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What Digital Marketers Need to Know About Blockchain
The World Wide Web 3.0 is fast approaching. As all businesses know, the Internet has single-handedly changed the realms of sales and marketing. With every new technological innovation, businesses must adapt their strategies to remain competitive.
At present, the way we currently understand how the Internet works is based on hypertext transfer protocol (better known as HTTP). In an enlightening 2009 TEDTalk, the English engineer, computer scientist and inventor of HTTP Tim Berners-Lee said that the next phase of the web will directly deal with data sharing and the concept of “linked data.” Linked data, as Berners-Lee outlines in the talk, will be adopted conceptually as “blockchain” and will address the issue of data ownership in the digital age.
Could This Be the End of Web 2.0?
In 2018, we are right at the tail end of Web 2.0. Marketers are dealing with an overwhelming amount of data, most of which is managed and created by the largest tech companies, like Google, Facebook and Amazon. The accessibility to and ownership of this data is an issue that is constantly raised in some of the most important debates in our government and industries today. Who controls the distribution of data online? Who is given access to the data that is shared by consumers?
Since data is mostly monopolized by the major tech companies, many marketers feel they are being cheated out of data that they should be able to claim for themselves. Companies like Facebook, which has nearly 3 billion users worldwide, have a massive amount of influence over digital marketing, becoming walled gardens of data. In certain cases, marketers want to regain this control or to at least be able to claim some of this marketing revenue. After all, it is their products and their advertising dollars being spent.
With blockchain, this debate ends.
What Blockchain Means for Marketers
All business owners should recognize that blockchain is much more complex than cryptocurrencies like Bitcoin. In fact, it is the ultimate peer-to-peer network that will disrupt countless industries. At its most basic understanding, blockchain gives consumers the chance to store and distribute data without having it copied by central authorities. This means that users are responsible for managing the upkeep of their stored data, since the technology is entirely decentralized.
As mentioned above, at the tail end of Web 2.0, central authorities (like banks and government entities) generally manage consumer data. But with blockchain, this will no longer be the case, granting users greater cybersecurity and jurisdiction over their own data.
While it may seem like the financial sector will face the most changes from blockchain innovations, digital marketers will also need to adapt to using this technology. As a result of blockchain’s enhanced privacy, consumers who use cryptocurrencies and blockchain technology to complete transactions will be able to do so anonymously. This will have a significant impact on digital marketing, which currently relies on the purchasing of this type of data from tech companies.
To dissect the main ways that blockchain will affect digital marketing, here are the main areas where marketers can expect changes:
Goodbye to the MiddlemanCurrently, the middleman is a main player in digital marketing, as companies must invest in advertising in order to attract customers. Blockchain will essentially eliminate the need for a middleman—or, in other words, central authorities like Google or Facebook—that control ‘transactions’ or marketing/ad campaigns. Instead, marketers will be able to communicate directly with the platform where they wish to publish an ad. This way, blockchain makes it easier for marketers to target real users without needing any mediator to sanction the ad or marketing strategy. In the short-term, this will decrease marketing and advertising costs while (hopefully) increasing profit margins.
Reversing the Current User ModelMost often, consumers feel undervalued by marketers today when their personal data gets used for the wrong reasons, like spam or irrelevant campaigns. However, blockchain returns the power over personal data to the consumer and effectively reverses the consumer model. Once personal information is managed in blockchain’s more secure database, digital marketers may have to seek permission to use certain data. For example, in a recent radio interview, one blockchain expert said brands may have to change the way they gain subscribers. Instead of requiring users to subscribe to a newsletter or e-mail list, consumers now have the power to respond autonomously—and even require payment from marketers seeking their loyalty or personal data.
Ensuring Brand RelevanceDigital marketers are consistently being challenged to keep up with current trends and technologies. Having a cryptocurrency-friendly method of payment may be the most effective way for businesses to remain competitive in future markets. Furthermore, using blockchain to formalize international or digital negotiations between businesses can also give you an advantage over other companies. Besides being a more secure way to conduct business transactions, this is beneficial from a marketer’s point-of-view, as it will add to the relevance of your branding. Digital marketing teams that embrace emerging innovations are always the ones that are regarded as most cutting-edge, which will inevitably lead to profitability.
Looking to the Future
For digital marketers willing to take advantage of blockchain as Web 3.0 takes hold, the possibilities are limitless. Over the next several years, the changes that will take place are set to have a massive impact on data-driven marketing. It’d be a mistake not to recognize the implications for the business sector and the digital marketing/advertising sphere. The question is: are you ready?