Impact of cryptocurrencies on Digital Marketing and Social Media

The popularity of cryptocurrencies has grown exponentially in recent times. Bitcoin is the most popular crypto currency currently, however there are many others like Ethereum, Dogecoin etc. which are being used in financial transactions globally. As a result, cryptocurrency has created an impact in multiple fields like investment banking, healthcare, real estate and, even digital marketing. This is an exciting phase where digital marketing trends are being tailored due to the impact of the pervasiveness of cryptocurrency in e-commerce.

Digital Marketing – Industry Players

The digital marketing industry has four major stakeholders: User (end user or customer), Publisher (content creator), Advertiser (companies trying to promote their goods using digital marketing), Social Media Platform (Twitter, YouTube etc.). The advertiser currently pays a commission to the publisher so as to leverage the publisher’s audience and also pays for the ad space to the platform. Blockchain technology has the capability to radically alter this current model and provide benefits to the players.

What is Blockchain Technology?

A blockchain is an open, distributed ledger that records transactions in code. Transactions are recorded in “blocks” which are then linked together on a “chain” of previous cryptocurrency transactions. The advantage of this structure is that every cryptocurrency user has a copy of these transactions, thus maintaining accuracy and transparency in the blockchain. Apart from cryptocurrency, blockchains can be used to track information like medical transactions, home purchases and voting records.

How can Blockchain revolutionize Digital Marketing and Social Media?

Some of the ways by which blockchain can potentially impact digital marketing are detailed as follows:

• Anonymity for users: Data privacy has become an important issue with instances of platforms using and selling private data to advertisers without consent of the customer. Blockchain technology has the capability to provide more privacy as user data (e.g., names, social security number etc.) would remain anonymous to everyone, except the parties directly involved in the transaction.
• Removal of middleman: Transactions on e-commerce sites usually involve multiple parties e.g., if a customer purchases a product on the Amazon website, the buyer and seller banks are both involved in verifying identities and in confirming that the transaction is genuine. Blockchain technology eliminates the requirement of a third-party market place and does not involve banks or transaction fees associated with the purchase by the customer.
• Even compensation: In traditional digital marketing, it has been observed that platforms are the main beneficiaries of royalties received when publishers allow advertisers to promote a product on their content space. Having blockchain technology in the mix will allow publishers to earn more on the revenue generated from advertisements and will assist in limiting the influence of the platform in the advertising process.

Basic Attention Token (BAT)

An example of cryptocurrency-infused digital marketing is the Basic Attention Token (BAT). This is a digital advertising token which is built on Ethereum blockchain. BAT helps to create an ad exchange which connects advertisers, publishers and users in a decentralized manner and removes unnecessary expenditure related to ad networks. The other major advantages of BAT are as follows: –

1. Users earn for their attention: Users can be encouraged to earn BAT in return for watching whole advertisements. This would lead to better profit generation for the entire ecosystem, including higher revenues for publishers and advertisers.
2. Advertisers get better return: BAT has its own native browser named “Brave” which has an anonymous accounting feature. This provides advertisers with more accurate consumer information and consequently, the effectiveness of the advertisement.
3. Publishers get paid for premium content: Publishers can integrate premium features and charge users BAT for premium content and subscriptions. This will lead to a higher monetary benefit for publishers in the digital marketing space.

Final Thoughts

Social media has played a pivotal role in amplifying the ubiquity of cryptocurrency and related features in global societies. However, as has been discussed, cryptocurrency has a lot of potential in revamping the existing digital marketing landscape and this can lead to the development of interesting trends and a more widespread use of blockchain technology. Cryptocurrency has already had a telling impact on digital marketing and social media and there is much more to come!