We receive various types of information from every possible side. Among the buzz there are advertisements, announcements and spots – all being part of extensive marketing activities. Worldwide, digital advertising spending (including messages sent via computers or via stationary/mobile devices) by 2020 will amount to 335 billion dollars. These expenses are closely related to the desire to arouse interest among customers and obtain data about them. However, the consumers are becoming more and more demanding – in terms of security, convenience, as well as the efficiency of available solutions, so they are reluctant to share information about themselves. It lies with the service/product providers to offer modern and innovative solutions to their users, along with the development of digitization.
From the article you will learn:
- if there is freedom on the Internet;
- what did the marketing look like before the Blockchain technology appeared;
- what is the Blockchain technology;
- which technologies is Blockchain built from;
- how can you use the Blockchain technology in marketing.
Freedom on the Internet – truth or myth?
When you are online, everything you do is being closely watched. You can't do anything about it; companies and organisations want to know their users, and the only chance of getting to know their needs is by tracking them in the digital space. People think that using the Internet is completely free. However, we really "pay" for using it and for individual services with our personal data. Thanks to shared data (and consent to its processing), marketers are able to profile their clients and then send them personalised messages via available channels. Some of the consumers perceive this as an aggressive behaviour and get indignant at the thought that an organisation knows so much about them. Nevertheless, most of them don't think about it that much, looking only at the potential benefits.
Users value speed and flexibility of the Internet. Because of this, they are more and more willing to search and share information or make various transactions that require special attention in the physical world and take more time. Giving away the privacy for convenience becomes widespread and (unreflectively) accepted.
The appearance of marketing before the Blockchain technology
Marketing representatives are constantly looking for data about their current or potential customers. Information such as gender, age, place of residence, income or education can be obtained when they are shopping in an e-commerce store, setting up a loyalty card or logging into an e-learning platform. In addition, a very important information for marketers is how users behave in the space created by the brand and what elements they pay attention to (e.g. in online stores, on online platforms, on social media profiles). By monitoring traffic, they can improve the functioning of their channels, match them with expectations. After analysing and drawing conclusions from thermal maps, you can place banners and advertising information in attractive places. However, the perceived interest in specific fields on the website does not always come from real users. Almost 60% of online traffic comes from bots that artificially "improve" statistics. There are reports that indicate the damage caused by bots amounting to 7 billion dollars a year by, among other things:
- visiting the website by clicking on paid ads in the search engines (they generate traffic that does not translate into profits and causes payments for each entry);
- creating the user accounts whose operation and management lies with the organisation;
- infecting computer networks with malware and taking control over them. When too many requests appear, the page gets overloaded and access is restricted. Such a break in full access to the site may result in costs and loss of customers;
- viewing the offer and leaving shopping baskets (disturbing indicators of satisfaction measurement, e.g. Net Promoter Score (NPS));
- influencing the load time and performance of websites, which frustrates physical users and reduces their level of satisfaction.
Programs in the form of bots are dishonest and create a false impression of interest in the product/service by the customer. In addition, organisations must be prepared to "share" information about their users with intermediaries (in the form of, e.g. advertising space providers) and the effect of not complying with promises when buying an advertising package (e.g. traffic may be redirected by bots to inappropriate or false sites or advertising may appear in a non-contractual location).
Everything changed since the Blockchain technology – or intelligent contracts – are used in marketing; it creates an opportunity to directly target advertising messages to individual customers who give their consent to share sales content and devote their time to reading the information.
What is the Blockchain technology and why is it important?
The technology was created in 2009 as an improvement for cryptocurrency transfer. Its main assumption was to enable digital and fully anonymous payment transfers between two parties, without verification and interference by third parties in transactions. Not so long ago, Blockchain was something revolutionary, and currently it’s becoming a standard in many industries.
In a nutshell, Blockchain is a decentralized, distributed infrastructure that incorporates a fully encoded database. The said database is treated as a kind of public book in which all established transactions on the Internet are saved and stored. This book is updated and expanded (but not changed!) by people using this technology. All transactions form the so-called “blocks” that are being filled up with data (e.g. about financial transactions, medical information, sale/purchase of goods, bought shares, ownership of property, performed work). Then, when a particular block is filled with information, another block is created, which – in connection with the previous one – begins to form a chain. Data stored in a decentralized system is safe and does not get into the hands of intermediate parties – users are sure that they have full control over the direction and purpose of their data transfer.
So it is not surprising that industries such as: creative, marketing or advertising are very keen on using the Blockchain technology, especially due to the ability to store and distribute information that is authentic due to the inability to modify/copy it. What gets saved in Blockchain, stays there forever.
What technologies is Blockchain built from?
It is very important what the Blockchain technology is built of. First of all, it is a combination of three well-known and willingly used technologies, such as public key cryptography, Peer-to-peer model of computer network communication and open protocols. In the digital world, the basis is to determine whether a given request for access to information is authorised and authenticated, and therefore – trusted. Thanks to the Blockchain technology, this problem disappears, because any authentication or authorisation in the case of reading an encrypted message is done via private key. The private key is in the sole possession of the information addressee and only they can read it, while public keys are used to encrypt that information.
The use of the Blockchain technology in marketing
The Blockchain technology can forever change the marketing activities and the manner in which advertising messages are made available to recipients in the network. First of all, the technology excludes the participation of intermediate parties in advertising activities. The compulsion to buy advertising space on the web or to share information about users in exchange for the service execution disappears. Blockchain means that organisations can pay (cryptocurrency micropayments) directly to the selected users for taking the time to become acquainted with a given advertising message (e.g. with an advertisement, with asking for a subscription, with a sponsored article). This way, they can avoid the process of buying advertisements from an external supplier. Blockchain is transparent, which makes it easy for organisations to determine if the person who received the advertising message is interested in it or not (users choose materials that they would like to read or see). This way, you can provide content that is attractive to specific audiences and reduce spending money on ineffective advertising.
The Blockchain technology in marketing ensures full transparency and allows for, e.g. tracking the chain of suppliers (that is, check all involved entities and see the entire path that a given product had to take to reach the end user). As a result, the recipient knows exactly who they entrust their data as part of the transaction. They can easily check what is the profile of an organisation, what values a company professes, what business practices it employs, how many employees work for it and what positions do they hold. In addition to public information about the organisation, the company may also provide detailed information about its offer. By presenting documents related to the launch of a new product/service on the market; confirming the obtainment of a quality certificate/patent or openly communicating about the ways of producing goods/services, brands gain credibility. Companies show what they really are, giving up presenting themselves only in a positive light. Customers appreciate the immediacy and honesty that the current world of marketing tricks is lacking.
Thanks to the Blockchain technology, the user makes the decision about the amount and quality of data (demographic, psychographic, economic and social) that they want to convey to advertisers during the search process. Based on information provided voluntarily and directly by its owners, you can build fully credible customer profiles. Rather than being "potential", the status of your customers will always be "certain". In return for providing data about themselves, and thus "selling their privacy", they usually receive a small monetary compensation (in the selected cryptocurrency). The data provided (supported by the obtained consent for processing) must be adequately secured against loss, considering GDPR (General Data Protection Regulation), which will come into force on May 25, 2018.
The Blockchain technology is eagerly used due to its many advantages, including resistance to cyber-attacks by using cryptography; no obligation to engage intermediate parties for transactions; resistance of IT systems thanks to decentralisation and dispersion; transparency; anonymity of activities. We are already looking for other possible ways of using it to change the image of industries that strongly affect people’s lives.