computers in a decentralized fashion. 

These transactions once committed, can't be erased or altered they are immutable which gives a very secure and transparent record.

In short:

• It's transparent.
• It's secure.
• It's decentralized.
• It's permanent.

Blockchain technology was originally intended for use with digital currencies like Bitcoin, but its uses in the real world extend well beyond finance.

How Blockchain Solves Digital Marketing Challenges:

#1 Increased Transparency and Trust:

Perhaps the largest issue with digital marketing at present is that there is too little trust. 

Consumers are getting more and more skeptical about data collection, use, and selling. 

Brands similarly squander advertisement budgets on inflationary or bogus clicks and impressions.

Blockchain's immutable ledger ensures all action and transactions are fully traceable and transparent. 

Brands can confirm ad impressions are genuine, and consumers can ensure their data isn't being exploited for malicious intent without their consent.

Example:

A blockchain-powered ad network can allow publishers and advertisers to track live, verified ad impressions, so every dollar spent reaches a real engaged user rather than a bot.

#2 Combating Ad Fraud:

Ad fraud is burning marketers billions of dollars every year. 

Bots, fake clicks, and overstating impressions siphon ad dollars with no real ROI. 

Blockchain can solve this problem by delivering a permanent solution in the form of an open and secure way to guarantee whether ad views, clicks, and conversions are legitimate.

How it works:

• Publishers and advertisers log each event on a blockchain network.
• Smart contracts automatically validate all transactions.
• Bot impressions and fake clicks are rejected and blocked.

By cutting out middlemen and streamlining the verification process, blockchain greatly reduces the scope for ad fraud, dollars saved for companies, and trust.

#3 Data Ownership and Consumer Control:

With the age of GDPR and increasing awareness of data privacy, consumers want control over their own data. 

Blockchain allows consumers to be owners of their data and selectively permit access to advertisers in exchange for incentives.

How it will change marketing:

Rather than businesses scraping users' data without consent, blockchain platforms may enable users to directly sell their data to advertisers using secure, encrypted pathways. 

This may turn the economy of data on its head, putting power in the hands of consumers not corporations.

Example:

Browsers like Brave Browser already use blockchain-driven advertising platforms that pay users in cryptocurrency for ad views while their data stays secret.

#4 Brighter and Safer Influencer Marketing:

Influencer marketing is thriving but is also fraught with fraud in the form of fake followers and engagement rates. 

Blockchain can bring much-needed transparency to the industry.

Through blockchain, brands are able to:

• Verify follower counts and engagement rates.
• Enforce contract terms by holding them accountable through smart contracts.
• Reduce the risk of working with fake or unethical influencers.

This creates a more trustworthy system for influencers and brands, instilling trust and fair compensation.

#5 Decentralized Payment Systems:

One of blockchain's earliest applications cryptocurrency also has the potential to simplify digital marketing payments. 

Marketers can use digital currencies to pay publishers, freelancers, and ad platforms instantly without bank delays, foreign transfer fees, or exchange rate issues.

Benefits to digital marketers:

• Faster payments.
• Lower transaction fees.
• No middlemen (banks, payment processors) needed.

Smart contracts could even make payments after pre-negotiated actions e.g., ad clicks or video views are verified on the blockchain.

#6 Improved Loyalty and Rewards Schemes:

Loyalty schemes are a digital marketing staple, but they're typically cumbersome, difficult to manage, and easy to manipulate. 

Blockchain can optimize these schemes, becoming more efficient and intuitive.

With blockchain:

• Rewards can be securely stored and redeemed with ease.
• Points can be tokenized and moved across platforms.
• Fraud and errors can be minimized through transparent monitoring.

Example:

A customer could gain blockchain-sourced tokens from various brands and exchange them freely, making loyalty schemes more valuable and desirable.

#7 Authenticated Digital Identities:

Identity verification is another area where blockchain shines. Artificial accounts, bot traffic, and identity fraud hurt marketers and consumers.

A blockchain-verified digital identity system could:

• Authenticate real people versus bots.
• Allow the advertiser to target with exactness on verified demographics.
• Let users govern and share their identity data with brands on their own terms.

This change would make online ads more ethical and efficient, as targeting would be directed to actual humans with confirmed tastes.

Examples of Blockchain in Digital Marketing Applied to Real Life:

#1 Brave Browser & BAT (Basic Attention Token):

Brave rewards customers in cryptocurrency for viewing ads, without compromising on privacy. 

Advertisers get correct engagement measurements and lower risk of fraud as well.

#2 Lucidity:

Lucidity uses blockchain to prevent digital ad fraud, offering a decentralized platform for programmatic ad supply chain transparency.

#3 AdEx:

AdEx is a blockchain ad network that eliminates middlemen and focuses on verified, ad-free interaction between advertisers and publishers.

These are early applications, but they show the direction that digital marketing is heading.

Challenges Ahead:

Blockchain is massive for digital marketing, but it's not challenge-free:

Scalability:

Blockchain networks are slow and expensive to maintain, especially for high-speed transactions like online ads.

Adoption:

The majority of companies continue to utilize conventional, centralized infrastructure. 

Blockchain adoption requires technical skills and infrastructure shifts.

Regulation:

Data privacy laws and regulations around cryptocurrencies vary across countries, which could make multinational blockchain-based marketing campaigns more challenging.

Despite these obstacles, the trend is clear: blockchain will play a significant role in reshaping the digital marketing landscape.

Ultimately The digital marketing world is on the cusp of a gigantic revolution, and one of the most influential drivers of the change is blockchain technology. 

From preventing fraud to offering greater transparency, securing proof of ownership over data, and powering new monetization models, blockchain offers solutions to a number of the industry's classic issues.

For marketers, adopting and studying blockchain ahead of the curve could bring a competitive edge. 

As consumers increasingly understand what they are doing with their data and insist on more balanced, more transparent transactions, blockchain could be an essential part of every serious marketer's toolkit very soon.