Blockchain in Marketing
Since the advent of the internet era, the global advertising industry has been constantly developing new ways to reach specific groups of users, with ever more targeted messaging strategies. The industry however has been plagued by a labyrinth of intermediate parties, not always in human form - a recent estimate suggests that up to half of current ad traffic is managed and generated by bots. With the competition fierce across most ‘business to customer’ and ‘business to business’ industries, companies are paying more than ever in order to make sure their message gets in the right place, at the right time.
One market research company, Forrester, predicts that digital marketing spend in the United States alone can increase to $120 billion by 2021.
How Blockchain Can Change Marketing
The global advertising market has been hit hard by a multitude of murky middlemen and fraudulent behaviour, with fraud bots alone inflicting over $7.2 billion loss in 2016. Marketing is expected to undergo a significant blockchain disruption, by revolutionising martech and especially advertising. Within the context of broader blockchain in marketing, it’s easy to envision advertising platforms where all relevant performance and audience information is processed and actioned via a decentralized ledger. Adding blockchain to the equation of the overly complicated modern advertising industry removes a lot of confusion about marketing variables such as ad delivery specifics. When a business issues a request to an advertising ledger for a specific message, it can then check back once the request has been fulfilled in order to benefit from an immutable record of the ad’s delivery time, duration and performance. The decentralized nature of the blockchain in this case could help usher in a new era of transparency and efficiency to a businesses’ advertising efforts. This would reduce the risk of fraudulent traffic reports, cut out the intermediaries needed to complete the advertising request and allow for multiple ad requests to be taking place at the same time.
According to a Forrester Research paper, for every $1 an average business invests in advertising, it only receives about $0.44 in return.
The rise of advertising efforts by a single business has gone hand in hand with a general sense of distrust from the general public increasing as well. Hundreds of ad blockers and privacy shields, technological quirks and browser extensions help hundreds of millions of users bypass trackers and distort usage statistics every day. While this feeling of distrust might not disappear overnight, the immutable, public option of a ledger could help a particular advertising network bridge this divide by showing consumers exactly how the data is used and who it is sold to. Blockchain technology also allows for token distributions through which the end receiver of the advertisement can have greater control over which ads they watch and, in some instances, can actually receive market-determined compensation for their attention, which would add a new interactive dimension of the world of online marketing.
Blockchain and Data Insights
When it comes to digital marketing, the return on investment of a potential advertising campaign is not the whole success story. What is even more important is the collection of huge swaths of data every potential customer produces on a daily basis. The ‘big data’ revolution has allowed businesses to benefit from an astounding amount of business intelligence and user insights, so as to better tune their advertising strategy, brand visibility and, most importantly, product development. Currently, the majority of ad traffic is centralized on social media and internet traffic giants, such as Google or Facebook, who make sure to take a hefty profit of every message that reaches their users. More so, centralization of usage data on their platform allows them to control the insights it generates and make significant revenue selling it to potential buyers. Blockchain in marketing projects poise a serious threat to traditional digital marketing avenues, by threatening to undermine the power of these big enterprises. In turn, users gain much greater control over their data and single businesses are able to reach them directly. For example, it is easy to envision a blockchain-based search engine, where users can directly choose what types of data they are ready to share with a potential advertiser. By doing so, the advertiser can buy the data directly from the user as opposed to the platform that has hosted the interaction.
Blockchain and Influencer Marketing
Rise of social media in particular has added another flavour to the exciting work of digital marketing, namely the arrival of influencers. Towards the end of 2010s, this social media phenomenon has permeated most industries - points of authority and knowledge leaders can drive public opinion and conversions across a variety of verticals, from consumer and fashion, to business-to-business and financial investment. A blockchain based, trustless influencer network can help businesses bypass hefty fees charged by nascent influencer agencies, while smart contracts can help enforce both the publisher and the performer to live up to their sides of the agreement in a quantifiable way.
All in all, the arrival of blockchain in marketing and advertising can be seen as bittersweet for the industry as a whole. This is because it might make some professions within marketing destitute as it bypasses unnecessary middlemen and third entities. For a single business however, blockchain-based advertising networks have the potential to radically improve marketing activities and propel them towards more ad delivery accuracy and user responsiveness. Here at Lisk, we’re looking forward to assisting martech visionaries in bridging the gap between the business and the end receiver, in a level playing field where both can benefit more accurate messaging.