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6-WEEK ONLINE CERTIFICATE PROGRAM
Blockchain has already started changing different companies and entire industries. While it may not be immediately evident, blockchain also has a role in the next generation of advertising and marketing. The backbone of the advertising and marketing industries, especially digital marketing, is formed from consumer data. Blockchain not only helps keep data secure, it can also improve tracking individuals, funds, and data across separate platforms, leading to greater bottom-line profitability.
Distributed ledger technology (DLT) is a crucial part of blockchain technology, making it apt for use within marketing and advertising. Distributed ledger technology allows each node (or server) running the blockchain to maintain its own ledger of information. This copy of the ledger can be synchronized in real time as new information becomes available and is added to the ledger.
Blockchain and DLT eliminate data silos created by variable access to the same data. With DLT, each stakeholder can access the ledger so that advertisers, agencies, demand-side platforms, ad exchanges, supply-side providers, and publishers can all see the same data. When companies and stakeholders access a decentralized and updated database through the blockchain and DLT, the results are powerful. Companies will have a full registry of information, ultimately translating to less fraud, reduced costs, and increased transparency.
It is estimated that upwards of $20 billion in fraud collectively occurs every year in the advertising and marketing industries. However, blockchain technology can help reduce these unnecessary costs, which ultimately impact the consumer. In addition to DLT, other characteristics of blockchain, such as consensus, provenance, immutability, and finality, help to protect all stakeholders from fraud.
Consensus enforces unanimous agreement among the blockchain stakeholders that a transaction is valid. In the absence of consensus, the transaction is nullified. Additionally, provenance allows all members of the blockchain to see where a certain piece of information originated, allowing for full transparency. Immutability refers to the fixed nature of the ledger; once a piece of data has been recorded, it cannot be edited retroactively. Immutability, combined with consensus, provides a single source of truth for all parties involved, also known as finality.
Cost reduction occurs mainly through the reduction of administrative overhead and the elimination of intermediaries. Smart contracts, another important part of the blockchain, help to reduce costs dramatically among network members. The reconciliation process between services rendered and the amount charged is often costly and labor-intensive. However, the blockchain’s ability to create a single source of truth combined with smart contracts virtually eliminate these administrative costs.
The amounts paid to payment processing intermediaries can also be broadly reduced. The extent to which this is possible will be largely determined by the number of intermediaries that each stakeholder works with. However, many, if not most, costs imposed by intermediaries can be reduced or eliminated with smart contracts and blockchain technology.
Increased transparency helps solve fraud elimination, cost reduction, and a number of other problems common to marketing and advertising. Blockchain technology allows for a maximal degree of transparency among the different parties of a blockchain. This transparency helps companies lower costs as well as ensure a degree of fairness and accountability that was previously impossible.
Financial transparency is a crucial advantage that blockchain technology can bring to bear on the advertising and marketing industries. Blockchain allows companies to see exactly which intermediaries are profiting and how much they are profiting. All of the stakeholders on the blockchain are aware (or at least can be aware) of how the different transactions are affecting them.
The advent of digital marketing has increased the potential for transparency within advertising when compared to more traditional marketing methods. First, images used in advertisements can be automatically checked for copyright infringement to avoid any future legal hassles. Supply chain transparency also ensures that advertisement delivery actually occurs in the correct spots. Additionally, supply chain transparency allows companies to track and verify bids, impressions, and the impact on performance. Currently, many platforms that allow advertising work within privileged data repositories called “walled gardens.” Purchasing companies must trust that the platform providing the advertisement service is fulfilling its obligations. Blockchain technology allows for full transparency and the elimination of trust-based systems.
Poste Italiane is one business that integrated blockchain technology into its marketing plan with a blockchain-based rewards program. The Italian postal service functions much more like Amazon — a one-stop shop for nearly everything — than just a traditional courier service like the USPS. With one foot in eCommerce, Poste Italiane was able to create a program that rewarded loyalty with logistics. Companies are able to use Poste Italiane’s program and gain a more consistent customer base by offering rewards through the platform. Additionally, customers get cheaper shipping options and cheaper products. Poste Italiane, for its part, is able to achieve an industry-leading customer retention rate.
The blockchain technology employed by Poste Italiane allows individuals and businesses to track their reward status in a decentralized and distributed manner. The technology also allows companies to understand who their customer base is and advertise and market directly to them.
As blockchain technology grows and matures, more industries are finding a valuable asset in the technology. Advertising and marketing is only one of many more industries that already benefit enormously from blockchain technology. The true power of blockchain technology will be released when it is vertically integrated and ubiquitous across business activities. Companies that use blockchain for supply chain management, manufacturing, and payment processing, in addition to marketing and advertising, will find themselves occupying a uniquely efficient and profitable space.
The ideas, technologies, and uses that undergird blockchain technology can be complex, and proper education is crucial to understanding it. The Wharton School created the Economics of Blockchain and Digital Assets course to help financial professionals navigate the new environment created by blockchain. The blockchain certification course features more than 80 videos, seven industry-leading case studies, three crypto valuation models, and more. For more information on the program or to enroll, visit our information page to learn more.
This article is for marketing purposes only and does not intend to represent the opinions of the program.
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