Blockchain is a form of disruptive technology that didn’t come to market quietly: it opened doors and made its presence felt. But while blockchain has been busy shaking up the financial sector with cryptocurrencies, that’s not all this new kid on the block is up to.
Blockchain ledger technology has proven incredibly valuable to many industries aside from its more well-known use in cryptocurrencies. From asset management and tracking to regulatory compliance, blockchain technology is bringing new efficiencies and opportunities to businesses through its use.
While many of these blockchain services are still in their early stages, implementing this disruptive technology into your marketing package can provide the following value to your business and customers, including increased transparency and trust; reducing advertising fraud; and increased security and privacy.
With many people still viewing blockchain as a distant and esoteric technology, it is becoming increasingly clear that Web 3.0 will revolutionize the world and our industry. For this reason, I would like to discuss three main areas where blockchain will revolutionize your digital agency and bring immense value to our businesses.
Related: Web 3.0 is here and it really means it for you
Blockchain increases transparency and trust
Blockchain is a decentralized technology that does not depend on a central control body. Instead, its functionality relies on the consensus of a vast network of nodes to confirm and approve every transaction in its chain.
In conventional computer systems, data is typically stored in a client-server network and is based on a central database. All calculations and actions performed are fed into one place, and all action items are kept in one central location. Unfortunately, this model puts a lot of control in the hands of the ISPs as “trusted third parties”.
Blockchain turns this model on its head by hosting and decentralizing blocks of transactions on hundreds, if not thousands, of computers around the world. Most importantly, this data is fully available for anyone to find and verify on a public ledger. With blockchain, every change on the chain is immutable: stamped, confirmed, unchanged, and visible to anyone in the future. This technology is very similar to how peer-to-peer networks work.
This puts transactions back in the hands of people and restores trust to data, giving your audience more control over their data.
How does this principle of transparency and trust apply to marketing?
In short, using blockchain for marketing creates trust and increases transparency with our customers. For example, blockchain can show customers how their data is being used by advertising efforts by large companies. Unfortunately, with a centralized, customer-managed database, it’s almost impossible to know what a company is doing with their data, how, and with whom it’s being shared.
See Also: Blockchain is Everywhere: Here’s How to Understand It
Blockchain reduces ad fraud
A Forrester study found that 69% of brands spending more than $1 million per month on ads said at least 20% of their budget was lost to digital ad fraud. These fraud schemes have prompted many companies to look for ways to prevent digital fraud and strengthen security measures.
To mitigate losses from advertising fraud, companies have had to significantly reduce advertising budget spending. One such company was Uber, which cut its ad spend by $100 million to save money. However, after the outage, Uber saw no change in the number of conversions or activity on its data page. Upon further investigation, they discovered that their advertising budget was still being consumed by fake apps, bots, and phantom clicks.
So how can we avoid the same mistakes Uber made and protect our ad spend from fraud? This is where the blockchain comes into play again.
One particularly useful use of blockchain is for user verification. Blockchain can be used by ad networks to cut out the middleman and track who clicks and interacts with your ad to combat fraud.
Using the open ledger, blockchain allows advertisers to identify the source of fraudulent or wasteful clicks and blacklisted scammers. While latency issues and large-scale adoption pose obstacles, the blockchain could theoretically be scaled to combat fraud issues in ad networks. For example, Toyota had early success using blockchain to identify fraudulent clicks/traffic and reduce waste.
The combination of transparency and accountability of blockchains can reduce ad fraud and help companies take more responsibility for their businesses’ digital spend.
Blockchain provides security and protects privacy
Protecting data from theft and corruption is a priority that many small and large businesses have had to focus on. In 2021 alone, data breach costs increased from $3.86 million to $4.24 million, the highest margin of lost funds in just 20 years. With so much of our day-to-day business operations moving to the cloud or connected devices, that number is likely to continue to rise.
Enter blockchain for cyber security. Security is an integral part of the blockchain ledger as each time a new chain is created it is encrypted and then linked to the previous transaction. Once these strings are made, they cannot be altered or chopped.
On the marketing side, using blockchain to create smart contracts is a way for companies to offer customers additional security measures and guarantees. Smart contracts provide increased security by verifying, recording, and encrypting all blockchain transactions. These contracts can also automatically create backups and duplicates, providing additional security, trust, transparency and security.
With the help of smart contracts, digital agencies can build more trust with customers and protect their data and privacy.
See also: 5 Ways Hybrid Smart Contracts Are Transforming the Blockchain Industry
Blockchain is the future
While blockchain still feels like a futuristic technology we read about in magazines, big companies like Microsoft and Amazon have already switched to blockchain to improve everyday processes and online security.
It seems like every day we read about new cybersecurity leaks and attacks from malicious actors. However, there seems to be very little that can be done to stop someone from stealing our financial and personal information. Unfortunately, the marketing industry can relate to this as it has long suffered from ad fraud and digital theft.
Because of this, blockchain is a great investment not only for building trust with our customers, but also for protecting our collective privacy online and reducing fraud and theft. Philosophically and pragmatically, blockchain presents the vision of a safer and more reliable digital experience.
It is clear that blockchain and cryptocurrencies will have a significant impact on Silicon Valley over the next decade and as the next layer of the internet is being built. The question is, how will we influence the direction of the coming Web 3.0 tsunami to provide greater value to our customers, or will we lose out to early adopters?
See also: How blockchain and cryptocurrency can revolutionize businesses