Influencer marketing is a popular digital marketing tactic. Yet, as effective as it is, there can be issues. Verifying authenticity of followers can prove difficult. Understanding how to set prices and determine ROI has proven to be challenging. Plus, with so many moving parts, influencer marketing is time-consuming to manage. Blockchain technology can help address many of these concerns.
What is Blockchain?
Perhaps you’ve heard of Bitcoin and like me, watched the documentary “Banking on Bitcoin” on Netflix. This digital currency, though, is only part of the blockchain. All kinds of transactions can be requested, validated, verified, and added to the digital ledger of the blockchain.
According to Alex Nascimento, co-founder and faculty of the UCLA Blockchain Lab, “The benefits of blockchain are the use of this decentralized, immutable and transparent new form of database to mainly eliminate the need of a middleman in any transaction where parties don’t fully trust each other.”
Blockchain’s benefits include:
- Data isn’t stored in any single location
- Records are public and easily verifiable
- No one centralized version for a hacker to corrupt
4 Ways Blockchain will Impact Influencer Marketing
The main use of blockchain today is in finance with blockchain enabling transactions without a middleman. The technology is often supported by identity management processes, which can help users preserve their online identity from theft. But, how will blockchain make a difference in influencer marketing? Here are four ideas.
- Payment Facilitation. Blockchain’s decentralization enables transactions without paying fees to financial institutions. A large brand with relationships with many different micro-influencers could save marketing budget dollars by doing its business interaction with the influencers directly through blockchain. This is especially helpful when dealing with influencers all over the globe. Since brands are always looking for influencers who often represent themselves (i.e. they don’t come packaged with media buying firms), the ease of transferring money reliably via blockchain will have advantages for both brand and influencer.
- Smart Contracts. Smart contracts are simple contracts coded to execute when specific conditions are met. A brand, therefore, can program all of its influencers’ contracts to respond to specific targets without having to monitor each one individually. When the benchmark is met, the influencer is paid with blockchain technology automating the payout. For instance, a specific hashtag being shared X number of times triggers a payment.
- Validates Identity. Dealing with social media influencers potentially opens a brand up to interactions with a host of individuals worldwide, yet blockchain technology offers enhanced reassurance that people are who they say they are. With blockchain’s digital identity standards, your marketing team can enjoy greater confidence in not only the online interactions but the actual identity and reputation of your influencers.
- Private File Sharing. Your marketing team also might benefit from the decentralized file storage of the blockchain. Without the need for centralized client-server relationships (as on the traditional web), brands can distribute information to influencers on protected networks that are convenient and quick. As a result, no matter where the influencer is located, the brand can share streaming content or files without adding the concerns of proprietary data being easily accessible on the web.
As ad dollars move to influencers, its wise for marketers to understand how to leverage Blockchain technology in their marketing efforts.