The interesting thing about blockchain is that it has made it possible for humanity to reach a consensus about a piece of data without having any authority to dictate it. – Jaan Tallinn
The meteoric rise of bitcoin valuations and other cryptocurrencies have put blockchain technology — the force behind these digital currencies — on the center stage. For the uninitiated, blockchain technology might look daunting; but for starters, we can compare it to a public decentralized ledger. Without boring you with the technical details, let’s dive straight into how it is set to disrupt the digital marketing ecosystem. While it is a no-brainer that the finance industry is the first adopter of blockchain, its possibilities are endless for innovative marketers.
50% of every dollar spent in advertising is lost to either fraud or intermediaries, and blockchain can address both these concerns. That directly and positively impacts the bottom line! No wonder there has been a 400% increase in adoption in the last two quarters.
A simple illustration below shows how the block of digital transaction is secured and added to the chain:
The north stars of Blockchain are:
- Consensus is achieved among peers rather than at a centralized location
- Everything is documented and verified
And here is why we foresee this to disrupt marketing in the coming years.
Almost two dozen top brands across industries have made heavy bets on transforming their businesses with blockchain. A few early adopters being IBM, Amazon, Cisco, Air France, De Beers, and Western Union.
Search Engine Marketing (SEM):
In the SEM world, Google and the like, act as middlemen between website owners and advertisers. They provide a vetting platform that acts as a medium of trust, and is a paid service. Imagine the same with blockchain, where website owners would not have to go through an intermediary to find advertisers — the credibility of each user would already be validated and verified. This makes the monetary aspects transparent as well. Eliminating the digital middlemen results in a decrease in extra costs and an increase in profit margin.
Ad fraud is another problem that costs the industry billions every year. The distributed ledger is a cornerstone of blockchain which helps reduce online fraud, and provides a way to authenticate an online user while protecting their privacy. Microsoft, IAB, and DMA are pioneers in this area of identification systems.
With growing concerns about end-user privacy, blockchain can be a game-changer in this regard. Giving the end-user complete control over their privacy and contact information lets them dictate the when, what, and how they see an ad. This puts the consumer in the driver’s seat, and a user can even charge a price for consuming the advertising material. This will challenge a marketer to improve their quality of content and interaction.
Traceability and Trust:
The web has made the boundaries of the supply chain network almost seamless. More often than not, the consumer wants to track and trace the authenticity of the products purchased. The most crucial yet intangible resource is customer trust, which is hard to win and easy to lose. Transparency makes way for this trust, and blockchain marketing is the linchpin for ushering in the much sought-after transparency. A case in point is Walmart who partnered with IBM to make their supply chain process more open. Customers could see behind the scenes — starting from the stock procurement to the point of sale. Needless to say, their brand image and customer loyalty has soared since.
While all these are nice to have, with the promise of the golden pot at the end of the rainbow, getting there for most companies is not easy. Firstly, there are both hard and soft skills that need to be unlearned and relearned to harness the technology. The top management needs a paradigm shift on where to start and how to transform digitally, without missing the big picture. Lastly, for blockchain to be pronounced a success in marketing and advertising, it needs that one big success story for others to quickly follow suit — and yours could be the one!