What is blockchain and what does it have to do with digital marketing?
There’s no need to become an expert on the blockchain, but understanding the basics of this digital phenomenon can be helpful. Blockchain was created by Satoshi Nakamoto, a pseudonym used by a person or group, to be the foundation of the popular Bitcoin cryptocurrency.
The blockchain is a public electronic ledger, that is shared across a network of users that leaves an unalterable record of transactions. Each transaction is recorded with a time stamp and automatically connected to the previous transaction, thus easily traceable and validated. Each transaction is called a block, and the interconnections become the chain—creative naming at its finest.
In order to create a block, the whole network must approve and verify it. Information recorded and stored can never be modified—only built upon. The digital ledger will hold up to date and veridic information about each transaction made in the blockchain.
The blockchains now used beyond finance, including economic, social and even political activities. The essence of this system is to promote peer-to-peer transactions (think torrent file-exchange) while eliminating the (usually slow and bureaucratic) middleman. The safe, transparent, and proven method that is blockchain becomes more popular every day.
People are still finding ways to best use blockchain, but most experts agree that the possibilities for this technology are endless. It will take time for the use of this system to become widespread, yet it seems almost inevitable.
Blockchain For Digital Marketing: Implications and Impacts
The marketing industry is rapidly embracing blockchain due to its flexibility and ability to adapt. Blockchain provides marketers with the opportunity to reduce costs, improve customer relations/ engagements, and maximize resources.
Here are four ways in which blockchain will positively impact marketing:
Eliminate the Middleman
Most major transactions go through some sort of middleman. Even disruptive enterprises such as Uber and Airbnb need an intermediary. Users, in general, need to feel secure that those on the other side of the transaction are trustworthy. Blockchain provides the security and trust that the middleman usually provides.
Online marketing generally depends on middlemen like Google, YouTube, and Facebook. We trust them because they can “attest” to certain levels of efficacy and trust, giving proven results.
But what if you didn’t need them?
In blockchain, all the users are validated and their history is public. Thus, you can see how they conduct business. In marketing, this translates into avoiding spending on a middleman platform.
A smart contract is an automated program that regulates the transfer of goods (cash or services) between users, with conditions needed to be met on an ‘if-then’ premise for the transfer to happen.
A smart contract gives more power to a consumer, allowing them to dictate what data they are willing to provide, sell or buy according to their interest. For marketing companies, it makes their jobs easier. Previously manual and centralized functions, such as vetting, measuring, and monitoring, are eliminated. It allows them to zero-in on specific target markets and buys information as needed.
Take for the example the smart contract workflow of XCHNG, an ‘open and unified blockchain-based framework for the digital advertising ecosystem’.
Digital Advertising 2.0
Digital advertising has transformed reaching markets, as it allows for the targeting and engagement of multiple audiences in a cost-efficient manner.
With blockchain, digital advertising is set to improve its transparency, data-driven targeting, and data-collection from customers. Marketers can now ensure that their money is well-spent in advertising campaigns that convert to sales, while at the same time enjoying more access to data.
Blockchain makes information tamper-proof. Once it has been recorded, the data is stored and sent to different storage networks. Because the storage of data is decentralized, it can’t be meddled with.
For marketers, this means that data insights and analytics provided are accurate; for marketing companies, this means that advertising investment is well spent. Data validation on both sides is guaranteed.
Is Blockchain Right For Your Business?
Now, we know we’ve told you that blockchain is an amazing technology that will revolutionize the way people do business. However, this technology isn’t as mainstream because companies are still identifying how to implement blockchain in their operations. Implementing blockchain requires a significant investment. As such, we recommend you take a moment to weigh your options.
Here are the steps you should take to decide and implement blockchain technology.
As informative as this article may be, you still need more knowledge. You can observe how other companies have done it, specifically those in the marketing industry. There are plenty of online courses on the blockchain, technical consultants, and case studies readily available for you to better understand the technology.
The research will not only help you better understand blockchain but also give you a clearer picture of the value it can add to your digital marketing business.
Once you have decided to use blockchain, you should develop an action plan. First, you must ask the right questions—when, where, what, how, and why are you using blockchain. Second, focus on the operational process that you feel can be streamlined through blockchain technology, whether that’s supply-chain management or customer engagement.
Once you’re able to identify your timelines, alternatives, required resources, and how to implement the technology, you can proceed to the next step.
Raising Capital and Awareness
Once you have done your research and have an action plan, you will need to find the capital to implement this strategy. Most blockchain-related projects are funded through an Initial Coin Offering (ICO), but investment banks are also a viable alternative.
Once you have chosen your means of fundraising, developing a strategy to increase brand awareness will complement your efforts. If you’re in marketing, you can do this in-house.
You’ve got the plan, the money, and the motivation; now comes the implementation. First, you must hire or train staff that can implement the blockchain marketing technology. Second, you must test the platform and make improvements until the system is ready to be deployed. It is recommended to have advisors with experience in blockchain that can provide quality control.
To sustain your success, you can’t stay put after the implementation. Evaluation is important to monitor the efficacy of your platform and to improve it. The blockchain is no different from other projects. You must have a way to monitor and evaluate it.
Finding the right analytics will be a challenge, but if you established your objectives in your action plan, it will be easier. Since you don’t have direct access to your customers, insights, and analytics will be the only way to know if the blockchain for digital marketing strategy has converted into sales.
For more information on how to find the right analytics for you, e-commerce solution Shopify published an extended guide for you to find out which metrics to analyze and focus on to grow your bottom line.
Blockchain Marketing Case Studies
Digital advertising hit a major milestone last 2017, as it overtook TV advertisement spending, according to Magna. By 2020, the research firm forecasts digital ads to take 50% of the spending as clicks, searches, videos, and social media continue to contribute to the steady rise.
With blockchain revolutionizing industries it penetrates, let’s take a look at two companies that have capitalized on blockchain marketing:
Babyghost is a trendy fashion brand that made waves in the fashion industry by using blockchain technology as a subtle marketing strategy. The independent label worked with BitSE and its VeChain Project to verify authenticity and showcase the story behind each piece it presented during the 2016 Shanghai Fashion Week.
Those attending were treated to a unique customer experience—by simply scanning with their phones, a chip in the clothing told them who originally wore the item and how it was manufactured.
With direct-to-consumer marketing as one of the most notable merits of blockchain marketing, BitClave is a marketing platform built exactly on that premise—taking on intermediary giants such as Google and Google AdWords by creating its own decentralized search engine.
On this platform, customers can privately search for what they want and be incentivized to share personal information they allow. Businesses, on the other hand, are able to maximize their ad dollars as the platform ensures a more specific reach to users who are also highly likely to make a purchase since they have already signified interest on the product or service.
Now that you know what Blockchain is, how it has been used, and how it can positively impact marketing, what are you waiting for? Get started today and explore how Blockchain Marketing can help you get ahead of the game, as well as increase your company’s effectiveness and reach. The blockchain is no longer the technology of the future, it is the technology of now. Don’t miss out!