Something that cannot be discussed is the fact that Blockchain is an incredibly genius invention, it can be considered brilliant or problematic; depending on the person who criticizes it.
This is the creation of a person, or maybe a group of people -it is not clear yet- under the pseudonym of Satoshi Nakamoto. However, what is exactly the Blockchain?
As published in a recent post at Investopedia’s website, a blockchain is “a digitized, decentralized, public ledger of all cryptocurrency transactions. Constantly growing as ‘completed’ blocks (the most recent transactions) are recorded and added to it in chronological order; it allows market participants to keep track of digital currency transactions without central recordkeeping”.
Each node (a computer connected to the network) gets a copy of the blockchain, which is downloaded automatically.
In addition, IBM CEO Gini Rometty describes blockchain as “The underlying technology that allows you to have trust and efficiency in the exchange of anything. This will have a profound change in how the world works. Blockchain will do for transactions what the internet did for information.”
Fred Schebesta from singlerain website affirms the Blockchain system has many uses, it allows information to be stored and distributed, but not copied. It is the ultimate peer-to-peer network.
An easy way to explain the Blockchain is by saying it is a global spreadsheet, not only in financial terms but virtually in every kind of matters that have value and importance to humans.
Other uses are: birth and death certificates, marriage licenses, deeds and titles of ownership, educational degrees, financial accounts, medical procedures, insurance claims, votes, transactions between smart objects, and anything else that can be expressed in code.
These types of systems make every relationship safer as the person do not need to trust in the other part because the platform ensures the integrity of the entire process.
Some of the highlights of blockchain are:
- It cannot be controlled by any single person or entity.
- Nobody is in charge of the blockchain as a whole, it is always shared.
- It has not point of failure. Not missing pieces, no human or machine errors.
- It is completely transparent as the data is kept in a network, a public one.
- It cannot be corrupted without other members noticing it.
- It has no center; everything is the same in any point. Decentralized system.
- Every transaction or piece of data is carefully protected.
Not only for financial matters
Even though it is well known that the main use for Blockchain was for cryptocurrencies, which are the brand new digital currencies that are not physical or cash that are saved in sort of digital wallets.
However, it does not mean that it is the only area wherein the Blockchain platform is helpful and used. Blockchain is a tremendous tool to solve problems and optimize methods in many other sectors.
Moreover, Blockchain and digital marketing has a very close relationship. In Daniel Newman’s opinion to Forbes: marketing and advertising are some of the most promising areas wherein Blockchain has and will have an impact.
During the recent years, internet users began using Ad Blockers to avoid intrusive or not desired advertisement.
The use of this type of apps or extensions is one of the main troubles for enterprises; the purpose of digital marketing, based on Jacob McMillen post for Singlegrain is to: “connect a business or organization with its target audience via digital channels.”
However, the use of AdBlockers interrupts the connection among the brand and the potential customers, and constantly the use of a middleman such as Google and Facebook is required.
Here is when Blockchain comes into scene; it has several characteristics that intend to improve the impact of digital marketing in sales.
There are 5 main characteristic of the changes BlockChain will impact the way digital marketing works:
The use of an intermediary in digital marketing means businesses only get half the value of what they have paid, according to Michael Greene, a Forrester analyst.
In finances, taking out the middleman drops the use of banks, storing and transferring the money reliably; while in marketing, the main third-parties such as Google and Facebook, they work ensuring the reliability of every transaction, or ad campaigns.
Greene also said that Blockchain can do away with these intermediaries and help create better value for marketing campaigns. In the same way, he estimated that publishers removing middlemen could increase their CPM from $1 to $5.
Blockchain helps to communicate directly; it comes into this by proving that users are real, along with click-through data. It helps website owners and the ones interested in advertising without needing a mediator.
It can be all summed up in an important decrease in extra or unnecessary costs which leads to make wider the profit margin.
Trust in ads and customers
Trust is an important matter companies have to face every day, customers are skeptical about the information a brand supply; for example, about the quality of the product, the way it is created, conditions and many other factors.
The Renowned blogger and digital marketer Jitendra Vaswani says, “Blockchain’s public ledger allows transparency of every product at each stage of the supply chain. As a marketer, our job is to build trust with the product such that it sells. Blockchain places tremendous power in the hands of the customer – thereby improving their customer experience.”
On the other hand, trust is not only related with the perception customers have with the brand. In addition, it also works inside the enterprise; when a brand is investing in advertisement, they need to know how many clicks and view received come from real customers.
In the contribution Andrew Medal did for www.entrepreneur.com, it says that nearly 50 percent of all ad traffic is being generated by bots. Brands are paying huge amounts of money to reach potential customers. But this doesn't give them any guarantee that those ads will increase sales.
A study made by ANA (Association of National Advertisers) shows that bots costs companies $7.2 billion in 2016. However, it explains that Blockchain is capable of changing that.
Based on the fact that the chain is transparent and encrypted, companies will be able to easily determine if the people viewing their ads are members of their targeted audience—or not—saving millions in ad spent each year.
In Newman’s opinion, the ability of Blockchain of improving transparency of every product’s move through the supply chain puts tremendous power into the hands of the customer.
It means that customers are able to check the origin of a product—who has handled it—if it is legit or faux, whether they are purchasing from an online auction or a storefront, and many other characteristics.
“Companies can use blockchain to show consumers whom they are selling their data to. And, since this information cannot be changed or copied, companies that use this technology to store their data can rest assured that their information will not be tampered with”, said Andrew Medal in his article How Blockchain Is Creating a New Future for Digital Marketing.
Saying that the use of blockchain protects in the same way to the industry and customers, is acute; the transparency is needed and well appreciated in both cases.
Better selection of target audience
Before blockchain, the way marketers separate and delimitate their desired target market is based in different sources. In all of them, all the members of the group have at least one characteristic in common.
Age, sex, salary range, and brand of car they own, and/ or favorite restaurants to eat out, etcetera. However, with Blockchain can get the information straight from the customers, creating a customer profile.
Newman admits that the use of blockchain “allows marketer for an even greater ability to market to the customers’ needs—and spend advertising on only those customers who are most likely to buy your product.”
Blockchain is intending to change the way the user model works, and in the same time achieve a balance among the advertising and consumer identity.
In these days, brands earn money for each single view they receive from potential and current customers.
While experts such as Amanda Gutterman, CMO of ConsenSys argues that in a nearly future, the marketer could end up paying the user to consume their advertising material.
In a radio interview Gutterman had recently, she said that “when a brand approaches a user to subscribe to its weekly sales newsletter, the customer can respond with the price that they’ll have to pay her for that info.”
However, payments are not going to be big amounts of money. Reading an email can cost up to 0.003 cents, they are called micropayments.
In addition, they will probably be paid via cryptocurrencies, of course. It is an excellent way marketers could use to prove the value of the relationship with clients and their efforts to engage them.
How does it exactly work in digital marketing?
It blocks all the tags that can lead to track users and also incorporate a system that benefits web pages that are based on the visitor attention.
As there is a direct relationship between the user and the marketer, this last one may pay straightly to the user by using a cryptocurrency; each agency can choose which one will use.
There are two interesting points in this method: first, the interaction is real, it is almost impossible the implement of automatized bots; second, the navigation is entirely private, the user cannot be exposed.
Benefits of blockchain in digital marketing
- Blockchain will help to avoid the receivers to see repetition of information, through the prevention of duplication of information, everything must be original and innovative.
- Workers of the area such as: publishers, content writers, and graphic designers will receive compensation in balance with the interaction the audience has with their work.
Millennial generation which is the main target audience for almost every marketer asks for proofs of work for which blockchain creates transparency and trust.
- The audience should be rewarded as they provide confidential pieces of identity based on trust and interests.
Experts agree to the idea that Blockchain is the present and the future of many sectors.
Bitcoin and cryptocurrencies are gaining more ground each day. However, there are far from being the only strength of blockchain.
Digital marketing, advertising, e-commerce and several other areas are currently In an adaptation process because of blockchain. Nevertheless, the change is not going to be neither easy nor rapid.
Digital marketing is constantly changing and with the inclusion of blockchain systems will lead to better customer experiences, more trust among businesses and clients, transparency and responsibility from every involved part.
As the CEO and co-founder of global financial comparison site, finder.com said once: “Despite blockchain’s close association with Bitcoin, it’d be a mistake to let that overshadow its uses in the digital marketing industry”.
Marketers must have to keep the focus in the trends that are being developed, studying carefully the market leads to a better idea of where to put money, time and efforts.
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