Ok, now that I have your attention, I never really understood why cryptocurrencies, which are merely a branch of blockchain seem to enjoy far greater fame than the technology propelling it. Surely, the promise of a quick profit seems enticing but how many of us really understand the foundation of blockchain? To most, blockchain is still perceived as a fairly technical term and the only thing we seem to understand is that those who had something called bitcoins a couple of years back have made an obscene amount of profit! But does this mean blockchain is always destined to be that unpopular second-step cousin of crypto?
Blockchain Economic Forum 2018
I recently had the pleasure of meeting the LAToken team and several other Blockchain startups at the Blockchain economic forum in Singapore. This forum was an amazing opportunity network and learn from the best in the industry. From Cashbet, Arsenal’s official cryptocurrency partner to Nicholas Merten, DataDash’s young and inspiring founder, it was refreshing to meet a crowd that was more interested in the potential of blockchain than the ever-volatile prices of cryptocurrencies.
Blockchain and Influencer Marketing
Amongst the various applications of blockchain presented in the forum, I had an eye out for influencer marketing because I believe it is a powerful channel for brands to leverage and achieve greater brand awareness. I am still amazed at the fact that influencer marketing is probably the oldest form of marketing present. Even though it went under a few iterations from word of mouth, to blogging and finally via social media platforms like Instagram, it is probably still the strongest channel for brands to leverage.
Despite this potential, influencer marketing still seems to suffer from a cloud of uncertainty due to ad fraud and probably other questionable practices by influencers, brands and even agencies. Perhaps blockchain is the final piece of the puzzle that finally makes the influencer marketing industry whole?
Issues in Influencer Marketing
As of now, Instagram is still growing with astronomical speed. With over 800 Million users overall and a $4 billion in revenue in 2017, current predictions place Instagram ad revenue to be over $10 billion by 2019. The problem, however, is that as the go-to platform for influencer marketing, Instagram is somewhat disproportionately defining the entire influencer marketing industry.
It is clear that influencers with a higher reach earn top bucks for their posts while influencers in the second or third tiers would earn far lesser. Unsurprisingly, defining influencers by micro, macro or celebrities is still pretty much a common yet antiquated way of selecting influencers. Choosing the right influencer is not about them or the brand as much as the fit between the influencer and the brand. Sometimes hiring 100 micro influencers would be more effective than hiring 1 macro influencer. Likewise, sometimes hiring one celebrity would be more effective than hiring 10 macro influencers. It all depends on the fit between the brand, product, and the influencer.
So how does blockchain fit in?
Blockchain could be used in several ways to disrupt the influencer marketing industry. It could:
1. Make payments seamless
Let’s say you launch a global influencer marketing campaign, how will you transfer the payment to influencers all over the world? Payment conditions vary from country to country and there is always paperwork associated with the transfer of funds cross-border. Blockchain makes it easy to pay for service no matter where the influencer is located. Blockchain technology makes transactions fast, simple and 100% secure. In addition, an absence of intermediaries will reduce the total cost of a transfer and both influencers and the advertisers could gain profit without worrying about the process of payment.
2. Eliminate fraud
When it comes to influencer marketing, there are currently no real standards to classify the effectiveness of an influencer campaign. Which KPIs will we track? Will we use reach or conversions? It’s hard to track and analyze if a particular commitment has been fulfilled. On the other hand, influencers are also unable to guarantee KPIs that matter to brands. In short, there is no credible way to track results from campaigns other than the use of antiquated discount coupon codes. This great chasm of doubt and insecurity ruin the opportunity to build trustless and reliable interconnections between publishers and brands.
Blockchain technology and smart contracts can also help address the problem of ad fraud. Conditions agreeable by both parties are set at the very beginning of the negotiation. There is no need for additional interference after the agreement has been set and this contract can no longer be amended by either party and is totally immutable. The result?
When an influencer fulfills their obligations, a payment is made automatically.
3. Lift accessibility
Currently, most сompanies with limited marketing budgets have very little opportunity to jump on the influencer marketing bandwagon. The current high-risk and unpredictable environment pose high barriers of entry to using the most popular and probably effective marketing trend. The same goes for influencers who only have a minor yet niche following. These micro influencers are often either overlooked or lack the bargaining power to negotiate with brands.
A solution to payment and security problems will provide so much more opportunities for micro-campaigns to be rolled out. Both small companies and micro influencers could start capitalizing on this change and be part of the influencer marketing community without resorting to bots or any other misguided attempt to boost followers.
But is it ready?
The above-mentioned list is not exhaustive. While the applications of blockchain are endless, the technology is still pretty much at its infancy. It still requires a sizeable amount of capital, research, and commitment from its community. In time blockchain will be able to:
- Give nano-influencers a fighting chance to prove that engagement beats reach.
- Help brands scale their social reach by engaging micro and nano influencers.
- Securely tag images to ensure fair use of intellectual property on social media.
- Simplify payments for influencers spread across the world.
- Ensure bots don’t inflate key metrics like impressions or engagement.
- Incentivise people to post authentic content inline with campaign branding.
In short, blockchain has the potential to plug holes that are currently damaging the industry.
What about now?
As of now, there are still so many problems that can’t be solved by blockchain alone. Brands need to make the most of the tools that are available to them. While it will still take a couple of years for blockchain to mature and yield tangible results at scale, brands can always count on specialized platforms to step in. These platforms will help simplify the maintenance of influencer advertising campaigns and provide a complex set of tracking tools to resolve the current issues that plague influencer marketing agency. It will be interesting to see how advanced analytics platforms like these evolve to cope with the change blockchain brings.