With blockchain and crypto penetrating various business niches, from healthcare to algorithmic trading and proving its worth, digital marketing is now striving to adapt to the world of crypto. Although only around 9% of large companies have committed to accepting crypto tokens in consumer transactions over the next few years, others will follow. Thus, it is important to understand how cryptocurrency will transform digital advertising.
Digital Marketing Today
Currently, digital marketing uses a shotgun approach to reach large audiences. It pushes its adverts, promotions and sponsored events into the faces, places and spaces of large audiences and hopes for high conversion rates, like 2% of the audience reached by the adverts.
Additionally, it decides which members of the public are likely to purchase its goods and services using data collected about the public by private companies. These private companies use the data for their own marketing campaigns or sell the information to other companies who want to use it to target specific demographics.
Notably, audiences have no control over how and when they are exposed to advertising content. Additionally, the audience is not financially compensated for the time they spend watching the advertisements. Finally, it is quite difficult for advertisers to know which advertisements have been effective and which viewers have responded to them.
The effects of crypto on digital marketing
Cryptocurrency will reduce the number of parties involved in advertising campaigns. Modern digital ads involve four parties: the consumer (you), the advertiser, the content creator, and the platform hosting the ad (eg Google, Facebook, YouTube). With blockchain advertising, advertisers can eliminate the platform hosting the advertisements. Instead of paying for them, advertisers will upload their ads to a blockchain, and the blockchain will make them available to users of its platform. In short, the future of digital marketing limits the interacting parties to three groups: consumers (you), advertisers, and the blockchain supporting transactions between consumer and advertiser.
As blockchain technology and cryptocurrency become more mainstream, digital marketers need to incorporate them into their marketing strategies and campaigns, for example rewards Where Loyalty programs. To do this, they need to understand the pros and cons of engaging in encrypted advertising in terms of usage and how to overcome its data collection limitations.
First, social media will play a key role in driving traffic to advertisers’ content. Advertisers will use online forums like Reddit, Discord, Twitter and Facebook, which will fuel interest in content through word of mouth. It is the promotion, discussion, shared links, etc. that are shared and discussed in these forums that will replace the shotgun advertising that is common today.
On the blockchain, platform users will be able to select which advertisements they want to see online. If they interact with advertisers’ content, they will be rewarded with crypto tokens. They will also receive paid crypto tokens for giving advertisers their personal data. So, in short, it is the audience who gets paid for their information and decides what information they will sell to the various advertisers. For exclusive advertising content, blockchains can require users to pay them for the privilege of accessing the content.
Crypto-Based Digital Marketing: Pros and Cons
There are many advantages and disadvantages to use crypto-based digital marketing. The ones listed here are the most obvious and will need to be addressed before they can be effectively implemented by advertisers.
- It will be easier to locate advertisements for goods and services of interest using keywords and phrases when the advertisements are on the blockchain.
- Consumers who engage with ads on the blockchain will have a higher conversion rate than those who are forced to see the ads.
- Consumers receive ad tokens for engaging with ads and sharing their personal information with advertisers.
- There is greater protection of consumer data and privacy.
- Advertisers will have lower advertising costs because there are fewer parties involved in their advertising campaigns. Although blockchains must be paid by making the advertisements available to users of their platform, the fees assessed are much lower than those charged by private companies like Google.
- More direct and faster transactions between advertisers and consumers are possible.
- No more fake experts, actors, fans, followers or other deceptions used to persuade the public to buy the promoted goods/services.
- Advertisers will choose which blockchains host their ads based on the reputation of the blockchain.
- It will be difficult for advertisers to collect large amounts of data about the general public and their customers.
- Businesses will find it harder to target specific audiences on the blockchain as they may not know how to capture their attention or interest.
- Digital advertisements will need to be more relevant, compelling, engaging and appealing to platform users if advertisers want platform users to select them.
Potential solutions from advertisers
The drawbacks faced by advertisers in the crypto-based marketing space have been faced by advertisers at every stage of the evolution of commerce. For example, the introduction of e-commerce baffled advertisers until they figured out how to collect data from consumers who shop online. Additionally, when social media sites became a social phenomenon, advertisers and social media platforms learned to passively collect warehouses full of social media user data.
Here are some actions advertisers can choose from:
- Use ad tokens specific to their preferred ad platforms.
- Use platform-specific promotions, events, and content to encourage consumers to use specific blockchains.
- Require platform users to sign up for specific crypto wallets in order to store their ad tokens.
- Require platform users to complete “Know Your Customer” (KYC) processes if they wish to use a platform or be rewarded with advertising tokens. KYC registration allows platforms or third parties operating on the platform to collect information about platform users through their activities on the platform and their token earnings.
Crypto-focused marketing strategies present huge opportunities and challenges for advertisers. These same pros and cons were there when consumers started using e-commerce, third-party payment processors, and coupons. In each case, advertisers were able to optimize their collection of consumer data and reach their target audiences. Yet crypto-based digital marketing offers blockchain users more protection and privacy than current marketing strategies. Additionally, the anonymity and transactional independence offered to individuals via Internet 3.0 is a welcome business development and gives consumers more control over how, when and with whom they do business. This creates greater competition and ideally more innovation in the crypto world.