Description: Blockchains are very infuential in today's market. In the financial markets, blockchain technology has been significantly applied. This may be owed to the benefits associated with the blo

Blockchain and the Transformation of Marketing

The application of the internet and social media have transformed consumer conduct and how entities carry out their operations. Digital marketing provides substantial chances to entities through decreased costs, enhanced brand consciousness, as well as amplified sales (Dwivedi et al., 2021). According to Menon & Mady (2021), blockchain emerges as a peer-to-peer model that has the ability of speeding up processes resulting in robust trucking as well as reducing transaction costs. For the last five years, the use of blockchain has been used in different contexts. According to Sciarelli et al. (2021), although blockchain emerges as a new innovation, it is considered to revolutionize the arithmetical world by bringing a novel focus to resilience, security, as well as efficacy of business procedures.  Despite the mechanics of blockchain being extremely complex, its idea of decentralizing the storage of data to restrict ownership, control or manipulation by a central actor is simple (Chatham House, 2018). The purpose of this report is to discuss how blockchain can beneficially be utilized to influence marketing.

            One area in marketing that blockchain has influenced is authentication and transparency. In the past, customers used to purchase everything from Whole Foods to Craiglist to eBay and hoped that they were buying the items that were being marketed to them. For instance, customers could not verify whether the items sold were authentic, organic, or made in a fair-trade. However, with the use of blockchain, it is possible to understand different issues consumers may have regarding the items they are purchasing. For instance, through using blockchain, it is feasible for consumers to confirm where an item was grown or manufactured, the kind of soil used to grow an item, or how much workers receive as payment in the production of items. This is an important aspect in marketing where consumers are not just interested in the superiority of products they are purchasing, but also the veracity of company as well as the processes involved in creating products (Newman, 2019).

The digital marketing setting has expanded into an ecosystem having complex structures that consist of different intermediaries specializing in varied areas and functions. As such, the three key actors, including advertisers, publishers, and users all act in silos without anyone understanding the things the intermediaries are involved in doing. Besides, the digital marketing setting is heavily dependent on numerous intermediaries who exploit user data. It is questionable whether the key actors provide the value they promise. It has emerged that click-fraud has been prevalent as a result of the emergence of digital marketing. This form of ad-fraud has emerged because of lack of transparency by actors and intermediaries operating in the digital advertising setting. The use of blockchain has helped in increasing transparency in digital marketing.

Through implementing blockchain technology to digital advertising setting, the climate is made more transparent. Blockchain has the ability of making data-driven advertising more transparent by ensuring the validation and analysis of every consumer’s expedition through substantiated ad delivery, which confirms that a real individual has seen an ad as per the particulars of a media agreement (Adiguzel, 2021). Blockchain can permit advertisers review their ads, and check whether target customers have been reached, or if the adverts have been delivered at all. Also, the nature of the technology permits advertisers to trail the people involved in opening their ad and the location of customers. Blockchain offers advertisers with ways of auditing and verifying details associated with their advertising activities because of its attributes such as transparency and immutability (Blauer & Eriksson, 2020). According to Sharma (2020), blockchain assists advertisers to select the right publishers, prevent fraud, and build trust. Therefore, the technology also offers different actors with more insight as well as empowerment in the identification of fraudulent activities.

Blockchain has helped in the realization of marketing effect of almost-zero operation costs. Different transactions are considered to have substantial outlays. Retailers usually involved in paying credit card organizations 3% payment dispensation charges, while gas stations are considered to pay more charges. Vendors who use Shopify and eBay submit listing as well as sales charges while customers pay operation fees on payment portals such as PayPal. The charges have the ability of increasing the cost associated with goods, which is usually passed to customers. Based on the prevalent use of debit and credit cards, most merchants are involved in setting minimum purchases to evade the destruction of profits by the fees charged. Blockchain technology is considered vital because it allows near-zero transaction costs. Today, marketers usually attempt to access customer data through paying third-party companies to provide information. However, blockchain can permit merchants to utilize micropayments in motivating consumers to share personal data directly without the need of using an intermediary (Harvey et al., 2018). For instance, a store having an app can pay users $1 for installation of the app and an extra $1 in case they permit the app to track their location.

Moreover, blockchain has been considered to enhance privacy security. Privacy emerges as a compound issue that hypothetically increases anxiety of individuals in the use of online technology service. Customers are usually worried about their transaction anonymity as well as confidentiality. The concerns are due to the augmented danger of improperly receiving, misusing, and revealing their private information. According to Rejeb et al. (2020), blockchain alleviates privacy issues that impede customers from making online purchases.

Benefit

Who Benefits

Authentication

Customers and businesses

Transparency

Customers, advertisers, and businesses

Near-zero transactions

Customers and businesses

Privacy protection

Customers and businesses

Table (a): Summary of How Blockchain Can Beneficially Be Used to Influence Marketing

References

Adiguzel, S. (2021). The impact of blockchain in marketing. Socrates Journal of Interdisciplinary Social Studies, Vol. 10(7). DOI:10.51293/socrates.66.

Brauer, J. & Eriksson, B.L. (2020). Blockchain’s influence on digital marketing. Umea University. https://www.diva-portal.org/smash/get/diva2:1446822/FULLTEXT01.pdf.

Chatham House. (2018). Chatham house primer: Blockchain. Chatham House. https://www.chathamhouse.org/events/all/members-event/chatham-house-primer-blockchain?gclid=CjwKCAiAv_KMBhAzEiwAs-rX1Ld0CBqmnSlpnXvQeToCvJX3nlMqbtkzUmf3YQs9A9ZRFwb2qBRVQxoCR-oQAvD_BwE.

Dwivedi, Y.K., Ismagilova, E., Hughes, D.L., Carlson, J., Filieri, R. Jacobson, J., Jain, V., Karjaluoto, H., Kefi, H., Krishen, A.S., Kumar, V., Rahman, M.M., Raman, R., Rauschnabel, P.A., Rowley, J., Salo, J., Tran, G.A. & Wang, Y. (2021). Setting the future of digital and social media marketing research: Perspectives and research propositions. International Journal of Information Management, Vol. 59(102168).

Havey, C.R., Moorman, C. & Toledo, M. (2018). How blockchain can help marketers build better relationships with their customers. Harvard Business Review. https://hbr.org/2018/10/how-blockchain-can-help-marketers-build-better-relationships-with-their-customers.

Menon, M. & Mady, A. (2021). Blockchain: A non-technical primer for marketing academics. Marketing Education Review. https://doi.org/10.1080/10528008.2021.1943445.

Newman, D. (2019). How blockchain is changing digital marketing. Forbes. https://www.forbes.com/sites/danielnewman/2019/09/18/how-blockchain-is-changing-digital-marketing/?sh=67e1d8b016eb.

Rejeb, A., Keogh, J.G. & Treiblmaier, H. (2020). How blockchain technology can benefit marketing: Six pending research areas. Frontiers in Blockchain. https://www.frontiersin.org/articles/10.3389/fbloc.2020.00003/full#:~:text=With%20blockchain%20technology%2C%20brands%20can,and%20cash%2Dback%20incentives.

Sciarelli, M., Prisco, A., Gheith, M.H. & Muto, V. (2021). Factors affecting the adoption of blockchain technology in innovative Italian companies: An extended TAM approach. Journal of Strategy and Management. DOI: 10.1108/JSMA-02-2021-0054.

Sharma, T.K. (2020). Impact of blockchain in marketing and advertising in 2020. Blockchain Council. https://www.blockchain-council.org/blockchain/impact-of-blockchain-in-marketing-and-advertising-in-2020/.