Blockchain technology in marketing
Marketing
Posted 19 Sep 2024
Digital twins, robotics or AI – the latest technologies have one thing in common: they use the universal currency of the 21st century as the foundation for their far-reaching success – data. Without using production data, there would be no digital twins; without comprehensive machine environment analytics, there would be no cobots; and without databases, no learning material for artificial intelligence and algorithms.
No wonder, that data – the most valuable asset of digitalisation – is the focus of the latest technological developments, and that ways are being investigated to protect it as well as possible. A central key word here? Blockchain technology. As a decentralised database management system, it guarantees the security of critical data and information – making it one of the most important future technologies for marketing.
While most people now have a good idea of what the term bitcoin refers to – namely a type of digital currency – blockchain is still a mystery to many. The simplest way to think of blockchain is as a kind of digital ledger, without going into too much detail about the technology behind it.
Whereas in an analogue ledger, all entries are recorded in a central location, the blockchain is visible to all participants – and is updated by them collectively. The fact that the central data in the blockchain cannot be tampered with – in fact, the blockchain would have to be altered equally for all participants – makes it particularly secure, and the information and data stored on the blockchain cannot be changed. This unique feature naturally makes blockchain interesting for marketing – after all, it opens completely new possibilities for marketers.
A key issue in digital marketing is the loss of consumer trust caused by data misuse and lack of transparency. There are plenty of examples of leaks, theft and simply irresponsible handling of customer data and most people can probably recall their own experiences in this regard. This is exactly where blockchain technology is a sharp sword that can add significant value for marketing managers.
1. Secure data and reliable statistics
Thanks to its ability to store data in a tamper-proof way, blockchain enables verifiable advertising statistics, ensuring that clicks and views are real and not generated by bots – a key benefit for advertisers. At the same time, blockchain also helps consumers gain trust: the technology ensures that their personal data is protected and not misused. Although the information is stored permanently, the blockchain ensures that only authorised parties have access to the data, ultimately boosting consumer confidence in data protection.
2. Personalised offers and redefined data privacy
In marketing, blockchain not only offers improved management of user data and protection against unauthorised access, but also opens new possibilities for customer loyalty and personalised offers – without threatening user privacy. A key concept is self-managed identities, where users have full control over what data they want to share with companies. This data is stored in encrypted form on the blockchain, and users can decide who has access to it.
The encryption inherent in the blockchain ensures that data privacy is guaranteed. At the same time, consumers can be rewarded for sharing this data – whether it’s through discounts, exclusive offers or other benefits. Businesses profit from high-quality, voluntarily shared data, which they can use to target their audiences more accurately and efficiently. It is a true win-win situation!
3. Revolutionary customer loyalty programmes
Blockchain technology offers a completely new approach to customer loyalty programmes – one that is often superior to more traditional systems. In traditional programmes, loyalty points are typically tied to a single brand or company, severely limiting the options available to customers. Blockchain solves this problem by tokenising rewards. Loyalty points are converted into digital tokens that can be used or even traded not only with one company, but also across brands. This flexibility makes loyalty points much more attractive to consumers and versatile in use.
The use of smart contracts – self-executing contracts that run on the blockchain – makes these processes even more efficient. Once an agreed condition is met, such as reaching a certain number of points, the reward is automatically executed without the need for an intermediary. This reduces administrative costs and minimises errors, as the process is transparent and tamper-proof. Blockchain plays a crucial role here, as it forms the basis for these tokens and smart contracts. Its decentralised, immutable nature ensures that all transactions are transparent and secure without the intervention of a central authority. These builds trust between businesses and customers, and offers a solution to the inefficiency and inflexibility of traditional loyalty programmes.
Despite the many benefits, there are challenges with implementing blockchain in marketing. A key hurdle is technical complexity and limited scalability: most blockchain networks can currently only process a limited number of transactions per second, which leads to overloading when large amounts of data are involved. Solutions such as layer 2 technologies could solve this problem in the future.
Another issue is the lack of clarity in the regulatory environment. Many countries still lack clear rules for the use of blockchain, which creates uncertainty. However, new regulations are being developed in some countries, which could mitigate these challenges soon.
Overall, blockchain technology offers enormous potential to fundamentally change the way we understand marketing. It enables companies to operate in a more transparent and trustworthy way, while at the same time giving control of their data back to consumers. Companies that embrace this technology early on can gain a decisive competitive advantage and sustainably strengthen the trust of their customers. To stay up to date with the latest developments in marketing, please feel free to visit our social media channels – where you will find weekly posts on a variety of interesting topics: LinkedIn, Instagram, Twitter.
Junior Communication Consultant at HBI Communication Helga Bailey GmbH
Elena Sauter has been supporting HBI in the areas of PR and marketing since 2022. As a Junior Communication Consultant, her responsibilities include the creation of professional articles & the conceptualization of social media postings. Furthermore, Elena is involved in directly assisting our client work.
