What if businesses use blockchain to gather customer data and use these data to develop stronger and more relevant advertising campaigns? This would be a possible scenario.
As we all know blockchain technology is a decentralized and distributed ledger that is used to record transactions across multiple networks. This means that capturing customer’s data is possible using this technology.
Would this be a threat to a consumer’s privacy? Great question, according to experts this will not pose an issue of privacy breach. In fact, this would be a great opportunity to streamline advertising campaigns to the needs of the customers making it a fruitful digital communication between the customer and provider.
What Does Blockchain Tech Mean in the Big Data-Fueled Digital Economy?
The current online economy is largely driven by advertising.
Nearly every company with an online presence, from small businesses to digital giants, collects data about consumer behaviors in order to target those consumers with advertisements. Some may see this as a breach of privacy; but for most, the ease of communication and information exchange facilitated by the internet is too great of a benefit to give up. But what if we didn’t have to sacrifice privacy for all that the world wide web has to offer?
Blockchain technology could enable such a future. Like the internet, blockchains are essentially communication networks, except they are distributed across many users, or nodes. Every transaction that occurs on the blockchain must be validated by a majority of the nodes, which makes the technology nearly tamper-proof and ideal for tracking the exchange of data and value.
Currently, Amazon, Google, Facebook and thousands of other businesses are profiting from consumer data and there is very little that individuals can do about it. Technically, you could decide to stop all Amazon purchases, Google searches, social media posts, emails and essentially give up all use of the web; but in today’s digital economy, this would be akin to living in a cave. Fortunately, there may be a middle ground between zero privacy and hermitism.
Imagine if brands and companies had to ask permission to use your data. Perhaps there are some things you wouldn’t mind companies knowing.
The blockchain-backed Brave browser shifts power into the hands of consumers by enabling them to determine which entities can access their data. Consumers using Brave pay publishers directly in exchange for a more private, ad-free experience . Brave’s micropayments are processed on a system of smart contracts that operate on an “if/then” logic: if a user visits a site, then a micro-payment is subtracted from their digital wallet according to the user’s manually selected preferences.
Though Brave depends on consumer donations to publishers, it’s not far-fetched to envision a future where consumers are rewarded by advertisers for sharing their data. Already some companies are offering variations of the rewards-for-data premise. Users of the Datacoup marketplace can make $8 per month in exchange for allowing access to their social media accounts, which are then aggregated into trends and purchased by advertisers. Datacoup is not backed by distributed ledger technology, but other companies, such as Hitachi and Deloitte , recognize the security and tracking advantages afforded by blockchains for consumer reward programs.
The implementation of blockchain technology also greatly benefits advertisers by smoothing communications between brands and publishers and decreasing fraudulent behavior.
According to the Interactive Advertising Bureau’s report on the cost of trust, the advertising industry loses $8.2 billion per year to bots, ad-blocking and stolen content.
Ideally, ads appear to relevant audiences on websites whose content matches the brands’ values. Regrettably, this doesn’t always occur. In the current advertising ecosystem, brands have little control over where and to whom their ads are served.
For example, when an internet user clicks on a pair of shoes, that shoe advertisement will follow that user’s IP address to other websites, even if those sites contain offensive material such as pornography or terrorist-related content. The advertiser, recognizing the IP address, pays the publisher to serve the ad and inadvertently funds an organization whose values do not align with its own. Some publishers and advertisers are already taking steps to actualize a blockchain-backed network for the advertising ecosystem, including groups such as the AdLedger Consortium , whose purpose is to bring transparency and security to the ad tech supply chain.
Endowing both consumers and advertisers with greater control over their own data is a win-win. Consumers are able to protect their privacy and potentially earn rewards for sharing limited data, while advertisers are able to increase their return on investment (ROI) and safeguard their brand values.