Impact of Blockchain On Digital Marketing
The use of blockchain in digital marketing is yet to mature, with practical implications that have yet to be fully understood. Nevertheless, a survey by marketer data firm CMO shows that marketers expect interest in the emerging technology to grow, alongside increased scrutiny in AI and machine learning.
Some of the recognized benefits that blockchain technology can provide for marketing, range from more reliable data and lower costs for ad campaigns, to a closer consumer connection via improved transparency that can lead to more rewarding loyalty programs.
The possibilities of how blockchain technology can be used in marketing are vast; while some of the applications remain very much in the domain of theory, there are already many examples of companies that have taken a big leap forward by successfully applying blockchain in digital marketing in practice.
Blockchain Applications In Marketing
1.More Reliable Data Insight For Marketers
Today, marketers usually have to rely on data provided by third parties such as Google and Facebook for the success of their campaigns. Although the analytics from these intermediaries are capable of providing results, they come at significant cost, without a way to independently verify the authenticity or accuracy of that data. Recently published unsealed court documents show that Facebook ad metrics can be wrong, showing advertisers blown up data about possible audience size for their ad campaigns. In 2019, a similar issue happened with Facebook video views.
Blockchain technology’s main application in this field is to help bypass the intermediaries who have access to customer behavior and data, enabling companies to interact with their customers directly for their data. When consumers willingly give their data to companies they like and trust, for known specific purposes, data is more likely to be truthful and accurate.
In this scenario, digital marketers can create campaigns where consumers give their personal information directly to the advertiser in return for incentives or loyalty rewards — revenue otherwise retained by intermediaries in the current advertising model.
2.Improving Advertising Exposure
According to Statista, in 2019 25.8% of American internet users had an ad blocker active meaning that a quarter of paid ads never get seen. This is a significant increase compared to 2014 when only 15.7% of users had ad blockers enabled. The forecast shows that the trend will continue to grow in 2021.
To battle this problem, Brave browser came up with a business model where their users would get paid a share of advertising revenue in blockchain-based BAT tokens in exchange for viewing ads. Within a year of launching their ad platform, Brave delivered 1,530 ad campaigns with a 9% click-through-rate compared to the industry average of 2%.
Moreover, they eliminated the privacy issues by designing the platform in a way that all “ad matching happens directly on the user‘s device”, so the user‘s data is not shared with anyone, including Brave.
This is a clear demonstration of how the transparent process in blockchain models can be successful in increasing ad exposure. By revealing the specific company accessing the data, as well as handling consumer permissions with regards to their personal data, Brave was able to improve ad distributions and click-through-rates. This also encourages consumers to give their real information, as some people simply chose to disclose false information or disable cookies due to privacy concerns.
3.Preventing Click Fraud
Click fraud is another common problem that digital marketers are facing these days. This kind of fraud usually happens when a third party clicks on banners and paid ads deliberately without the intention of making a purchase. According to the CHEQ report, this kind of fraud caused $3.8 billion of loss for eCommerce alone by the end of 2020.
The transparent nature of blockchain makes it easier to track and identify whether the traffic is coming from valid sources. California-based company Lucidity, for example, came up with a model which blacklists websites with a high level of impression and clicks discrepancy. Their partnership with Toyota resulted in a 21% lift in the campaign performance.
The way that blockchain models allow for results to be verified and authenticated, helps ensure ad budgets aren’t spent on fraudulent results but on real viewers linked to their own personal digital signature. This way, companies obtain more reliable information for cheaper, with a more precise measurement of ROI.
4.Blockchain-Based Loyalty Programs
Loyalty programs are a powerful tool that companies use to retain customers. However, many of these programs fail to meet the expectations, and most of the loyalty points are left unredeemed. Furthermore, there is the question of data security problems, high logistics and maintenance costs as well as lack of incentives to really improve customer experience.
What traditional loyalty programs lack, blockchain technology can compensate. The technology allows all participants (consumers, credit card issuers, service providers, etc.) to be connected in one streamlined process where all the changes are secure, transparent and recorded in real-time.
Blockchain in digital marketing also makes possible collaboration between different service providers so that consumers don‘t have to be limited to where they spend their loyalty points, by onboarding merchants and service providers on to the same blockchain network. For example, they can choose whether they want to use airline loyalty points on their next trip or to get a discount at the hotel they are staying at.
Another perk that consumers would find useful is the ability to track their loyalty points with ease and even trade them with other members in the system without disclosing their details — simply by trading tokens with transactions verifiable and trackable on a public blockchain.
Some of the big players in this sector such as American Express and Mindtree are already implementing this in practice thanks to successful integration with the Hyperledger Fabric framework.
The Future Is Decentralized
Without a doubt, we are witnessing the birth of revolutionary technology that has the power to change the world as we know it. The evidence is clear, from the way that big companies such as IBM, KPMG, Deloitte, and Toyota have tapped into this field by utilizing blockchain to improve many different industries.
Marketers also are starting to see its potential value to both advertisers and consumers. Companies like Lucidity and Brave recognized this, and now have real use cases, proving that blockchain in digital marketing can be used with great success.
On the flip side, there are a few difficulties that put blockchain at disadvantage, such as a lack of general knowledge, small audience size, scalability, and energy use. But these are normal teething problems for any new technology and many solutions are already starting to appear.
Based on the existing research and use cases, it‘s clear that blockchain has the answers for some of the key problems that trouble marketers today. Blockchain technology is still relatively new and will take some time to overcome adoption hurdles before it becomes widely used in marketing.
In the meantime, digital marketers should definitely reevaluate their options, embrace the potential for positive change, and start exploring this new technology to stay ahead of the curve.