How Blockchain technology can revolutionise Digital Marketing

 

We have all heard the word Blockchain mentioned in the media in recent years, although many of us relate it exclusively to its best known application that are Bitcoin type cryptocurrencies.

But in reality, the concept of Blockchain can be applied to a great number of sectors beyond the financial world.

Digital Marketing, and more specifically Digital Advertising, is one of the corporate areas that will be strongly impacted by the adoption of Blockchain technologies in the near future. And consequently, the companies of the next decade will need to hire talent with a solid knowledge of this new way of conducting transactions over the internet.

In this post, we will talk about the profound impact that Blockchain technology can have on the world of Online Marketing and Digital Advertising in particular.

 

Block what?

 

A little over a year ago, you couldn't open a newspaper without finding an article that talked about how a few nerds had become millionaires buying Bitcoins at the very start of the cryptocurrency boom, and then selling those assets at insanely high prices.

But how on earth can something as ordinary as digital data taveling through copper cables (known as Bits) end up converting into millions of euros?

The following infographic summarizes how a Blockchain structure works:

 

 

 

Without going into too many technicalities, what really interests us about Blockchain in this article are the following concepts:

• Today, there is no way to verify the real identity of a user on the internet. However, in a Blockchain system, users cannot hide or falsify their identity.

• The Internet is currently built based on a largely centralized structure, where most transactions and interactions are managed by multinationals such as Facebook, Google, Amazon and Apple. Blockchain follows a decentralized logic, where interactions occur directly between the company and the client, without middleman.

 

These concepts have a direct impact on digital advertising, as we will see below

 

End click fraud

 

Nowadays up to 20% of the clicks on our paid ads are from spam bots, or from people in third world countries paid by the competition to click on our ads. As a result, an important part of our digital marketing budget is wasted because digital advertising platforms do not allow us to find out the real identity of the user whom we displays our ads to.

Blockchain technologies would solve this problem, since the authenticity of the interactions between advertisers and users (that is, between companies and customers) would be guaranteed by a record of unalterable data blocks similar to the one we have seen in the infographic above.

 

Less dependence on GAFAs

 

Currently most companies depend 100% on Google, Facebook, Amazon and Apple to advertise their products and services.

A peculiarity of Blockchain technology is its totally decentralized nature, which allows secure transactions between two entities without relying on any type of intermediary.

This means that, through Blockchain, an advertiser could directly impact the end user with advertising messages without paying anything to Google or Facebook. Currently these internet giants get substantial amounts of (free) data from their users, which can then be sold to advertisers. In a digital economy based on Blockchain, you could imagine a system whereby users decide to sell their data directly to specific companies of their choice (instead of giving it away to Google and Facebook). In exchange, these companies that have bought our data would have the opportunity to impact us with advertisements.

Such middlemen-free systems would be fairer for everyone, since users would finally receive compensation for the commercial use of their data, and companies would not have to pay significant amounts to GAFAs to advertise to their audience.

 

The arrival of Blockchain technologies in our homes is imminent, and with it a profound transformation of the ways companies interact with customers. Through blockchain, a whole range of new possibilities will open up for both advertisers and consumers. Of course, companies must adapt their Marketing strategy accordingly. And to achieve this, HR departments will need to hire talent that understands the impact Blockchain technology has on Digital advertising in order to take full advantage of this new reality.

 

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