Consumer Trust: Three Ways Blockchain Technology Can Build It
Updated: Sep 17, 2020
Future technologies have always had excitement and intrigue, but nothing has hit the global landscape like cryptocurrency and blockchain. From celebrities promoting ICOs to bitcoin’s value soaring to over $20,000 to Facebook and Amazon investing in a future involving blockchain, it’s time for marketers to understand how the decentralized financial internet enabled by blockchain technology can help build consumer trust.
At RampUp, the conversation on “How Blockchain Can Save Programmatic Media” had a packed room, and rightfully so. Blockchain has created a new ecosystem that will—and already does—affect the media and marketing space. The way that blockchain technology distributes and tracks money and information will enable a more transparent business landscape, building consumer trust. Startups and large companies alike are investing in blockchain because they want to use its secure technology and record for transactions to provide more value to their customers. In turn, customers feel empowered because they can get paid in real time for their actions including sharing data, connecting with brands, and creating valuable influencer content.
Here are three ways that blockchain technology will impact marketing, advertising, and consumer trust.
1. Advertising will be more targeted with user provided data
Data helps companies make informed decisions that can affect their bottom line. The current business model relies on data captured from user behavior, both offline and online, resulting in display ads, banner ads, and social media advertising that many times fails to entice the consumer. However, with blockchain enabling users to provide and be compensated for their own data, advertising then builds consumer trust and then can become much more targeted and change the customer’s overall experience.
Datum, the data marketplace powered by blockchain technology, focuses on acquiring data from social media, wearables, smart home appliances, and other IoT-connected devices as a way to create more informed advertising. With Datum, users are compensated for their data submissions. The data lives in Datum’s distributed storage infrastructure, where the company states “all data is encrypted in the app before it’s sent to the network.” This incentivizes users to share more content in hopes that they’ll receive compensation and more relevant advertising. This may incentivize an Instagram user who loves the outdoors to post more content related to camping because they can directly sell their data to retailers they already frequent and be compensated for it, as well as, receive more relevant ads. With this vast amount of information acquired through the blockchain, Datum can provide marketers with more targeted results, including stronger lookalike audiences that marketers can purchase. In doing so, marketers will be able to increase conversion rates and brand affinity due to building consumer trust with a better, data-rich knowledge base.
2. Transform consumer behavior to build communities
Beyond creating and sending better advertising, companies can build consumer trust and stronger relationships by using blockchain technology to reward them in real-time. Historically, it’s been difficult for companies to incentivize their communities to take action beyond brand messaging and marketing campaigns. Blockchain makes it easier for brands to compensate consumers directly and thus easier to reward them for taking a desired action.
Take the case of Clinicoin, a health and wellness blockchain platform, open-source technology, and token system that rewards people for participating in healthy activities. Additionally, they can participate in “token distributed events,” where doctors, researchers, and health organizations reward them for tasks such as completing surveys or taking their medicine. With the rise of the token economy—an economy based on digital tokens used by participants who have agreed to a set of rules governing usage—consumer trust then grows as brands and consumers build stronger relationships.
3. Influencers will have true impact
Influencer marketing is poised to become a $10 billion market by 2020, and blockchain technology can make it grow even bigger and faster. Currently, influencers gain reach from follower count and engagement on walled platforms such as Instagram, Snapchat, and YouTube, and require hiring agency staff or managers to actually become successful. With this high-entry to market, it’s easy to see how blockchain will disrupt influencer marketing.
Influencer marketing companies like Creator.ai are building their own blockchain-based platforms, focused on price transparency, programmatic trust, and connecting influencers globally. By creating smart, digitized contracts—which Accenture defines as “contracts that are put on a shared blockchain database that every party can use to securely view contracts and revise and accept changes”—and using token systems to connect marketers with content creators, Creator.ai enables anyone to become an influencer. More importantly, those with the best content will be rewarded in real-time by a crowd-sourced audience.
Marketers and brands will be thrilled with the creators they invest their money in, as they’ll be confident in a high ROI. With blockchain technology, it’s not the people using bots or gaming the system to scale who will succeed. Only the influencers who create the best content will come out on top, allowing for more consumer trust in the influencer marketing ecosystem.
Chelsea Rustrum, co-founder of blox7.com and founder of blockchainforgood.us, provides an example of this in the livestreaming space. She explains, “Utopi.io is reimagining livestreaming with user-generated content and blockchain technology. The platform will enable anyone to open a stream and associate it with a cause. This will not only make live streaming more social and fun but also revamp the way we do philanthropy.” Utop.io’s use of blockchain empowers people to become influencers for causes they believe in and offers consumers greater transparency over where their donation is going. This latter point can potentially minimize improper allocations of funds, which occurred with donations to Haiti in the wake of its 2010 earthquake.
Restoring consumer trust
With blockchain and the token economy, advertising and marketing is going to naturally evolve. The increase of personalized, historical data, incentives and rewards for consumers, and smart digital contracts will create a new type of marketing ecosystem that is based on value exchange and consumer trust.
In March of this year, venture capital investment in blockchain technologies had already reached 40% of 2017’s total investment. IDC forecast that global spending on blockchain solutions would reach $2.1 billion by the end of 2018, and $9.7 billion by 2021. The current investment trend favors blockchain as the future, creating a new foundation for our economic, health, and social systems.