The Impact of Cryptocurrency on Digital Marketing
- September 2, 2019
- Posted by: admin
- Category: Business & Digital Marketing Tips
Bitcoin was the dawn of all cryptocurrencies. It started everything and has evolved a lot since then. It’s much easier to buy and sell nowadays and it’s not limited to the United States anymore. You can buy bitcoin in India, the Philippines, Venezuela—almost everywhere in the world now.
Cryptocurrency has affected a lot—investment, finances, and even healthcare. One thing you didn’t know it affected was digital marketing. The e-commerce industry, as of this moment, is taking off and people are buying and selling goods on the internet constantly.
Platforms like eBay help the e-commerce cause and earn their profit by charging fees to the buyers and sellers who use the platform. In most cases, bank accounts of both the buyer and seller are used to verify transactions. They also confirm that the buyer and seller are both real people and that they exist.
When cryptocurrencies are injected into this equation, the middleman is completely removed. Transactions are possible without a third-party marketplace and it doesn’t require the need for a bank account—eliminating most transaction fees in the process.
Even international purchases, which often include extra fees and longer waiting periods, are made more cost-efficient with the use of cryptocurrencies.
Digital marketing and the effect of cryptocurrency
In its current situation, digital marketing happens mostly via third parties. Marketers need help from these third parties to handle advertisements and make transactions. Let’s break it down.
There are four major players in the digital marketing industry right now: the user (you), the published (content creators), advertisers (companies trying to promote their goods), and the platform (Facebook, YouTube, etc.)
If an advertiser wants to target a specific audience, they’ll look for the right publisher and strike a deal that would let them advertise on their channel.
Let’s use YouTube as an example.
Pewdiepie is the biggest personality on YouTube, with over 100 million subscribers. Before watching a video, an ad will usually appear—sometimes hitting the same market as Pewdiepie whether that be games, internet pop culture, etc.
In this case, you’re the user, Pewdiepie is the publisher, the sponsored ad is from the advertiser, and YouTube is the platform.
In this example, the advertiser is selling their product by giving a commission to the publisher—giving the advertiser the power to reach the market of the publisher.
If blockchain were integrated into this process, the system would change dramatically and it would affect many other things as well.
First of all, it would mean more anonymity for users. As made famous by the Facebook incident—Mark Zuckerberg, the founder of Facebook, went to trial for being accused of selling private data to Cambridge Analytica—there are multiple cases where platforms are using private data without the user’s consent. This data is often used by advertisers to target specific audiences. There were many cases like this but if blockchain were to be integrated, it would protect the users more as data wouldn’t be as public.
Next, having blockchain integrated into the system could incentivize the users to actually watch the advertisements. There could be systems in place to reward users for watching the whole advertisement (but more on this later).
Lastly, the publishers would evenly be compensated for their work. You’d be surprised to know how little publishers actually receive when they allow advertisers to promote a product.
In most cases, the platform can get a little stingy and keep most of the royalties. For example, Pewdiepie works hard every day and has released a single video every day for years now. That’s a lot of hard work and it has paid off in the sense that he has the most popular YouTube channel in the world. It was reported that he made $15 million in 2016 and $12 million in 2017.
Although it’s still a lot of money, imagine if he just got 50 cents per subscriber—with his 100 million subscribers now, he’d make over $50 million USD.
Another example of this was Luis Fonsi’s “Despacito”, one of YouTube’s most viewed videos. Despite it having over 6 billion views (for comparison, the world population as of April 2019 is 7.7 billion), it only made $3.2 million from YouTube (as of September 2017).
With cryptocurrency now in the mix, advertisers are starting to do things a little bit differently. An example of good digital marketing with cryptocurrency is the marketing that cryptocurrency exchanges do.
Basic Attention Token (BAT)
With all that being said, the perfect example of cryptocurrency-infused digital marketing is the Basic Attention Token (BAT).
BAT is a digital advertising token which is built on the Ethereum blockchain. The purpose of the token is to create an ad exchange which will connect advertisers, publishers, and users in a decentralized manner as well as to monetize user attention and remove all other needless expenditure related to ad networks.
Through the use of this token, all parties are rewarded: users are paid for their attention, publishers get a fair portion of the ad revenue, and advertisers get a better return of investment for their content.
This token, along with its own native web browser “Brave”, is a new breed of digital marketing.
The effect of social media on cryptocurrency
Just as cryptocurrency affects digital marketing, as well as their social media aspects, will continue to influence the future of cryptocurrency. Despite the digital marketing system being a little broken at the moment, there is a future for cryptocurrency in digital marketing and BAT is the perfect example of that.
Integrating blockchain into this system not only decentralizes it, but it also allows cryptocurrency to be more than just about the specific coin value. It allows it to be more about utility and how cryptocurrency can help social good.
Although there are many real-use cases for cryptocurrency right now, this can soon develop into another real-use case that can help people all over the world.