If digital marketers seriously weigh the pros and cons of cryptocurrency-driven digital marketing, they are bound to realize its value and worth.
Cryptocurrency and blockchain technology are steadily being adopted by a growing number of industries. For instance, not only is blockchain used in things like trading and finance but it is even used in healthcare as a way of storing patient data. In the coming years, we will begin to see more cryptocurrency in the digital marketing industry.
Only a small percentage of big businesses have made a firm decision to use cryptocurrency in the near future, but it’s inevitable that many other companies will follow the example set by those who do. But what will crypto’s effects on the market be? And what are the pros and cons of a crypto-driven digital marketing industry?
What Is Digital Marketing?
Digital marketing, otherwise known as online marketing, is advertisement and brand promotion that is carried out through electronic devices. You probably see examples all the time without thinking about it. For example, social media posts, search engine marketing, and display ads are all types of digital marketing.
Modern digital advertisements currently focus on reaching as many people as possible in the hopes of achieving a decent sales conversion rate. This strategy, known as shotgun marketing, is by its nature quite indiscriminate. This might be due to the fact that the intended audience is very large or due to the fact that there is no target demographic at all.
To determine the target market for their product, marketers acquire statistics about the public’s browsing and purchasing habits from private businesses. But without conducting surveys, it’s difficult for businesses to know whether their commercials were successful.
What Effect Does Crypto Have on Digital Marketing?
So, when cryptocurrency is incorporated into digital marketing, what changes can we expect to notice?
Current digital commercials involve four bodies: you, the consumer; the content creator; the advertising team; and whatever platform is hosting the ad, whether that be Google, YouTube, Twitter, et cetera. Crypto-driven marketing eliminates the need for a hosting platform, cutting out the middleman.
Rather than paying platforms such as these, advertisers will put their commercials onto a blockchain. From that point onwards, they will be made available to the blockchain’s users. This move to blockchain technology is inevitable with crypto’s rise in popularity, but marketers will first have to understand the advantages and disadvantages of crypto-driven advertisement.
Digital marketing teams will also have to find ways to work around blockchain’s limitations on data collection. Rather than collating information from on-site users to determine their target demographic, businesses will have to use social media sites to generate interest in their products and services. Promotion, link sharing, and discussion in online forums will replace the current shotgun marketing strategy.
Blockchain users will have the opportunity to choose which commercials they want to view. By engaging with these commercials, users will receive crypto tokens in return, incentivizing them to engage with advertising. Blockchain users will also be rewarded with cryptocurrency when they offer their personal data to advertisers.
Crypto-driven digital marketing gives the public the chance to curate their digital marketing experience. Not only will the public be given monetary rewards in exchange for their information, but they will also have a greater say in the kind of information they give away.
What Are the Pros and Cons of Crypto-Driven Digital Marketing?
As with any marketing strategy, the crypto-driven advertisement comes with both benefits and disadvantages. It’s important for digital marketers to give these some serious consideration before embracing blockchain.
This section will detail some of the main pros and cons of blockchain-based digital marketing.
- Higher sales conversion rates. If people elect to see your adverts, then it stands to reason you will see a higher conversion rate than when uninterested parties have no choice but to sit through your commercials.
- Lower advertising costs. Blockchain-based digital marketing gets rid of the middleman, meaning advertisers will not have to pay platforms to host their commercials. This will bring costs down.
- Fast, unmediated transactions between customers and businesses. Removing platform hosts from the equation also means that direct transactions between businesses and their client base can be implemented more easily.
- Greater emphasis on consumer data protection. Due to its anonymous, decentralized nature, blockchain is considered very secure. This means consumers can rest easy knowing that their data is better protected.
- Reward schemes encourage feedback. With consumers being rewarded for submitting data and interacting with ads, it’s reasonable to assume companies will see an increase in feedback from consumers.
- Advertisers won’t be able to gather as much consumer data. While a greater emphasis on data privacy is good for consumers, it does make it considerably harder for advertising teams to gather data on their customers.
- Difficulties in finding a target demographic. Companies may find difficulty in targeting a particular demographic through blockchain.
- Advertisements must be more appealing and engaging. To stand the best chance of grabbing the attention of blockchain users, digital marketers will have to work especially hard to make their commercials enticing and eye-catching.
Before marketers can incorporate Bitcoin and crypto into the digital marketing industry, they must first consider possible solutions to the above downsides.
This is nothing new, however, marketing is always evolving and changing. Whenever new advertisement methods have arisen in the past, marketers have always had to find ways to navigate them. In this respect, Bitcoin is no different.
Here are some actions digital marketers might opt to take to try and solve these issues with crypto-driven marketing:
- Using specific advertisement tokens on their favored platforms.
- Make use of promotional content and events to draw potential customers to specific blockchains.
- Making it a requirement that blockchain users register for particular cryptocurrency wallets so that they can store advertisement tokens.
- Having consumers fill out Know Your Customer (KYC) checks before they can use specific platforms or receive rewards through them. KYC processes allow for data to be collected about consumer habits and earnings.
Blockchain-based advertisement represents a new world of exciting opportunities for marketers – but it also presents new difficulties and challenges. These challenges can be overcome, however. In fact, they have been overcome before, when advertisers rose to the challenges presented by e-commerce and consumers shopping online.
While crypto-driven digital marketing will certainly come with difficulties, it will also allow consumers a greater amount of control over how and with whom they conduct business. This will only boost innovation and competition, rewarding businesses who work hard to create compelling advertising campaigns on a blockchain.
All in all, if digital marketers seriously weigh the pros and cons of cryptocurrency-driven digital marketing, they are bound to realize its value and worth. All that remains then is to try and figure out ways to deal with the drawbacks of cryptocurrency. But, as an industry that is grounded in innovation and new ways of thinking, it’s a certainty digital marketing will overcome these challenges.
Michelle is a Marketing Analyst and Blogger in Scanteam. She's been working with web analytics, data collection and analysis for 7 years. She also works in the area of Big Data. Her experience helps to be a professional in marketing and related industries.