Blockchain is a lot like Bitcoin: Most people pretend that they know what it is without really understanding it. You may have a general idea but not truly grasp its purpose or usefulness. With the blockchain buzzword infiltrating marketing conversations at water coolers and keynotes across the country, there’s no better time to clear the air and give the simplified version of how blockchain is revolutionizing the marketing world.
So what is this ambiguous blockchain? Most people are familiar with the term as it relates to Bitcoin. In 2008, blockchain was created with advanced technology for the use of cryptocurrencies. It is unknown who founded blockchain, but the founder or founders go by the pseudonym Satoshi Nakamoto. Today, blockchain is used for more than just finances. It is now defined as the incorruptible public ledger that can record transactions anonymously.
Great. But behind the lingo and technology, what does that actually mean? Imagine a spreadsheet, like Google Sheets, copied thousands of times over on a network that automatically updates the spreadsheet. This is the basic idea behind blockchain. The information that is entered cannot be altered. The information is all public and easily accessed.
Blockchain is frequently used to make contracts. In recent years, a document would have to be sent back and forth by mail or email, revised, sent back, revised, sent back… You get the picture. Documentation was a long, drawn out process. With blockchain, documents can be changed instantaneously saving companies lots of billable hours from attorneys.
Blockchain is a decentralized entity. This means there is no single place that all information flows from. Hackers are extremely unlikely to alter blockchain because it is not owned or controlled by a single person.
Blockchain & Marketing
Blockchain is rapidly changing the marketing industry. A public, accessible system may seem intimidating, but it’s actually an effective way to build rapport with consumers. Utilizing blockchain, instead of resisting it, can remodel the way we perceive marketing.
Eliminating the Middleman
In financial terms, eliminating the middleman means eliminating banks and heavy fees. In marketing, this means eliminating Facebook, Google, and Instagram to reach customers. For now, marketers are only getting about half of their value because of these intermediaries. Blockchain gives users the ability to communicate directly with site owners to publish an advertisement. Mediators no longer have to sign an agreement for ad campaigns. Eliminating the middleman means doing away with fees, paperwork, time, and all the hassle that comes with it.
It’s a marketer’s job to build trust in the product being advertised. If a consumer can’t depend on the message’s truth, they won’t purchase the product. The key to building trust is transparency. For example, Walmart is using blockchain technology to publicly track their pork products. Customers can see exactly what they’re getting and where it’s coming from, leveraging IBM’s Blockchain platform to build consumer confidence.
Blockchain can assure consumers of exactly what they’re getting. When customers have full, public access to their questions and concerns, they can feel certain in the service and products they receive. Honest companies and honest advertising will increase customer loyalty.
Along with trust comes public accountability. Since the creation of advertisements, the public has been asked to take an ad’s messaging at face value. Consumers have become increasingly wary and on constant look out for counterfeit or deceptive ads.
Blockchain can hold ads accountable for what they promise. All records and contracts are public and easily accessible, bringing a new level of transparency to the advertising experience. Much like Walmart tracked their products through blockchain, companies can tell a story about their product and build the customer experience. When customers see who modeled their handbag on the runway, their purchase becomes more than just that: it becomes an experience. When it comes to Blockchain and marketing, knowledge is power.
Targeting Consumer Segments
Entities like Facebook and Google can give marketing leaders a great deal of information about their targeting audiences, but rarely a complete profile. With blockchain, all of the information on consumer is available instantaneously. This allows market leaders to focus their ad campaigns on the exact segment for a product, eliminating waste on consumers with no interest in the product.
Using a technology like blockchain or Bitcoin shows a sense of forwardness in a business. From a marketing standpoint, a company that leverages blockchain to ensure transparency and trust is one that consumers will follow. An entire PR strategy can be created for a company embracing this innovative technology.
Blockchain is still fairly new and has had mixed results so far. Many believe it will become the next iteration of the internet, while others are convinced it’s a temporary fad. If the technology lives up to its promises and potential, the marketing field is about to be turned on its head. The transparency and branding that come along with it can greatly decrease costs while increasing ROI. Embracing this technology now will give marketers the head start they need in this increasingly technology dependent society. Those who reap the benefits now will maintain a first-mover advantage and enjoy increased customer loyalty.
13 Ways for Marketing Leaders to Use Blockchain
- Verify ad effectiveness
- Verify engagement
- Prevent ads from over serving a single audience
- Easy payment
- Pay customers for their data (behavioral or psychographic)
- Show customers how their data is used
- Compensate customers for bringing content to an ad campaign
- Verify authentic engagement and eliminate ad fraud
- Verify approval of ad campaigns
- Minimize hackers and spam
- Authenticate all contracts
- Build customer rewards programs
- Monitor communication between brands and consumers