3P Disruption of Digital Marketing by Blockchain: Power, Privacy and Promotion
With technology disrupting the traditional business set-up, Block-Chain, is well-positioned to disrupt even the Digital Landscape. In this article, I have discussed some of the important aspects on how Block-Chain is disrupting Digital Marketing.
Blockchain may be a relatively new technology, but it’s already changing the world around us. The Block-Chain technology market size is expected to grow at a CAGR of 65% to ~40 Billions USD in 2025 (Statista, 2019).
Block-Chain and Marketing: Block-Chain has found its application vastly in finance, and its decentralised system is attracting many organisations to reduce the middlemen, and eventually minimise costs. Artificial intelligence and Analytics has provided significant insights to the businesses at the expense of consumer privacy, with the arrival of blockchain technology the power will inherently be transferred to the consumers because they can choose whether to share their data with the businesses or not. Like every other functional division it will have an impact on Marketing by disrupting the digital marketing ecosystem. A survey among Belgian Companies revealed the following results.
Source: Statista, 2019
The transition from Traditional Digital Marketing to Advanced Digital Marketing: Marketers have moved from a traditional space to a digital space because the digital presence of the customers has increased considerably. However, the intensity of digital marketing varies from sector to sector and organisation to organisation. The digital marketing ecosystem has come to a place where we can bifurcate between “Traditional Digital Marketing” and “Advanced Digital Marketing”. While traditional digital marketing is about using digital technologies such as email, online advertising, retargeting etc… Advanced Digital Marketing is about the use of advanced technologies like Artificial Intelligence, Big Data Analytics, Blockchain etc.. in the digital marketing campaigns. Our focus is on how Block-Chain is influencing digital marketing and how marketers or consumers are being affected.
Block-Chain: A blockchain is simply a database, but with advanced features such as “No central authority”, “Encrypted communication”, “Time-Stamp”, “Linkage to another block via. Unique identifier called Hash”. The features help keep the data within the blockchain secure.
In the above figure the box-shaped entities contain the data, the unique identifier (hash of the box) and the identifier to their previous block. Any changes in data within a block change the unique identifier which brings about inconsistencies in the subsequent block. Thus, minimising data tampering.
Instance of a block in a Block-Chain, it consists of the data, the identifier of the previous block
and the identifier of itself.
3P Disruption
Power to the consumers: Gathering data about the consumers has been one of the active initiatives of businesses to market their products to the perceived target audience. The selective targeting improves their odds of success. But, in doing so, the consumers have to go through a painful experience of receiving unsolicited information in the form of emails or calls, which in a way creates a negative perception of the products (and consequently the organisation) being marketed.
Block-Chain is a sanity check for the digital marketing campaigns, which sometimes misses the fine line between personalisation and breach of privacy. Also, as mentioned above, it reduces the involvement of intermediaries, thus lowering costs. Block-Chain technology also enables the organisation to compensate the consumers who chose their data, unlike traditional digital marketing, where the marketers believed that they are entitled to customer data because of their ability to extract information.
With digital marketing facilitated by Block-Chain, the customers can opt-in for ads and in return are rewarded with Basic Attention Tokens (BAT). The BATs are valuated on the basis of users attention. These tokens track the user attentions using incremental duration and pixels in view for any relevant content. The BATs may be monetised in the future subject to regulations, which will enable digital transactions.
The BAT structure involves the advertiser, the publisher and the user, with an anonymity shield. (basicattentiontoken.org).
Privacy: Block-Stack, a Block-Chain derivative, protects the digital rights of the customers. Block-Stack decentralises the applications such that the data which were previously stored at a central database of the applications are now stored within the user’s jurisdiction. This disables the application’s capability to sell the user data, and thus privacy breach is reduced.
Promotion: Businesses tend to spend a large chunk on digital marketing campaigns; however, there is no transparency as to how much each dollar of ‘digital marketing spends’ is contributing to its topline. With Block-Chain, one can track each dollar spend and link it to the customer making the purchase. By foregoing the middlemen, the businesses save a considerable amount of commissions.
Block-Chain is democratising the Digital Marketing ecosystem, with transferring the power back to the customers and lowering the cost of implementation of the campaign. This comes as a boon for small players with a limited budget as they will have a common playing field to compete with big players.
But, every bush of roses has some thorns attached, with Block-Chain adaptation in digital marketing, the marketing industry will have to build consensus on metric standards, as well as the most suitable processes for authenticating digital identities, properties and impressions.
Block-Chain has a foothold in various digital marketing avenues, a suggestive reading: Martech Advisor.
Source: Martech Advisor, 2019
References
Daniel Newman, 2019, How Blockchain Is Changing Digital Marketing
(https://www.forbes.com/sites/danielnewman/2019/09/18/how-blockchain-is-changing-digitalmarketing/?sh=2d00e84e16eb).
Indrajeet Deshpande, 2019, What Is Blockchain in Marketing? Strategies, Best Practices, Benefits
and Examples (https://www.martechadvisor.com/articles/blockchain/what-is-blockchain-how-touse-it-in-marketing/)