Opinions expressed by Entrepreneur contributors are their own.
Blockchain and cryptocurrency have become buzzwords far beyond the worlds of digital marketing and technology. Experts predict The blockchain market will grow to nearly $40 million by 2025. But while crypto-related buzzwords have become impossible to avoid daily, not everyone is fully aware of what the shift toward blockchain technology will mean for brandsconsumers and digital marketers.
What is a blockchain, and how does it work?
Blockchains are electronic ledgers or databases. They are shared between different connections in computer networks and store information in a digital format. Blockchains differ from other databases because the technology at their core guarantees that records are kept secure.
Another difference between a blockchain and other databases is how the data is structured in the ledger. As the name suggests, blockchains group data together in blocks. Think of them as the individual rooms or compartments of a storage facility. Once one block reaches its capacity, it is closed and linked to the previous block.
This is how a chain of blocks is created. Any information added once a block is closed must be stored in a new block. Once that new block is complete, it is added to the existing chain, and so on. Besides creating a chain, blockchain storage also creates a chronological timeline of when data was added.
A few years ago, blockchains were far from being a household name. That changed with the advent of cryptocurrencies. Since the likes of Bitcoin have grown in popularity, so has the use of the blockchain as a ledger for transactions. One of the most significant differences from other databases is that blockchain-based data is held by all users collectively rather than in one centralized organization.
What does blockchain mean for marketing?
The financial industry was among the first to adopt and invest in blockchain development. As a result, that industry continues to hold on to most of the market.
Digital marketing as an industry is only starting to embrace the potential of this technology and create use cases. But while marketers may be behind their finance colleagues in adopting blockchain technology, marketing Certainly stands to gain from blockchain applications.
The technology continues to develop at this stage, and new use cases, including several for digital marketing, are being discovered almost daily. Undoubtedly, blockchain technology and web 3.0 applications will improve how digital marketers handle data.
Blockchain will allow digital marketers to:
- Increase transparency for advertisers and marketers
- Quantify the results of marketing campaigns
- Prevent fraud
Increased transparency for brands and consumers
Consumers have long demanded increased transparency from their favorite brands. At the same time, they have protested attempts at greenwashing and other tactics that may garner consumer favor.
Blockchain technology can end problems like greenwashing because the ledger documents the heritage of a particular product irrevocably. Consumers can check on far more detailed information on a given product than they currently can. Brands benefit from the ability to build increased consumer trust. For example, claims of organic or carbon-neutral products can quickly be confirmed through this technology.
Marketers looking to place advertisements also benefit. Increased transparency makes it easier for them to select the right advertiser for a brand because they can more quickly check audience claims.
Quantifying marketing campaign results
For years, marketers have been tracking keywords to evaluate the success of their campaigns. Despite monitoring options provided by search engine operators, it has not always been straightforward to quantify the results of a campaign.
For example, tracking organic search engine optimization results are tricky for marketers. Separating keyword results on different devices can be as challenging as distinguishing between local or national search engine rankings.
Equipped with the right tracking software, the blockchain could provide an answer to some of the guessing marketers still doing. The ledger could give actual numbers of each keyword’s performance and track it across a period. Data with this degree of accuracy is valuable for more than reports. It also forms the basis of genuinely data-driven campaigns.
Preventing data fraud
Blockchain technology will give consumers greater control over their data. Marketers must develop more secure ways of storing and accessing consumer data.
But blockchain fraud prevention goes further. Digital marketing currently suffers from illegitimate suppliers committing click fraud in pay-per-click (PPC) advertising campaigns, for example. Tracking clicks and providing end-to-end transparency can put an end to advertising fraud.
Fraud prevention benefits digital markets and clients. Marketers will find it easier to prove the validity of their results to clients. Clients benefit from being able to track each interaction and getting to know their actual customers better.
Digital marketing made better
Leading marketers have emphasized trackable, measurable results for years. Measuring and tracking campaign performance has been among the main reasons behind the growing popularity of digital marketing as a field.
Blockchain technology stands to take these advantages even further. Blockchain technology makes it impossible to alter campaign results by recording clicks and other interactions in a temper-evident ledger.
Not only will this development increase trust between marketers and their colleagues as well as agencies and brands. The move toward blockchain technology can trigger a new era for marketing. Results can no longer be doubted or attributed to the wrong activity. Marketers will find it far easier to demonstrate the value of entire campaigns and individual activities within those campaigns.
In short, blockchain technology has the potential to trigger a new era of digital marketing accountability.