The impact of cryptocurrencies on various sectors of the world economy is just beginning to be felt. It has been argued that cryptocurrencies will have its greatest impact in the financial sector. That could be true with coins like Bitcoin already causing disruptions in the financial sector.
While it’s hard to dispute, we can’t assume that blockchain technology will have a lesser impact in other areas. We expect to see crypto projects in medicine, sport/gaming, renewable energy, social media and digital marketing.
In this article, we look at the general impact of cryptocurrencies on digital marketing. The impact is both positive and negative. This means that digital marketers are set to benefit from the increased use of blockchain technology. However, they will also get affected when cryptocurrency technology disrupts the market.
Here are four ways in which cryptocurrency impact digital marketing.
Hard to access consumer data
Cryptocurrencies are already impacting digital marketing by making it a lot harder for marketers to access data from consumers. It is unlikely that companies like Facebook and Google will have an easy time. Collecting user information that is then sold to advertising companies will be difficult.
In the last few years, cases of media monitoring have more than doubled. Companies have literally scrambled for digital breadcrumbs from the internet. This relates to how people respond to products, what they buy and how they share that information across the many social media platforms. All these have formed part of the predictive capabilities of the ad companies. It even makes targeted advertising possible.
It has been quite easy for digital marketers so far. However, Blockchain technology, to be specific, cryptocurrencies, is changing this scenario. Cryptocurrency uses cryptography and other obfuscation protocols to make users’ metadata anonymous and private.
Security is a big issue in cryptocurrencies. Various encryption methods are employed to make it tougher for third parties to access personal data like emails, addresses, and phone numbers. People are now more knowledgeable about how to secure their personal information than before. The rise of privacy-focused cryptocurrencies will make it even harder for digital marketing to access user data.
Cryptocurrency empowers the consumer
Widespread use of cryptocurrency may force digital marketers to directly pay the consumer for data. This will arise once most people start transacting in cryptocurrency like Bitcoin. The implication is that getting data will be even more difficult.
As we explained above, no personal data will be available on the blockchain since everything is encrypted. Even with pseudonymous cryptocurrencies like Bitcoin, accessing an individual’s personal information is not easy. So, the consumer has the power in his hands. And that’s how digital marketers may end up being forced to pay consumers for their personal information.
To get around this, some companies may resort to media monitoring with the hope to gather information for marketing purposes. It may work, but with the rise in cryptocurrency-based social platforms, lesser and lesser will be available. And consumer awareness would eventually force marketers to seek out and pay consumers for their private information.
The flipside, however, is that marketers would be getting vital information from consumers. These consumers are likely to be ready to respond positively to the ads. It would be more like a co-creation exercise for the marketers.
No need for middlemen
This is going to be one of the major ways in which cryptocurrency could impact marketing. By middlemen, we are talking of banks, insurance companies, data companies like Facebook and Google, and so on. How is this possible with cryptocurrency? Remember we said that cryptocurrency will make it harder for marketers to access consumer information, right?
Well, that will still be the case. But therein also is the possibility for ad companies and other marketers to cut out the middleman. The middleman, apart from consuming a huge chunk of advertising revenue, may also have vested interests in the outcome of the marketing campaign. For instance, Facebook tweaked its algorithm to de-prioritise certain types of advertisements. The company acted selfishly because it is centralised.
Nevertheless, this is where cryptocurrency may help digital marketers. Through the use of decentralised apps and smart contracts, marketers can source for consumer information directly at a fee as described earlier. The advantage here is that the self-executing contracts won’t be under the control of anyone. Again, users who opt into a smart contract are likely to give more useful information. This is in contrast to what marketers get from companies like Google rely on for information.
Blockchain-based cryptocurrencies will help marketers build consumer trust in their brands. It should be noted that cryptocurrencies like Bitcoin are open-source and decentralised. This means, therefore, that all transactions on the blockchain are verified by several people before being recorded on the public ledger.
Companies that embrace blockchain technology stand a better chance of being seen as transparent and therefore accountable. The same will apply to a company that adopts a blockchain-based solution to issues like handling the supply chain. Consumers are likely to trust such a company because everything is recorded in the public distributed ledger.
The other thing that may not be so big on digital, but is great for a brand is pioneering. A company/brand that supports innovation and technological advancement is seen as a pioneer. People tend to trust it due its standing. Selling policies and advertisements to an increasingly crypto-savvy society will be easier.
In short, for digital marketing to benefit from the emerging technologies, moving with the times is the only added advantage. There are no two ways about it as cryptocurrency is surely set to continuously revolutionise the world economy.
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