What is blockchain in advertising

Blockchain

The term Blockchain is not only appearing more and more in the media. It will also play an even greater role for the Internet of Things in the years to come. If you take the term apart, it is a matter of partial areas or partial information (blocks) that are connected to one another by relationships (chains). In practice, the blockchain is a decentralized database that does not require an administrator. Several users can work on one file at the same time and regardless of their location. All you need is internet access and the right platform.

Advantages of a blockchain

The security of the document lies in the transparency for the respective participants. Changes can be determined and traced back to the respective user. This creates a forgery-proof file that is also protected from external interference.

A central collection point for information, such as financial accounting, can be minimized if the relevant items are added locally by the authorized users. The transaction can be verified through the possibility of tracing the data record.

With a reduction in instances, business paths are shortened. Ultimately, it is not only a question of great time savings in daily business processes, these also go hand in hand with financial relief for personnel and other fixed costs.

Application examples of a blockchain

The simplest example is a decentralized document that is continuously expanded and updated within the company. Probably the best-known tools for such documents are offered by Google. The programs Docs, Tables and Presentations can be used to create projects that authorized employees can open and edit.

In the future, more attention should be paid to applications that aim at cross-company communication. Consumers and suppliers are connected to one another by the blockchain and can communicate directly. The transparency gives both sides the greatest possible insight into transactions. These so-called smart contracts offer the contracting parties the opportunity to constantly exchange information without an intermediary body. Delays in the movement of goods or payments can be reacted to directly, which shortens the lines of action and saves important resources. In practice, in the event of a payment default, the service (e.g. web tool) can be restricted or completely paused by the consumer. If a supplier fails to deliver, the consumer can determine the source of the error himself and get in touch with the business partner.

One of the most popular blockchains at the moment is the cryptocurrency Bitcoin. The system of a blockchain has proven itself in many ways for the Bitcoin. Mining keeps creating new blocks that build on the predecessor. For this reason, the system must be both transparent and forgery-proof at the same time. It is important for miners to have access to the entire blockchain, as they create the new blocks on the one hand, but also check the created blocks for correctness and thus authenticate them at the same time. However, as the effort per block increases, so does the computing power required to create a bitcoin. In this context is the speed at which new bitcoins are produced. Although 90% of Bitcoins will have been created in 5 years (as of 2017), it will take until around 2140 before the last 10% have been mined.

Blockchain Marketing

The blockchain has the potential to advance the digitization of companies, as cumbersome customer relationships can be simplified and made more efficient. It will then be interesting for companies to join a blockchain in order to establish direct contact with the customer. In contrast to classic online advertising, blockchain offers advertisers an exact picture of the consumers who went to the respective advertisement. In a blockchain there are no bots or “hired clickers” that drive up the click rates of pages. Companies can thus not only read out exactly which target groups they have reached through an advertising measure, but also define precisely in advance who is to be reached.

With the spread of blockchains, companies could even skip the intermediary instance and address the end customer directly. The positive thing here is that only customers who are actually interested see the content and there is no wastage.

The block of a user or consumer is equivalent to a profile. It stores data from the person he wants to share in order to create an overall picture of himself for companies. This technology goes beyond cookies, for example, which store the behavior of a device. The user actively determines which data he wants to publish.

Since the greatest possible transparency for all contractual partners is guaranteed in a blockchain, consumers can understand the supply chains of the respective products. In the luxury goods market, it is particularly helpful for suppliers to label their raw materials and to reveal the route of goods so that customers can be convinced of the quality. Authenticity seals are therefore comprehensible for the customer. This gives the end consumer a great deal of influence on the final quality of the product. But not only luxury goods can be tracked. Even everyday products, such as organically grown food or animal products with the organic seal, can be tracked much better by consumers.

As an inevitable consequence, these transparent companies have to keep their promise to the consumer. Access to the market is made easier for companies that want to position themselves in the context of sustainability. It also offers the company the opportunity to develop its brand further and increase brand experiences.

The Brave Browser system offers a glimpse into the future of online advertising. Middlemen are skipped through the direct contact between consumer and supplier. If you reduce the number of platforms, costs are saved from the provider's point of view, which can be passed on directly to the customer. Incentives are created through rewards in the form of basic attention tokens. Companies receive tokens for views of their post, users receive tokens for the view of a post. Users can transfer their tokens to the company and reward good content, but also penalize bad content, such as clickbait. As a result, quality is always placed above quantity.

In order to make the blockchain successful in the long term, however, networks must first be built. The longer a blockchain becomes, the more valuable it becomes for advertising companies. At what point it will be worthwhile to get started in individual cases, it will possibly become clear as early as 2018.