How Blockchain Marketing Approach Differs From Traditional Industries

Blockchain technology is one of the most innovative new technologies of the 21st century. Initially emerging in 2009 with the launch of Bitcoin (BTC), blockchain technology now reaches a wide range of industries globally. 

It is worth mentioning that the second-biggest blockchain-related breakthrough so far happened in 2015 with the launch of Ethereum (ETH). Ethereum revealed that blockchain can also record code, which means that it can be used as a development platform. This allowed it to launch numerous groundbreaking products, including smart contracts, decentralized applications (dApps), decentralized finance (DeFi) protocols, metaverses, non-fungible tokens (NFTs), and more. 

The new game-changing functionalities introduced by Ethereum attracted a wave of interest in the niche fueling a new era of marketing – blockchain marketing.

Benefits of Blockchain Marketing

Blockchain technology’s intention is to engage and improve other industries in any way it can. For finance, this meant offering faster, low-cost payments. For the data industry, it means offering large storage space coupled with immutability and ways to prove ownership or legitimacy of the information easily. In a similar way, this technology brought its own unique spin to marketing, as well. 

Blockchain offers benefits like:

• Enhanced data security and privacy: Blockchain technology is decentralized, which means no single central authority manages it. Its security comes from the fact that its network is run by numerous individuals worldwide. As such, it offers enhanced data security and also increased privacy. Data cannot be altered, stolen, or misused, as its ownership is quite easy to prove;
• Increased transparency: Transparency is another highly valued attribute of blockchain technology, as it allows anyone to monitor blockchain activities. This can be useful for brands that seek to prove their legitimacy, and show how the funds are being used;
• Better tracking of ad spending: Thanks to the increased transparency mentioned earlier, blockchain allows for easy tracking of ad spending. Blockchain was initially created to serve as a distributed ledger that records transactions chronologically, making this data immutable. That way, it has the potential to eliminate issues like corruption, but also it helps businesses with keeping track of their spending;
• Elimination of intermediaries: One of the biggest changes blockchain has brought to the advertising world is eliminating intermediaries. By using the blockchain, brands can directly advertise to their intended customers instead of paying a small fortune to advertising companies. This way, brands can advertise to people who are actually interested in their product, while advertising firms have mixed levels of success;
• Improved customer engagement: Another benefit is improved customer engagement, as it allows brands to get feedback from their customers directly and improve their businesses by analyzing it. ;

Challenges of Blockchain Marketing

Blockchain marketing does not come without its challenges, some of which can be difficult to deal with for those with a traditional marketing mindset. For example:

• Blockchain is still a relatively young technology: Of course, blockchain marketing — just like blockchain itself — is still quite new and not even out of its infancy. It has been around for a little over 14 years as of 2023, but that is barely any time for a brand-new technology of this scale. Blockchain is still developing, constantly changing, going down new paths, and growing simultaneously in different directions. It is still trying to find itself and discover the limits of what it can and can’t do;

• Blockchain is evolving all the time: This is also one of the biggest challenges in blockchain marketing — the ever-changing nature of blockchain technology. Due to its constant evolution, and the fact that blockchain marketing prefers long-term campaigns, it is easy for trends to shift in the middle of a campaign. The old project might be considered outdated at that time, and it might need to change, give up, or try to stick to the original plan with an uncertain future;

• A new approach: Blockchain marketing’s goal is to build a community around a project rather than sell a product itself. Once the community is formed, its interactions with the project require the use of the product, which is its native cryptocurrency. It is a strange field of marketing, which can feel quite unfamiliar at first;

Use Cases for Blockchain Marketing

Despite the challenges that blockchain marketing is facing, the community is still managing to make it work. This led to a number of applications of blockchain marketing, such as:

• Reddit promotions: Reddit is one of the largest social platforms used by the cryptocurrency industry. It is also free, open, and visited by dozens of millions of daily users. It is a place where people go to ask questions, provide answers, comment on trends, and more. As such, it is a perfect place for blockchain marketing, where projects can reach mass exposure in some of the biggest crypto subreddits; 

• Twitter spaces AMAs: Apart from Reddit, Twitter is also known for its massive crypto community. In fact, many use crypto mentions on Twitter as one of the aspects of their fundamental analysis. After it added its Twitter Spaces, the platform has seen a lot of AMAs conducted by crypto projects, where their executives answered community questions, explained their projects in greater detail, and simply made their cases in a non-written form;

• Podcasts: Similar to Twitter Spaces AMAs, specialized podcasts focus heavily on crypto projects. By joining one of them as a guest, a blockchain project founder can talk about their ideas, goals, and alike with a professional host who knows how to ask the right questions and make these interviews valuable and informative;

• 4chan: 4chan is the forum of all forums — a massive community of people interested in various topics, including cryptocurrency. The platform might be a rough place to hang out in and it has a strong reputation. However, since its members tend to be quite interested in cryptocurrencies, anyone who wishes to promote their project must go where potential community members hang out;

• Discord: Discord has grown a lot as a social platform over the years, allowing like-minded individuals to join servers dedicated to specific topics and form communities. Discord is generally more organized than subreddits, and it tends to be friendlier than 4chan, offering an opportunity for project leaders to regularly update their community, hold events such as AMAs in voice chats, and offer a place where the community can offer ideas, feedback, and more;

• Influencer marketing: One of the best ways to promote new technologies and services is to have influential people publicly support them. This has been a tactic of traditional marketing for a long time, where celebrities promoted new products in traditional commercials. With the rise of social networks and social media influencers, blockchain projects have been known to use major Twitter personalities, YouTubers, and even TikTok creators as their promoters. Of course, celebrities were included in various projects, as well, although this often led to conflicts with financial regulators;

• Affiliate Marketing: Affiliate marketing has also been known to be effective, which is why it is being used in almost every domain. It can introduce cryptocurrencies as a method of payment, simplify transactions, and alike. Plus, brands can see how effective affiliate marketing has been thanks to transparency and immutability;

• Targeted Advertising: Blockchain’s transparency can be extremely helpful when it comes to targeted advertising. In traditional marketing, companies have to spend a fortune to procure data, process it, analyze it, and then engage in targeted advertising. Blockchain eliminates a major portion of the process. By developing their own token, brands can offer it as a payment method, which is only used when an advertisement finds its targeted customers, and they start interacting with it;

• Loyalty Programs: The purpose of loyalty programs is to reward loyalty, but in traditional marketing, this does not always go as planned. In order to encourage spending, brands offer loyalty points in exchange for engagement. However, the consumers either do not spend enough to earn these points or they end up not using them. With blockchain marketing, multiple brands can form an alliance and use a common reward points system, which would reward users in a joint cryptocurrency or in a similar way. This would both encourage spending and make it rewarding for the user;

• Preventing ad fraud: Unfortunately, fraud reaches far, and fraudulent advertising has been a major issue in traditional marketing. However, this is eliminated in blockchain by allowing brands to communicate with consumers directly. This cuts out the middleman, which is where the majority of fraud comes from. Consumers know that the advertisement comes from a brand they trust, and the brand’s reputation is safe as no one can impersonate it for malicious purposes;

Conclusion

Although still in its infancy, blockchain marketing has already demonstrated its potential to greatly enhance traditional marketing practices. 

Despite facing its own challenges that require resolution, this disruptive technology offers clear benefits that cannot be ignored. As the industry matures, solutions will arise for the current issues, potentially surpassing the effectiveness of traditional marketing methods. 

In light of this, embracing blockchain marketing now, or at least exploring its potential, can provide a significant competitive advantage in the future.