Blockchain tech has expanded beyond recording cryptocurrency transactions. Telecom companies, transport and logistics firms, retailers, healthcare providers and media companies use blockchain daily for a wide variety of purposes.
Now, the technology is coming for the digital marketing sector. Advocates promise that blockchain will reduce ad fraud and protect customer data. They also want more money to go to owners of blogs and news sites for allowing ads on their sites.
We’ll define blockchain, explain why people get excited about it and provide four potential uses of blockchain in digital marketing. We’ll also evaluate how likely today’s digital marketing giants are to adopt the technology.
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What is blockchain?
A blockchain is a database that records information. Supporters of the technology argue that it has two compelling and unique selling points over a traditional database:
- Blockchain databases are transparent. Unlike with a standard centralized database or ledger, multiple independent parties hold copies of the database, which cross-reference each other for accuracy. Members of the public can check more than one database to verify an individual data record.
- Blockchain databases are immutable. Data cannot be changed after it has been entered onto a ledger. If a mistake is made, a new data item must be added to the ledger to reverse the previous one. Both items of data exist and are visible on all copies of the ledger.
Any data can be stored on a blockchain. Until now, the main type of data it recorded was cryptocurrency transactions.
How will blockchain affect digital marketing?
Here are four ways blockchain could be used in digital marketing.
1. Keyword tracking
What one person sees on Google is often unique to them. Results seen by other searchers will depend on their location and the device they’re using. This makes it challenging for marketers to track keyword rank.
If blockchain were integrated into search, individual page rankings could be stored on the blockchain; location and device usage data could be stored with the ranking position.
Marketers could use this information to understand what actions they need to take to improve in areas and on devices where they’re not doing well. The same data could be used to determine why some locations are featured on Google Local Pack results and others are not.
Change your address on Google and Yelp if it’s wrong. Having the wrong address hurts your chances of appearing in the Google Local Pack.
2. Improved lead quality
Consumers who give your brand their data are likely interested in your company. This makes it much easier to score leads and conversions, because these are already prospects ready for nurturing.
Currently, data collection for marketing takes a varied approach. Many marketers collect data from a variety of sources, put it all together and run a campaign based on that. This method is imperfect, and many campaigns run from inconsistent or incorrect data.
Because blockchain transactions are decentralized, marketers have to go right to the source: the consumer. One such example is Brave, which has built a browser that blocks ads. While that’s not new, it does display ads to its users that it sells to companies via its Basic Attention Tokens (BAT). Users get 70% of the value of the tokens, while Brave gets 30%.
How does Brave target ads? Users give the company as much (or as little) personal data as possible. Advertisers select audiences from the demographic data Brave holds, without ever knowing the identities of the people seeing the campaigns. This may be a new model for the future.
3. Tools for tackling ad fraud
As marketers know too well, there is frequent fraud in advertising. Verasity reported that by 2023, advertisers could lose about $100 billion to ad fraud. To combat ad fraud, Verasity’s VeraViews tool uses blockchain to analyze first- and third-party data to determine a score reflecting how likely it is that a user actually saw an ad.
Tools such as these promise advertisers that they will pay only for valid views and publishers that they’ll be paid more and faster because of the speed, accuracy and immutability of the blockchain.
4. Better transparency for consumers
Authenticity is vital for any brand that wants to attract Gen Zers and millennials. So is supporting causes such as fair trade and environmental issues.
For example, a hot-drinks brand could use blockchain to publicize its supply chain. Someone who wants to purchase ethically sourced coffee might check the blockchain of a brand they’re considering using to find out who grows their beans and how much they get paid. They could track the entire life cycle of that brand’s coffee, to see when it leaves the farm, how long it was on the ship, and which facility ground the beans. Consumers could even see the average temperature the coffee beans were stored at on the transport ship.
Blockchain offers transparency, and its immutability means it can be trusted. Brands could benefit from greater efficiency and lower transaction costs.
What businesses or industries will blockchain tech affect?
The global digital marketing software sector was valued at $56.52 billion in 2021, according to Grand View Research. This value is expected to grow at a rate of 19.1% each year until 2030. But how big of a role will blockchain play in that growth? It’s too early to tell, but initial signs aren’t promising – yet.
Market leaders seem unaffected by blockchain tech right now
Google, Facebook and other tech giants have invested hundreds of billions of dollars among them to create the following:
- Enormous demographic databases covering billions of people around the world.
- Advertising platforms that work well enough to deliver clients what they want and that they keep coming back to.
The commercial advantage of incorporating blockchain for these companies is unclear, as it would require the partial or full surrender of their control.
Blockchain may work for ad demand-side platforms
Blockchain is making progress in selling ads on third-party sites, similar to Google AdSense’s business model.
Common complaints with incumbent systems are that they’re too susceptible to click fraud and that publishers get shortchanged because of the number of intermediaries, such as demand-side ad platforms.
One of the biggest pushes in this direction has come from IBM and Mediaocean, which have been trying to create a blockchain-based AdSense-like network. They are not alone, however, and competition has been increasing in this space.
No blockchain social media platform has found major success
A number of blockchain social media companies have launched and subsequently struggled. Consider these examples:
- Peepeth: This Twitter-inspired platform was set up to promote “mindful discourse and effective altruism.” Its last Twitter update was in January 2021.
- Sapien: This social news platform is like a cross between the Facebook news feed and Pinterest. It has only about 1,000 downloads from the Google Play store.
- Steemit: This social network allows creators to make money from user-generated content based on a system of upvoting. It claims to have paid out $59 million to contributors since its launch.
Previous blockchain-based social media apps, such as Sociall and WildSpark, also floundered. In fairness to these apps’ creators, it’s almost impossible to create a new social platform that scales quickly enough to benefit from the “network effect,” which the leading platforms enjoy regardless of whether they’re blockchain-powered.
Social media influencer marketing fraud is a big problem in which “influencers” charge for access to mostly fake followers. Search the internet for “fake follower tools” to find apps that can help you determine the quality of an influencer’s following.
Advertisers and publishers seem happy with the status quo
Brave has carved out a nice niche for itself; it now has 19.3 million daily active users and 1.6 million content creators. In addition to its “Rewards” feature, the company has launched its own search engine that will soon offer paid-for search advertising; users can opt-out of this service by paying for an ad-free experience.
Advertisers are not putting any significant pressure on lawmakers to further regulate existing digital marketing platforms, let alone compel them to adopt a blockchain model. However, as the technology matures, they may choose to adopt it for potential cost savings.
Right now, it’s hard to see blockchain influencing digital marketing trends in the short to medium term. But keep an eye on developments in this dynamic sector. Remember, 15 years ago, few people thought cryptocurrencies had a future, and the vast majority were wrong.