What is Blockchain?
Blockchain represents a giant leap forward in database technology, and is a distributed ledger that can store any kind of data, while recording and time-stamping any transactions or interactions between users and businesses.
Its name gives a clue to its defining feature - decentralization. For, instead of being located in one place, it is spread across hundreds - if not thousands - of individual blocks.
These blocks are the computers that belong to the internet users that are part of the network.
As such, a blockchain is basically an advanced peer-to-peer network, or a connected series of digital records.
Crucially, it is also a public ledger, meaning that any data stored on the blockchain can be accessed by anyone, and any changes made to the chain are recorded, and unchangeable.
And by removing the need for third-party intermediaries like company websites and social media platforms, its advocates see it as a way to wrestle back control over the internet from Silicon Valley’s big tech companies.
This ultimately empowers internet users, which explains its central guiding principles - transparency, security and accessibility.
Blockchain was invented by the elusive Satoshi Nakamoto back in 2008 and has evolved considerably since the introduction of the Ethereum blockchain in 2015.
Today, the industry is worth an estimated $7.2 billion (Fortune Business Insights), and is expected to nearly double in size by 2028 (Research and Markets).
Blockchain is most well known as the technology that underpins bitcoin and other cryptocurrencies.
It is also commonly associated with Non-Fungible Tokens (NFTs). These digital versions of real world objects like art and music can be encoded with customer insights and spending habits, and can be further personalized with other content, or tied into promotions.
But, by decentralizing data storage and thus removing the risk of a mass data breach, its potential uses stretch far beyond digital currencies and finance, with seismic implications for nearly every industry.
How Blockchain is Impacting Digital Marketing
Make no mistake, this technology is fundamentally transforming marketing as we know it.
This is because it removes the ability of companies to collect data from customers without reimbursing them in some way.
And, while only 8% of companies believe that blockchain is useful for marketing (CMO Survey), that will undoubtedly change because of the wide range of benefits it can bring.
Some of these are listed below:
Enhanced Security and Privacy
Today, data is seen as the world’s most valuable resource and it is stored en masse by companies - making their databases a tempting target for hackers.
The number of data breaches is increasing every day; not only does this put internet users in danger, but it makes companies liable to modern data privacy laws, opening them up to huge fines and reputational damage.
By contrast, the decentralization of blockchain technology increases the security of personal data. And while it is not completely hack-proof (nothing is after all), it is much, much harder to break into than a centralized network.
This means that marketers can be assured that data is as safe as it could possibly be, and companies and their customers are much less concerned about the security of personal data, or the potential for spam and fraud.
The defining characteristics of blockchain technology mean companies that adopt it increase the transparency of their marketing.
For, one of the biggest issues that people have with the internet at the moment is that they don’t know what happens to their personal data online - what information is collected, who has access to it, and who it is shared with.
This state of affairs means that many people are wary of handing any personal data over to companies, and this is a real restriction on the effectiveness of marketing campaigns.
By contrast, all data on a blockchain is decentralized, recorded and immutable. Blockchain users have complete control over what happens to their information, and this is great for business online.
Personal data cannot be manipulated without the user knowing about it, and companies cannot pass this information on to anyone without their express permission.
Increased Trust and Credibility
By safeguarding consumer privacy, reducing fraud and increasing transparency, blockchain technology increases the trust between companies and customers.
Internet users know exactly what will happen to their personal data, and can be rightfully reassured that it is safer than when stored differently.
It’s no surprise therefore that the financial industry was such an early adopter of this technology, and why these companies still make up the majority of its business.
For marketers, this uplift in trust has obvious implications - increasing the effectiveness of campaigns and driving sales.
But it goes further than that.
Blockchain enables users to upload all their personal information to one place, and this includes everything from their individual profile to consent preferences.
This means that marketers have access to more consumer data - and more accurate data at that - than ever before.
The technology also helps marketers to find accurate leads, while reducing the number of fake accounts and bots that find their way onto their databases.
What’s more, blockchain also enables marketers to track the online behavior of individual customers, and adjust their outreach accordingly.
It also enables marketers to present each individual customer with the content that is most relevant to them, increasing the personalization and targeting of their campaigns, and providing customers with the “wow” factor.
Taken together, blockchain technology brings the ultimate goal for marketers into sight - optimized marketing campaigns with real one-to-one interaction.
Blockchain Uses in Marketing
With all these benefits it is no wonder that blockchain is playing an ever-increasing role in marketing.
The most obvious example of this is through the use of “crypto” as the currency for online sales, which is growing in popularity - particularly among millennials.
NFTs are also becoming an increasingly common part of a marketer’s toolkit, with more and more people happy to buy digital collectables instead of something that drops through their letterbox.
Smart contracts are another useful avenue. These electronic agreements are built on blockchain technology, with coding that keeps track of contractual terms, and which automate the steps towards each term’s fulfillment - with obvious benefits for credibility and consumer trust.
However, blockchain uses in marketing are broad and varied - from fraud-proofing event ticketing and gaming to managing relationships on social media and filtering out unwanted ads.
The Bottom Line, Beyond your Bottom Line
Technological development has long dictated what marketers can and can’t do.
Blockchain is no different, since it brings with it the potential to change how consumers interact online, and make buying decisions.
Marketers should take note because consumers certainly do - the number of blockchain users increased from 8 million in 2016 to 68 million in 2021 (Finances Online).
As such, it is only a matter of time before blockchain becomes an essential part of marketing operations - cutting out middle men, saving time, increasing their ROI, and enhancing their brand’s reputation.
Ultimately, blockchain technology is something that could well make a marketer’s job easier; given how much more complicated this profession has become in recent years, this is welcome news indeed and something well worth pursuing.