At this point, it is almost impossible for you to have not heard about how Bitcoin, and the blockchain technology that underlies it, are changing the world. There are lots of Bitcoin investors and companies based on blockchain, and the trend is still growing rapidly. Just as it has the potential to transform the finance, ecommerce, and many other industries, blockchain is also predicted to change many basic tenets of the marketing business.
Before we get into the marketing industry, it is important to understand what exactly blockchain does. In short, it is an incorruptible digital ledger that keeps track of economic transactions. Not only does it manage financial transactions, but transactions of any kind that carry value. In the marketing industry, value not only comes from money, but the products exchanged, opinions given, and attention paid by customers. Blockchain is going to change all this through decentralization. At the same time, Bitcoins have already become a trend, with people mining coins and keeping track of how much 1 BTC costs in USD.
How Blockchain Will Change Advertising
One of the key advertising concepts, in general, is the idea that your ad or message reaches a consumer. Everything else is secondary to reaching the consumer. After that happens, hopefully, the message is good enough to draw that consumer into your cause and perform some call-to-action, be it visiting your website or buying your product. Two of the biggest companies in the world, Facebook and Google, base their entire revenue stream around getting ads in front of people’s eyeballs.
So if the industry could find a better way to verify this system, it would bring a lot of value to the network. Before I go any further, I want to remind you that the whole value proposition of blockchain is its ability to decentralize networks, so there is no single failure point. It means that you are dealing with just the facts and there is no manipulation of the records on either party’s end. Knowing this, blockchain could be used to ameliorate the trust in the advertising problem.
If advertisers used blockchain to monitor whether ads are being delivered and to specified users, two problems would be solved. First, money would be saved from spending it on expensive consultants who come up with delivery verification solutions, and second, trust in the system would increase greatly, now that it is nearly impossible to rip the system off.
Adding Value To Products
The ability to identify and differentiate every product means you can start to add value in a scalable manner Things start to get more interesting when you consider the other effect of blockchain: it makes nearly everything unique. Because it has verifiable proof of the identity of each transaction, that transaction can actually be a product. The ability to identify and differentiate every product means you can start to add value in a scalable manner.
As described here, fashion label Babyghost made it possible for customers to use unique identifiers for their handbag that provided them with all this extra information on it. Sales are telling a story to your customer, and these blockchain identifiers can do exactly that. They tell a story about where the item came from, how it was made and what it’s made of, and the story appeals to customers on an emotional level.
Making Things A Little More Private
Privacy is quickly becoming one of the biggest concerns of our time. Everyone everywhere is freaking out about the CIA reading their emails or their internet service provider selling their information. What blockchain could serve to do in these situations is add a layer of privacy by anonymizing large groups of data. This would essentially turn all brand data into something more like a census, you can see detailed information about the network as a whole, but you don’t know which people are in love with which brand. Building this layer of trust would do a lot to allay customers’ fears of being taken advantage of or manipulated, but not affect the growth of a brand and their data.
As a side note that is more finance related, e-commerce will become much more trustworthy as well. Middlemen will eventually be cut out as it becomes simpler to engineer fraud-free connections with customers. This will help to create a more direct connection with customers that can be nurtured into a long-term relationship.
Bringing Simplicity To The Complex
One final way that blockchain is going to change the marketing industry is by bringing simple solutions in where expensive ones existed before. Blockchain was invented by an engineer and possesses an engineer’s taste for elegant solutions. Every time you read about blockchain you hear about another use that would never have popped into your mind. One such idea is talked about in a story, where a company has figured how how to decentralize loyalty points.
What they’ve done is realize that a big problem exists when you earn loyalty points with a particular brand: your switching costs go up. It becomes increasingly harder to switch brands, because you have this feeling like you are losing or paying money to switch. Once this happens, you require a larger and larger incentive to move brands, and often end up not doing it at all. ShapeShift solves this by making loyalty points and coupons freely tradeable, eliminating any lasting ties to companies. Much like how Goodwill takes clothes that are worthless to one person and sells them to another, this is an example of where value has been created from nothing. Those loyalty points and coupons probably would have sat there forever unused, but because of the market that has been built, value is created for both the buyer and seller.
It is not a new claim to say that blockchain is going to change almost every industry, but what is new is the way it will affect sales as well. These changes aren’t expected for about five years, but when they do come, we will see a disruption within the marketing industry at large that will create opportunities everywhere.