How could blockchain influence digital marketing?
Blockchain could impact many aspects of communication and business, although most of the attention has been on its effects on financial transactions and banking. These two areas are important, but blockchain’s impact on currency and finance could also affect marketers of all services and products.
1. Changing Data Collection
Accessing the internet is possible for anyone, but you must go through ISPs or web browsers. These companies have access to almost all information we use online, including the items we purchase and the articles we read. They can also learn about the people we speak to.
Although it’s wonderful to believe that these gatekeepers will always allow fair access to the internet and protect consumers, has anyone read the headlines lately? Mark Zuckerberg is now the victim of a problem that goes beyond Facebook. Personal data can be easily bought and sold to advertisers.
This could be solved by blockchain. Blockstack is a good example of the data privacy problem. This network, which is built on Blockchain, claims to be “a new internet that decentralizes apps.” Your personal data is kept with you, and not on servers controlled by your app. When you visit a website or use an app, it’s like putting a key in a lock. Once you have put it in, you can take it out whenever you are done. It is not possible to keep track of who has used the lock and when.
Blockstack is only one example of many projects in crypto that aim to achieve similar goals. Skycoin is a cryptocurrency project that was created by the creators to be the fuel for, a new decentralized Internet. Skywire, the P2P network Skycoin miners have power to, will serve as the foundation for messaging protocols, apps, and other common functions on the internet. However, there is one major exception: All user data will remain encrypted and protected.
Imagine how marketing could change if marketers had access to all of the user data they have. It might happen sooner than you realize. You would need to collect data from customers and prospects to fill in the gaps if you don’t have a lot of information about every person who visits your websites or those of your clients.
Your user experience would also have to be tailored to the needs of your audience. However, the best marketers already do this. Blockchain could allow users to voluntarily choose the type of ads and content they want.
2. Fixing Digital Display Advertising
Online display ads are not perfect, but they are proving to be a great way for marketers to get results. They can be costly and difficult to manage from the advertisers’ perspective. Two for-profit companies, Facebook and Google, almost control the inventory.
Digital advertising is not good for the user. Display ads can be annoying and draining on your device.
Brave, the Brave blockchain browser and its Basic Attention Token (BAT), are trying to address all these problems by changing how users interact with ads. Brendan Eich, Brave founder, has a long history in tech. He created JavaScript during his time at Netscape in the ’90s and is also the co-founder of Mozilla.
Brave and BAT are powered by blockchain technology and aim to end the current monopoly in digital ads. They allow users, publishers, and advertisers to trade online attention for their value.
It works this way:
- Advertisers can buy ads using BAT. They are typically private tabs within Brave, but they also have push notifications and landing pages. Brave’s development team aims to have fewer ads, but better quality ads within the ecosystem.
- BAT is paid to users who choose to view ads. You can choose which ads you see. This allows advertisers to get more precise consumer information (anonymously), and it also helps users learn about brands and products they are interested in hearing from. Advertisers who volunteer to receive ads are paid a portion of their BAT spend for their attention.
- Both advertisers and consumers pay publishers. Publishers can charge BAT for subscriptions and premium content.
It’s a win-win situation for everyone: Marketers can get better data and targeting and publishers can have more revenue and control over the ads they show, while users can see fewer ads that are relevant to their interests without having to compromise their personal data thanks to blockchain encryption.
Most importantly, its owner gets the value of their attention. You can buy a subscription to Harvard Business Review, The New Yorker by opting in for ads that relate to your interests.
Although it’s not yet a common reality, this digital advertising utopia may encourage marketers to think more deeply about the target audience they are targeting when creating ads. Prospects will expect companies to offer a useful, entertaining, or even educational ad experience in order to get their attention.
3. Ownership and Security of Digital Assets
We all know the story: Piracy was rampant in the late 1990s, early 2000s due to the rise of digital music and MP3. Both sides resisted, and for a time they were at odds.
Streaming services such as Spotify, Tidal, and Apple Music are the modern solution. It’s a flawed model. Artists get compensated only a fraction of a penny for each stream. The complexity of the licensing process in the music industry means that streaming services payouts don’t always go to the right party.
The next step in the evolution and growth of the creative digital economy could be blockchain. This is why Po.et and Tao were created. Imagine musicians, filmmakers, and photographers being able to offer their work to a large audience without the need for an intermediary such as YouTube, Bandcamp, or iTunes.
Tao envisions a world in which artists can create their own communities using what they call an Initial Artistic Offering. Your band would sell a set amount of crypto tokens, such as the digital version of a vinyl LP or baseball card. After you have sold a certain amount of tokens to fans, you will be able to offer live experiences, special releases, and even memorabilia in return for your token. Your token’s value will increase the more you are popular with your music. Blockchain also tracks transaction dates so it is possible to offer content and access. Your annoying friend who boasts about liking a group’s members before they became famous can be rewarded!
Young Dirty (Baron James), the son and rapper of Wu-Tang Ol’ Dirty Bastard became the first artist to create such a community. His Dirty Coin will be used to purchase both his music as well as content that his father owns.
Blockchain-based entertainment economies could enable artists to market themselves directly without having to cede control over their work or share of their revenues to platforms like SoundCloud or Facebook. This would allow artists and groups not to be paid more to have their songs featured first on a music site, but based on their value. The model would encourage entertainment marketing to shift even further towards P2P communities, as fans could conduct transactions and receive special privileges by being holders of tokens.
Possibility vs. Reality
These scenarios are hypothetical and rely on technologies and projects that are still in development. It is impossible to predict whether the blockchain-based world of the future will be realized, as cryptocurrency is still very much in its infancy.
If even one or two of these commercial uses for blockchain come to fruition it could drastically change the way marketers approach attracting buyers’ attention. One thing is certain: There will be a lot of activity in this space over the next months and years, thanks to the tireless efforts of some of the most brilliant minds at the largest companies.