How Blockchain Tech Will Disrupt the Digital Marketing Industry

If you’ve had any sort of insight into tech over the past year, you’ve probably heard of blockchain technology. If you don’t know, blockchain powers Bitcoin, but it is not Bitcoin, nor is it strictly related to currency. Its explosive growth has lead people to start thinking about using the technology in new, and unique ways. To understand how this new tech will impact and disrupt digital marketing, it’s important to understand what blockchain is.

What is Blockchain?

Blockchain is a “distributed ledger that can record transactions between two parties efficiently, and in a verifiable permanent way.” In other words, it places all transactions within a decentralized database in a series of “data blocks” that cannot be altered or changed in anyway (i.e., immutable). Over time, as the number of transactions grows, so will the blockchain.

In today’s world, all records are kept in centralized databases that only a few select people or organizations have access to. Due to this, people need to be able to trust the central authority that the databases are of maximum integrity and will not be mishandled in any way. However, the recent Equifax debacle has shown that centralized systems cannot be trusted.

By placing these transactions within the blockchain, it will essentially create a “trustless” system through encryption, thus eliminating the need for middlemen and organizations like Equifax, thus improving efficiency and security. Although data, like ads, become “public” on the blockchain, they are still hidden (i.e., encrypted) and represented by a series of numbers and letters (e.g., 0xjd725bfkk2tf3hb599g). Exactly how a decentralized system like blockchain can help improve security and efficiency without a middleman is a bit beyond the scope of this post, but if you’re interested simply do a Google search for “blockchain security.”

To understand why this is so impactful, let’s take the example of organic foods. As it stands today, any company can label a food as “organic” but this may not actually be the case. In the end, the consumer will never know the difference. If blockchain is used in the supply chain for organic food, the entire history of every specific food, from the farmer who planted to seeds to the supermarket it ends up in, is entirely visible to everyone. Therefore, we as consumers will know with certainty if a food is organic or not.

Application to Digital Marketing

If you’re at all familiar with the current digital marketing ecosystem, you’ve probably seen the infographic below:


Digital Marketing Ecosystem


That’s a lot of middlemen. And for every middleman that an advertisement must go through to reach the target audience, there is a slice of the ad budget taken out for each of them. In other words, you’re only able to spend about 50% of an ad budget on the target. The rest is used to pay these middlemen. Unfortunately, exactly how much is not transparent to the advertiser. Not only that, there is rampant fraud within the digital marketing industry due to bots. In 2017 alone, losses due to bot fraud reached $6.5 billion globally.

Finally, there is an exponential rise in people using ad blockers due to being served “annoying” or “irrelevant” ads ruining the user experience. In 2016, 615 million devices had some sort of ad blocking software installed on browsers. This number is expected to increase as people become more aware of ad blockers and as the tech savvy population continues to grow. However, despite these negatives, digital advertising remains one of the best (if not the best) ways to reach a target market for any business or industry.

One idea that is currently being developed is monetizing the sole resource users provide to view ads: their attention. There are several companies looking to do this, but Brave/BAT (Basic Attention Token) is the current leader for this unique model.

The gist is that users will choose to opt into being advertised to through the privacy-focused Brave browser, and the compensation for doing so is BAT, which is a token (i.e., cryptocurrency) built on the Ethereum blockchain. Users generate BAT as they view ads and can use BAT to pay publishers for premium content and services (or cash out into fiat currency). Users can also “tip” publishers who are opted into the BAT network. Publishers can not only gain BAT from tips, but also for serving ads through their website. The thought is that BAT has value because people’s attention and time has value. Also, ads can be better targeted without releasing people’s valuable data, since data will be kept strictly within the browser/device itself vs. shared with advertisers.

The use of blockchain will allow for unique identification of individuals, while preserving personal identities, through encryption, thus ensuring no bot fraud. Additionally, by placing ads on the blockchain itself, these ads can be served directly to users, which eliminates the need for middlemen. Finally, by offering a system of compensation through a token valued by a user’s attention, ad blocking should theoretically decrease.

Whether or not Brave/BAT or other related digital marketing blockchain tech takes off is yet to be determined (Brave/BAT is currently live and in use, however). One thing is for sure though: blockchain is here to stay and will eventually replace the current digital marketing ecosystem, which is riddled with inefficiencies and fraud. This is a good thing for everyone involved; as ad quality is forced to improve, users get compensated for their attention, and publishers generate more revenue, thus improving the quality of publishers’ content.


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