Just when you thought you were getting the hang of digital marketing, it feels like everybody around you has started talking about blockchain. Wait a second—isn’t blockchain the technology behind Bitcoin? How on earth does that factor into digital marketing? Quite heavily, as it turns out—or at least, that’s what most experts are predicting will soon be the case. If you’re confused, don’t worry: you aren’t alone. Many digital marketing professionals are as yet uncertain of how blockchain technology will impact their line of work. That’s why we’re here to explain what blockchain is and how it’s probably going to change the nature of your job. Read on, and learn everything you need to know so that you can stay one step ahead of the competition when the time comes.
Let’s start with the basics for the uninitiated. Blockchain is a term that gets thrown around with regards to Bitcoin so often that some people might think they’re synonymous. Not so. Blockchain isn’t the same as Bitcoin—as mentioned previously, it’s the technology upon which Bitcoin (and most other cryptocurrencies) are based. Here’s how it works:
Blockchain is basically a way to record transactions digitally. On the basis of that fact alone, you might not think it’s so different from electronic banking or a credit card e-statement, but wait—there’s more. Unlike other forms of digital recordkeeping, blockchain technology does not keep information in a centralized location such as a database hosted on a server bank. Instead, blockchain creates multiple copies of the record whenever it is updated and distributes those copies to numerous devices on a worldwide network.
What’s the advantage there? Simple: it’s all about security. Information kept on a single server can be compromised if you know where that server is and how to hack it. However, with blockchain technology, any false record or fraudulent activity can be identified by comparing the compromised information with the other existing copies. Since these copies are all stored on different devices in a massive network, it’s practically impossible to get them all.
Here’s the takeaway for digital marketers: because blockchain offers security by verifying transaction details, it’s important for the cryptocurrencies that use it to safeguard the personal data of their users. As such, most cryptos (Bitcoin included) offer partial anonymity: you might have to create a Bitcoin address to use Bitcoin, but you don’t actually have to register it with your legal name or where you live. Because of this, transactions that use blockchain technology are practically always anonymous. When consumers are buying products and paying for services anonymously, marketers can’t analyze their shopping behavior to improve campaigns.
Fortunately, there’s a simple solution: just buy personal data directly from your existing customers. Start an opt-in program where you offer rewards or direct cash compensation in exchange for information you can use to create accurate buyer profiles. Don’t worry about the higher costs associated with buying data directly from your consumers, either—after all, you’ll be getting information from people who are already enthusiastic about your business, so the results will be much more valuable than the generic data marketers currently get from social media platforms.
Understanding the power blockchain has to change digital marketing will help you stay effective when cryptocurrencies become a normal way to pay for goods and services. If you’re going to accept Bitcoin as a form of payment (and there are many reasons why you should consider doing so), learning how to collect marketing data differently will be an essential part of your company’s continued success.