Why Is Blockchain Technology Attractive for Marketing
Blockchain has spread to every industry possible. Today, small businesses and big corporations are getting ready for blockchain to take over the world.
The technology that gave us Bitcoin and other cryptocurrencies has a very bright future. According to Fortunly:
- corporations are expected to spend $20 billion a year on the implementation of blockchain technology by 2024
- 90% of U.S. and European banks have already started implementing blockchain since 2018
- financial institutions, in general, have already spent $552 million on blockchain-powered innovations
- 74% of executives see great potential in blockchain technology and expect its influence to continue growing
The biggest fields that are already benefiting from blockchain are, of course, banking and finance, and manufacturing. Recent reports also show that healthcare, government sector, and entertainment industry have also started to invest money into blockchain technology.
Among the reasons, why blockchain has drawn so much interest, company executives name:
- reducing friction and costs on payment transactions
- increased security since blockchain technology is hard to tamper with
- great opportunities for marketing and new approaches to customer acquisition and retention, customer relationship management, and revenue generation
OK, it’s clear where the first two reasons come from.
But how is blockchain technology can be attractive for marketing?
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The Current Impact of Blockchain on Marketing
Before we dive into the specifics, let’s take a look at the impact that blockchain technology already has on marketing.
Deloitte’s 2019 Global Blockchain Survey united hundreds of high-end executives to ask them about the impact of blockchain on the way that their companies operate.
One of the questions they had to answer was regarding the use of metrics, which they use to measure blockchain business case results. The answers were quite interesting:
Image credit: Deloitte
It appears that most of the blockchain applications are already related to marketing, specifically revenue generation, enabling new business models, and customer acquisition.
So, as you can see, there are some systematic problems in marketing that blockchain can potentially solve.
Now, let’s see why blockchain can be a potential solution to marketing challenges.
1. Increased Data Privacy
In marketing, the security of personal consumer data is the biggest concern. Thus, marketers are constantly looking for ways to anonymize this data to increase security.
Why blockchain can be a good solution to this problem?
Basically, blockchain cuts the middleman, providing companies with a direct connection to the customers. It stores the information in a decentralized way, thus, increasing its security.
Moreover, the very technology provides a more secure opportunity to store private data. It is very hard to tamper with the information inside a block without nodes noticing the changes.
Besides, any intervention into the information in the block will cause the hash to change. Consequently, every following block that already contains the hash of the previous one, will notice the change and report it to the nodes.
Such an application of blockchain is already justified today. Brands are looking for more ways to bring themselves closer to the customer. In this case, blockchain can largely contribute to helping companies build a trustworthy relationship with their customers by offering them complete security.
2. More Secure Payments
Today, customers expect companies to not just offer secure payments but also to provide a variety of payment options.
We can already see the rise of mobile wallets like Apple Pay and Google Pay. But although these mobile wallets have extra layers of security and are safer to use than physical credit cards, they won’t protect you from credit card fraud. Besides, Apple Pay and Google Pay are both middlemen in the payment process, which always adds an extra reason to worry.
What’s blockchain’s role in this?
We already mentioned that blockchain technology doesn’t involve any middlemen to complete payments. And, the payment process doesn’t differ very much from the one that we’re used to.
For instance, TenX, a cryptocurrency platform makes it possible for the users to buy cryptocurrency (Bitcoin, Ethereum, and Litecoin), and pay with it through a mobile app. There are no limitations in terms of location, so TenX users can shop from anywhere in the world.
Companies can also largely benefit from cryptocurrency platforms like TenX and purchase ads through a transparent system.
You may ask, if anyone can become a node, how can blockchain be entirely safe from the nodes who are operated by criminals?
Fair question. And many cryptocurrency platforms have already answered it.
TenX, for instance, is using the adChain Registry system that eliminates bots and untrustworthy nodes. This system uses a Cost-Per-Mille key that recognizes accredited bot-free domains and entrees and eliminates untrustworthy ones.
Thus, any purchase of a digital ad that you buy through a blockchain-operated cryptocurrency platform will be transparent and secure.
There are plenty of other applications of blockchain that marketing can benefit from. Let’s take a look.
- Smart contracts
Smart contracts are programs created to execute the purchase agreement between the sides of the sales. They are smart because they are self-executing. A smart contract will not be fulfilled if some of the stipulations are not carried out.
You can already see the benefits of a smart contract for marketing.
In a B2B environment, where, for instance, a company has an agreement with an influencer to launch a joint marketing campaign, a smart contract will be the tool that will guarantee that all contract clauses are observed and executed equally by the parties.
- Blockchain and ERP automation
While growth is definitely a success for a company, with it, many businesses start facing asset management problems. Such assets can be marketing materials, collected over time after launching multiple marketing campaigns. This calls for a need in enterprise resource planning (ERP) automation, and blockchain can help.
Blockchain can solve several problems with regard to ERP automation:
– It can tackle a visibility problem in asset management as each participant can equally trace the assets.
– The actions of all nodes who have access to asset management will be traceable making asset management more secure.
– Blockchain technology is a lot cheaper than other solutions, when it comes to asset tracking, as the manufacturer, the distributor, and the retailer will all use the same asset management system.
Ultimately, enterprise resource planning can also employ smart contracts to ensure that the obligations among the distributor, the manufacturer, and the retailer are fulfilled.
- Blockchain CRM
Blockchain technology can also have a significant impact on customer relations management. Besides enhanced security, it can:
– improve transparency to ensure more trust between a company and a customer, thus, contributing to customer retention
– enhance the quality of loyalty programs by giving the consumers decentralized access to a loyalty program, where they can safely trace their activity, switch customer loyalty plans, etc.
As a result, blockchain can help companies become closer to their customers and encourage the customer to trust the brands that provide them with such security.
The application of blockchain in marketing isn’t just a theory anymore. Companies benefit from blockchain to increase ROI, tackle customer relationship management, generate revenue, and acquire and retain customers.
Apart from that, blockchain provides great security solutions for companies. The technology behind blockchain allows the companies to safely purchase ads, and for their customers to safely buy the products that they enjoy.
It’s only a matter of time before using blockchain in marketing becomes mainstream. This technology disrupted so many industries so quickly that, before you know it, it will become one of the top solutions in marketing.
So, don’t waste time and pay attention. Otherwise, you risk lagging behind your competitors.