- Digital Marketing in the Age of Blockchain
Marketing and advertising have come a long way since the Mad Men-esque soirée of the 1960s.
For a long time, the marketing industry was comfortable with traditional formats. Who are these young upstarts they wondered..who suddenly dared to eschew time-tested channels of print, direct mail and television commercials in favor of some mumbo jumbo called digital marketing?
Never in their wildest dreams (and these were among the most creative people on the planet mind you) would they have imagined that the marketing world as they know it would undergo such a massive makeover.
Times they are a changin’
There was no stopping the inexorable tide of change that came with the internet in the 1990s and later, mobile smartphones — innovations that disrupted almost every industry and spawned many new ones. In some developing countries today, mobile and internet penetration rates are even higher than that of people who have bank accounts!
For the first time in modern history, marketing to a mass audience does not necessarily entail engaging an ad agency, buying expensive TV commercial spots, placing huge billboard ads near highways, or dishing out hundreds of paper brochures on main street.
An entrepreneur can execute a basic marketing campaign entirely online, in the comfort of the bedroom. From designing a creative draft on Canva, to getting it polished by an overseas freelance graphic designer on Fiverr, to targeting millions of people around the world using Facebook ads and Google Adwords, and generating quality leads via Mailchimp, these tasks are accomplished at a fraction of what they used to cost with traditional marketing.
In fact, without paying a single cent, it is possible for a well-designed blog or entertaining YouTube channel with consistently good content to gain the level of brand awareness and inbound viewership statistics some traditional agencies of the past could only dream of.
It is no surprise that digital and social media marketing have become a staple in most marketing campaigns of the past decade. In the United States alone, digital marketing expenditure is expected to hit levels close to $120 billion by 2021!
However, digital marketing is rife with its own set of challenges, and the same technology that has unleashed the potential for good marketing, has also allowed the proliferation of advertising fraud, loss of privacy and data, brand overexposure and other digital-based problems.
Fortunately, where there are problems, there is opportunity for innovative solutions to arise.
A new technology has emerged in recent times, poised to challenge our preconceived assumptions on how businesses are typically run and radically disrupt the marketing industry in a similar fashion to how the internet and social media once did.
Enter The Blockchain
“Blockchain technology is going to influence the media and entertainment industry at a much more rapid pace than we ever thought possible ” — Gowthaman Ragothaman, Global Chief Strategy Officer at Mindshare
When the mysterious Satoshi Nakamoto (pseudonym) first introduced the world to Bitcoin and its underlying blockchain technology in the aftermath of the 2008 financial crisis, it remained predominantly within the realm of hardcore computer geeks, cryptography enthusiasts or agents of the dark web.
It was only in the past couple of years, especially from end 2016, when blockchain technology and cryptocurrencies in general really came into its own and became a mainstream media darling.
What is the blockchain? A blockchain is simply a set of advanced computer code which records data. As more blocks of data are recorded together, the security of all the data is further reinforced. Slightly similar to how multiple participants can view the same changes occurring on Google Docs, data recording is achieved in a way that for the very first time, is decentralized — not controlled by one party, and secure and transparent to everyone and anyone in the world who has access to a computer. Thus a blockchain is said to be akin to a ‘publicly distributed’ accounting ledger.
Cryptocurrencies like Bitcoin and Ethereum are digital coins that are minted/created electronically on a blockchain, and are necessary elements to incentivize participants contributing to the blockchain’s ecosystem.
The most revolutionary aspect of a blockchain like Ethereum is its ability to execute smart contracts — the automatic administration of conditional computer rules and protocols (like an advanced Excel IF-THEN conditional format) that can steer the direction and the terms of a blockchain transaction or agreement.
A contractual agreement in the real world requires multiple parties to trust each other and manually manage the entire process. With smart contracts, all transfers of value, for example the purchase and delivery of a digital advertisement, are done seamlessly according to pre-written computer code, without two parties needing to trust each other. The inherent transparency and efficiency within blockchain technology promises opportunities that are unprecedented in the history of the internet.
Today, the Ethereum Enterprise Alliance (EEA) boasts many famous Fortune 500 businesses like tech giant Microsoft, security stalwart Cisco and investment bank J.P. Morgan. The Blockchain in Transport Alliance (BITA) was also formed to bring together leading companies in the freight technology and supply chain industries that have a vested interest in the development of blockchain technology and counts well-known companies SAP and FedEx as key members.
In recent months, the ECB, the SEC and CFTC have publicly acknowledged the growing importance of blockchain technology. USA, Switzerland, Gibraltar, Australia, South Korea and many other countries have begun serious discussions on establishing a regulatory framework around cryptocurrencies. Japan is an early tech adopter and has led the pack by already legalizing cryptocurrencies.
With evidently increasing governmental and institutional recognition and support, it is only a matter of time when digital marketers have to adapt to the encroaching influence of blockchain technology on the marketing world.
What does it mean for the next decade of digital marketing? More importantly, how can we as digital marketers tap on this brand new technology to enhance what we do best — tell engaging stories and provide value to both our clients and audience?
Here are some examples of how blockchain technology has started shaping the digital marketing and AdTech landscape of the future.
1. Replacing the proverbial middle man
Many businesses are essentially intermediaries helping customers connect to a seller of a product or service, and getting a commission from administering the process. Uber connects commuters to car drivers. AirBnb connects rent-seekers to apartment owners with spare room.
In digital marketing, Facebook, Google Adwords, ad exchanges and networks are platforms that help connect advertisers to publishers or their target audience.
Through this traditional service chain, a lot of money is pocketed by intermediaries, even malicious ones like ad click farms. Popular platforms like Google and Facebook take up to 73% of all ad dollars. Shouldn’t more remuneration be given instead to parties who contribute the most value — the creatives and publishers that develop and deliver the ad, as well as potential customers who eventually buy the product?
Utilising a blockchain’s automated smart contract, media buys can now be executed efficiently with full transparency. A company seeking to advertise to a specific customer profile can bypass the purchase of ads through Google Adwords and its associated fees, and instead pay only for quality views from potential customers who have already indicated their specific interests and preferences the minute they log into the internet.
AdEx is a decentralized ad exchange on the blockchain built to facilitate the entire relationship between publishers, advertisers and end users. AdEx eradicates all the complexity, inaccuracy and inefficiency that comes with the current network of multiple exchanges, programmatic supply-side platforms (SSPs) and demand-side platforms (DSPs), thus allowing payments to flow directly between advertisers and publishers, with no intermediaries. As a result, an optimized, fair and transparent ad bidding process is achieved.
2. Redefining digital advertising
We often get annoyed seeing repeated ads that do not pique our interest, or worse, lag our computers whenever we are using Facebook, YouTube, Gmail and other websites. On top of that we pay more telecomm fees for the extra bandwidth used to load these ads and ad trackers on our mobile devices. Many people naturally disapprove of the effects of the current digital advertising model, and it is predicted that by 2020 ad blocking will cost publishers an estimated $35 billion in revenue.
This unique business model has the potential to truly revolutionize digital advertising and how ads are created, delivered and measured. Digital marketers can also receive more bang for their buck by devoting ad resources only to customers who have a very high potential of purchasing a product.
Perhaps most importantly, users get to enjoy an incredibly refreshing and seamless web-surfing experience without any annoying, low-value ads.
3. Removing ad fraud
Due to an estimated 52% of website traffic coming from bots, it is extremely challenging for digital marketers to attribute their metrics performance to real, authentic reach. In a desperate attempt to reach their desired audience, companies pay a substantial amount of money almost in a ‘brute force’ approach to spread awareness through digital ads. But ad fraud prevents these campaigns from capturing the best value and obtaining more sales.
With blockchain technology, an advertiser is now able to track an advertisement throughout its entire life cycle, from creation, to programmatic media purchases, to precise publication, attribution and performance measurement.
AdBank is engineering a marriage between the two major topics in the tech world today — Blockchain and Artificial Intelligence, banking on this powerful union to create a system that automatically differentiates between humans and bots, so that advertisers only pay when it has been verified that the right (human) audience has seen and interacted with the ad.
Mindshare, the global media agency that is part of the WPP group, has partnered with the ultra fast Zilliqa blockchain project to experiment with solutions addressing pervasive ad industry challenges including contextual advertising relating to fake news and to develop strategies around data privacy and publisher quality scoring.
4. Real and transparent product reviews and product provenance
A huge part of the draw of blockchain technology is its immutability — existing information is easily audited and you cannot make alterations without the rest of the world knowing. This makes it well-positioned to tackle the lack of transparency and accountability in the complex worlds of supply chain, loyalty programs and digital marketing.
VeChain Thor leverages on RFID, QR code and IoT technologies to provide detailed real-time tracking of a product’s journey from manufacture to eventual sale and delivery. This opens up interesting branding opportunities for marketers; seeing how the product, for instance a designer dress or Louis Vuitton bag, was made and the process it took to reach your home just by scanning a tamper-proof label lends a sense of originality and emotional connection to the product and brand story.
Monetha is developing a decentralized trust and reputation system for the e-commerce industry, ensuring that each online customer review (of course, also the seller’s review of the customer) is automatically tied to an authenticated, verified identity and companies are not able to boost their rankings by bumping up multiple fake reviews.
Likewise, Gatcoin is creating a transparent loyalty platform on the blockchain where customers are unable to fake loyalty points accumulation, and are able to convert traditional discount coupons, shopping vouchers and points into liquid digital tokens, that can in turn be traded and sold for real Fiat cash.
5. Robust market research and consumer trends forecast
Useful and accurate market sentiment is pretty hard to come by, and digital marketers usually need to conduct extensive research and surveys, and fork out much more than a penny in order to have only a small glimpse into consumers’ thoughts. Moreover, current centralized surveys depend on trusting a single agency, hence there is always a risk of mistakes and data manipulation occurring. Yet business decisions continue to be heavily guided by data gleaned from such market and consumer research.
An interesting development in the field of consumer psychology and behaviour is online predictive markets, and the blockchain takes it up a few notches.
Augur, which plans to go live in 2018, is a decentralized prediction market system which taps on the wisdom of the crowd to predict future events, supported by the transparency and efficiency of blockchain smart contracts.
Participants can bet on the result of a variety of topics and events and earn cryptocurrency called Reputation (REP). With Augur, digital marketers will be able to “Google search” for the next exciting consumer or internet trend that has yet to happen.
6. Regaining ownership of your personal data
Netizens are often active on more than a few social media networks and mobile applications. They end up creating new profiles and generating new behavioural and psychographic data every time they sign up for the next exciting platform. However, the valuable information stored in each previous centralized platform or app cannot be transferred out to other counterparts easily, and is often exploited by intermediary companies for profit without any kickbacks to the users themselves.
Dock.io has developed a decentralized system on the blockchain that lets people easily posssess a federated identity, connecting their profiles, reputation and experiences across different web platforms in a private and secure process, thus preserving and enhancing the value of users’ unique web data.
Datawallet’s digital crypto wallet enables users to monetize their data by selling it directly to data brokers and market research companies for crypto tokens, which can in turn be converted into actual Fiat cash. Likewise, BitClave as a decentralized internet browser, compensates users with crypto tokens for the right to use their web-surfing behaviour and search data.
Online consumer data is going to be the most valuable natural resource of the next decade. With such developments in the pipeline, digital marketers will soon have reliable sources for the collection of targeted and precise consumer data, and are able to incentivize users for more valuable information in a fair and transparent manner.
7. Rewarding and empowering content creators
Influencer marketing is an important option in the digital marketing toolkit. But current social media platforms such as Facebook, YouTube and Instagram, take a huge chunk of the advertising dollars, leaving most content creators with puny scraps.
In order to realistically make a living as an influencer, you have to be in the top percentile in terms of followers or views, i.e in the millions. This business model discriminates content creators with an average number of followers — say 50,000 — even if they produce good quality content. Over time, such a system is very likely to turn away hidden online talents who are unable to upkeep their passion.
Gifto presents a new decentralized solution by which fans can directly, peer-to-peer, send monetizable virtual gifts (i.e. a virtual rose or Mercedes-Benz that can be sold for real cash) through the blockchain to their favourite artists, musicians, idols or friends. Social media influencers and content creators are now empowered with a direct revenue stream straight from their audience, and do not need to depend on centralized intermediaries such as YouTube.
This is a powerful disruption to the $2.2 billion digital content consumption market, and digital marketers should realize the huge marketing and branding opportunities that comes with virtual gifting and digital collectibles. For instance, Mercedes-Benz can launch a viral marketing contest where a social media influencer who is able to generate hype and mobilize his/her online audience to send over the most number of (virtual) Mercedes-Benz SLK cars, wins an actual one in real life.
Preparing for a digital marketing future underpinned by the blockchain
Marketing has always been about good storytelling, but the methods to communicate the story have definitely evolved and will continue to do so over the years.
To be the very best in our field, we digital marketers need to always be at the forefront of bleeding-edge technology, so that we can access the most effective means to excite and enrapture our audience, and provide the best value to our clients.
The advent of blockchain technology and its more advanced iterations will soon provide the foundation for the digital marketing tools of tomorrow. The onus is on digital marketers to start understanding and harnessing the potential of blockchain technology today.
Read about other crypto-related stories and ICOs at chainhammer.io
- Date of publication:
- Sat, 02/24/2018 - 12:41
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