Many still link cryptocurrency and blockchain only in the finance and banking industry. While this may be true, the rise of this virtual currency is also starting to impact businesses—especially in digital marketing.
Cryptocurrency investments in small and large businesses may help companies grow in the future. Now, the question is, how exactly does crypto work in digital marketing? Read on.
What is Cryptocurrency?
Although crypto has been around over a decade, many people still don’t understand the concept. So before we dive into the effects of crypto in digital marketing, let’s first discuss what cryptocurrency means.
Cryptocurrency is a digital currency encrypted and secured by cryptography, which makes it impossible to counterfeit or double spend. Each new transaction is automatically logged and updated in a decentralized ledger known as the blockchain technology that ensures every transaction you make is accurate and recorded.
Another thing about crypto is that everybody can see what is happening in real-time because no central authority handles it. This way, crypto is immune to government interferences and manipulations.
Cryptocurrency and Its Effects on Digital Marketing
Now that we’ve established the meaning of crypto, it is time to understand its role in digital marketing.
Since then, marketers have approached a large audience through advertisements, promotions, and sponsored events in hopes of high conversion rates. All of this is powered by the data collected by the companies on their consumers. Marketers must gather this information since they rely on them to create a specific digital marketing campaign to reach their prospects.
In essence, the public has no control over what advertisements they see, and there is no compensation tied to the time spent watching the ad. It is also extra challenging for the marketers’ side to know which ads are effective and which customers respond to them.
But, through cryptocurrencies and blockchain technology, consumers take the upper hand by choosing what types of ads they want to appear in their algorithm. Also, an Ethereum-based token known as BAT (basic attention token) and Presearch (PRE) helps monetize users’ experience and reduce unnecessary advertisement costs. This system rewards all parties: the advertisers, users, and publishers.
So how does this work?
Modern digital advertisements consist of four parties: consumers (you), publishers, advertisers, and the platform (e.g., Google, Facebook, Youtube).
For instance, an advertiser gives the publisher a commission to leverage its audience. But it doesn’t stop there. The advertiser also needs to pay for the platform that hosts the advertisements—resulting in the ad space getting most of the profit.
With cryptocurrency, the number of parties involved in the process reduces. Instead of using a platform to host marketing campaigns, advertisers can now upload their ads to a blockchain, and this blockchain will make them available to its platform users. This way, you will be able to lower your advertisement costs because fewer parties are involved.
Moreover, blockchain technology allows platform users to select which ads they want to view online. And once they engage with a particular ad, rewards are waiting for them in the form of a crypto token.
Pros and Cons of Using Crypto in Digital Marketing
Despite its continued traction, cryptocurrency is still an emerging system that entails many risks among its numerous benefits, especially in the marketing industry, where only 9% of large companies are committed to accepting crypto tokens in consumer transactions. Below are the pros and cons of using crypto in digital marketing:
- Ads are easier to locate using keywords and phrases when they are on the blockchain.
- It provides a higher conversion rate for engaged customers than those who view the ads forcibly.
- Customers can receive tokens when engaging with ads and providing their information to advertisers.
- It offers transparency, protection, and security over customers’ data.
- It reduces unnecessary advertising costs brought by platforms.
- It ensures direct and fast transactions between the advertisers and customers.
- Marketing campaigns must be relevant and compelling to attract platform users.
- Advertisers must carefully choose and research which blockchains to host their ads.
- It will be challenging to gather data about the public and their prospects.
- Targeting a specific audience on the blockchain is far more complicated.
Incorporating cryptocurrency in your advertising techniques presents both enormous opportunities and difficulties. Blockchain users are given more protection and privacy by crypto-driven digital marketing than conventional marketing techniques. While it is true that this concept is still in the works to present stable results in digital marketing, there is no denying that this makes for a great innovation once it unfolds in the years to come.