5 Benefits of Using Blockchain in Marketing
The blockchain technology became a basis for many cryptocurrencies. However, it can also be used in many other areas where people are looking for security and reliability. The blockchain market is expected to reach $20 billion in the next four years. Experts from different industries, including digital marketing and advertising, get excited about the opportunities this technology offers. But before we focus on the benefits of using blockchain for marketing, let’s figure out what it is.
What You Should Know About Blockchain
Blockchain is a technology that enables two parties to make secure transactions. This approach is completely different from all the other existing solutions because a blockchain doesn’t store data on a central server. Instead, it distributes data among peers. There is a decentralized encryption system that helps verify and validate each piece of data at every point of the network. Blockchain transactions are completely transparent because any user can see them. However, nobody can change or rewrite the data in a blockchain because this task would mean rewriting each encrypted piece of data at every point of the decentralized network.
The main advantage of this technology is effective data protection, which turns out to be a very important issue in the world of marketing. For example, the data scandal involving Cambridge Analytica and Facebook has demonstrated that internet users cannot control their personal information, and popular advertisers are not trustworthy. Blockchain can be used to create a completely transparent marketing service where users can choose what information they are willing to share with marketers. This would establish trustful relationships between the users and advertising services, while also increasing the efficiency of the entire system, thus saving costs.
Blockchain is also beneficial for marketing because it can help brands increase their audience. Brands need to collect a lot of information about their customers but they cannot find all the necessary information in one place. Some sources provide marketers with the data on customers’ preferences or location, while others provide such information as their age and sex. Blockchain enables people to choose the data that they would like to share to get personalized ads. This way, brands can invest in the audience of people who are interested in a particular type of product or service.
Benefits of Using Blockchain in Marketing
- Decentralization
This is probably the main advantage of blockchain. In the traditional client-server model, one server hosts all the data, and a client needs to communicate with the server to access it. The centralized model involves many risks associated with data leaks and other security threats.
A blockchain network is decentralized, and there is no single host of the data. Pieces of data are stored locally on many nodes, while encryption prevents potential hackers from accessing the data. Once recorded in a blockchain, the data remains permanent and constant. - Direct transactions
Decentralized advertising systems could also change the relationships between buyers and sellers because they could make direct transactions, with no middlemen involved. Smart contracts are blockchain-based technology. These contracts are executed automatically. Besides, they are verified and encrypted by each node of the network.
These self-executing contracts allow for direct communication between website owners and marketers. They are completely safe and there is no third party, which means no additional transaction fees. - Accurate consumer profiles
Blockchain allows marketers to create consumer profiles easier than ever because they can get all the necessary data in the same network. Although some people think that blockchain will introduce challenges for digital marketing, replacing the traditional methods, the truth is that blockchain is simply more effective.
Today, marketers need to buy data from third parties. Blockchain enables them to buy data directly from their consumers. As a result, marketers can get the most accurate data possible, while consumers are motivated to share it. - Tracking
Blockchain can help you make sure that only the right audience sees your ads. There are many fraudulent schemes aimed to manipulate ads. There are fake products, fake statistics, and fake clicks, which makes it difficult for marketers to properly evaluate the effectiveness of their efforts. One of the main functions of a blockchain is to make sure that all the data is properly distributed. It can help consumers track their products from the moment they were manufactured, while also enabling marketers to track all the emails and messages. - Trusted ad buys
It’s hard for marketers to determine whether their data is 100% accurate or not. For instance, they should always keep in mind fake clicks. Various bots can increase click rates many times, changing statistics. Such problems make marketers lose more than $7 billion every year.
Blockchain protects marketers from such frauds because blockchain itself is a system of data protection. When a block of information is created, it is already encrypted, while the whole system remains transparent so that marketers can monitor their views. Although decentralized marketing platforms are still far from becoming mainstream, they already exist, and marketers can get complete control over the first-party data.
Final Thoughts
Although blockchain is still a new technology and many people don’t know exactly what it is, its popularity grows every day. Blockchain is already used in different industries, and people find new possible applications for this technology all the time. Simply put, if your industry involves massive amounts of data and numerous transactions, blockchain can be used there.
In this article, we explained what blockchain is and what makes it so popular. As you can see, this technology can help marketers address many common challenges, while also providing some unique benefits. It can increase the effectiveness of your marketing efforts and protect important information so that all the parties can feel safe. Blockchain is evolving at a very rapid pace so you can expect it to change marketing forever in the nearest future.
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Autor: Dominic Beaulieu is a gaming enthusiast turned tech writer who covers variety of topics like design, development, etc. He uses his experience in translation at TheWordPoint translation service as a localization specialist and counselor.