Blockchain has become a more widely-understood term since cryptocurrencies spiked at the end of 2017, but what does it have to do with marketing?
Although it is often associated with digital currencies, it's essentially just a specific type of database used to store information, meaning it has a wide variety of applications across many industries. For marketers, it can give them a better way of processing the vast amount of data they have about their target audience.
What is blockchain?
Blockchain is a system of distributed shared ledgers that keep a record of transactions across multiple computers at the same time. Records are added in blocks, which then connect with the others - thus the name. This structure means it's possible to share and add large amounts of data without jeopardizing the security of the new information or that already being stored.
Many people believe blockchain fosters trust and transparency, and is likely to enter the mainstream soon. But it's not just investors or computer specialists that need to pay attention; there's a huge amount of potential for marketers too.
Data-driven marketing has taken over the industry in the last few years, as businesses better understand how the information they collect on consumers can inform and shape marketing strategies.
Companies have more data at their fingertips than ever before, but determining the accuracy and reliability of the information is often a stumbling block. This is a particularly important point for marketers, as misunderstanding your target audience can lead to a PR disaster or complete disengagement from consumers.
Blockchain technology for marketers
Blockchains can validate the information being used in data-driven campaigns by analyzing and verifying every customer journey. This limits the threat of ad fraud from automated bots for brands by checking that a real person has seen the advert and acted upon it. It can also give marketers more transparency over how their ads are being engaged with by allowing them to monitor ad placement.
Utilizing blockchain technology can make ads more accurate too. Although many brands try to give their audience a personalized experience, often it's more a process of trial and error than anything else. However, blockchain can make the customer journey more sophisticated by preventing users from being bombarded with the same advert time after time. Blockchain can provide more sophisticated tracking than most companies currently use so it can determine the optimal ad strategy for each unique user.
Is it a practical solution?
There are still a number of obstacles that are preventing blockchain from being fully implemented by marketers, though. Aside from budget constraints or lack of specialist knowledge, there are problems with the technology itself. Ad-tech transactions usually take a matter of milliseconds, but with blockchains this would be extended to up to 30 seconds per transaction.
For many brands this will be enough to deter them, for now. But as the technology becomes more sophisticated and widely used, it's likely that solutions will be found to fix blockchain's speed problems. This could mean the technology vastly changes how marketers process their data sculpting strategies.
So blockchain shouldn't be catching any marketer off guard. Professionals need to understand the ways in which the technology can benefit brands and their campaigns, especially if data-driven marketing is a top priority. However, identifying the problems that implementation could cause will increase the likelihood of delivering a successful strategy and not being blindsided by blockchain.
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