Without providing more interactive experiences to customers by using blockchain technologies, it may no longer be enough to sustain the benefits achieved through brand awareness and brand equity created (Boukis 311). With the spread of web3 and blockchain technologies, this study aims to facilitate the adaptation process of companies in need of marketing and to guide them in the transition from web2 to web3. In the research, after examining today’s marketing industry and the most common types of marketing techniques, the changes that will occur with decentralized marketing techniques will be mentioned and the future ownership of the data called “big data,” which is currently controlled by companies such as Facebook and Google, will be examined.

Keywords:

Blockchain marketing, web3 marketing, decentralized marketing, NFT, non-fungible token, big data, digital marketing, outbound, marketing, inbound marketing, decentralized, and hybrid marketing.

Introduction

One of the first things that come to mind when it comes to marketing is competition between companies. The goal is always to be better than the others and generate more sales or leads. In the traditional marketing and web1 era, this was mostly implemented as the consumption of information provided by companies, but with the transition to web2 in the 1990s, marketing evolved into a different dimension. New marketing techniques began to emerge as more successful inbound marketing techniques than traditional outbound marketing techniques. At the same time, web2 allowed users to establish an interactive relationship with the brands they like. With the spread of social media, this relationship has completely turned into a relationship of interest and the personal information of people has been hijacked in return for free services. The owners of such platforms, who play the middleman between the advertiser and the consumer, made huge profits from this system. According to Ertemel, all middlemen, also known as trusted third parties, are expected to become obsolete as a result of blockchain technology. This includes Google and Facebook and other major technological organizations. They store and commercialize customers’ data as trusted third parties. Although customers are used to this situation, it is illogical if they do not own their personal information (35). As also mentioned by Ertemel, this system could not continue indefinitely, as the consumer who had the real power, namely the money, could not go beyond being a marketing tool in this system and never became the focus of the marketing effort. The most valuable personal information of the consumers was taken, and a service or product was shown to the consumer by using this information. Simply, the system charged the consumer to see the ads which he hated. Web3, which is built on the blockchain eco-system, is coming to stop the intermediary companies from extorting the advertisers’ budgets and giving the consumer the value they deserve. It seems a little difficult to return to the world of web2 after all the benefits provided to those who hold the real power, even if they are not aware of it.

While a lot of research has been done on blockchain and the new technologies that blockchain brings, very little research has been done on what will happen in the transition period. In this literature review, while these inevitable changes are experienced, how the marketing sector will adapt to it, the changes that will occur in data ownership and the marketing techniques that can be applied in this change process will be examined. Overall, this literature review resulted in more than 100 academic articles, journals, and books published in 2015 and beyond, and only 14 of them were found relevant after they all had an initial review. The keywords and keyword combinations “digital marketing AND NFT OR non-fungible token”, “digital marketing AND blockchain OR web3 OR decentralized”, and “marketing AND inbound AND outbound”, were used to search for related articles, and most results are from the ProQuest database.

The Evolution of Marketing Towards a Decentralized World

Marketing is an important part of a company’s growth. It can be used to create awareness and increase brand loyalty among the target audience, generate sales, and ensure the continued development of the business. However, it is not a magical one-size-fits-all solution and often has unintended consequences. Therefore, marketing techniques have often changed according to the time it was applied, the technologies of the time, and customer demands. According to Graesch et al., the question of what marketing is may vary depending on the period in which the question is answered. The meaning of marketing today is very different from what it was twenty years ago, or it will be twenty years later (125).

Types of marketing:

Traditional marketing channels, such as newspapers, magazines, and television, were one of the first ways advertisers could reach potential customers and give them their messages. Traditional marketing is not much different from digital marketing, but the main difference is the differences between the coding of data used for marketing practices and the decoding of those codes (Chomiak-Orsa and Liszczyk 14). The general feature of traditional marketing techniques is that they are annoying because they do not appeal to a specific target user and are often ignored by consumers. They are also very expensive and not always available. These features also result in a very low return on investment.

With the invention of web 2.0, consumers’ reliance on technology and digital media has evolved rapidly. Consumers are becoming more self-sufficient as a result of digitalization and personalization and can manage the majority of their procurement without depending on a single point of contact with a salesman or marketer (Graesch et al. 125). As technologies like smartphones and Wi-Fi become ubiquitous, people spend more and more time on digital devices, music and video streaming services, and social networks. This shifts the way we interact with these technologies—and with the people and brands that make them more convenient—and it also changes the way marketers connect with consumers (Chomiak-Orsa and Liszczyk 10). The idea behind the creation of digital marketing is that meaning is created through interactions between users and marketing professionals (AYDIN ASLANER and AYDIN).

Decorative Image: Digital Marketing

Fig. 1: Centralized Digital Marketing

Compared to traditional marketing, digital marketing has been much more successful as it is cheaper, always available, and aimed at target consumers. Digital marketing was very successful in many ways and continued to improve itself without stopping. In the graphic, some parts are colored gray because even though in most cases most successful digital marketing campaigns are done with inbound marketing techniques which add value to the brand, there are still campaigns with outbound marketing techniques that add to the brand nothing other than brand awareness.

Decentralized marketing, which is one of the most important topics in the marketing industry today, is a new branch of digital marketing that uses blockchain technology that brings a brand-new breath to digital marketing. According to Ertemel, blockchain uses cryptography technology and peer-to-peer computing to enable secure and direct transactions without middlemen. Blockchain is essentially a decentralized ledger, that is shared and agreed upon among a peer-to-peer network (36). One of the main reasons for having a reliable mediator is to believe that when an unexpected event occurs, the situation will be resolved fairly. Blockchain is using smart contracts, so it does not need such third parties. To do this, all parties sign an unalterable, programmed contract called a smart contract. In other words, smart contracts program all the possibilities that may occur, and what will happen when that situation occurs is specified in advance. Considering the problems that may arise while preparing smart contracts, it is important to include them in the contract. For example, if the seller cannot deliver the product in the promised conditions, the payment made by the consumer will be refunded (Ertemel 40). However, there is still a lack of direction on how organizations may use this new technology to improve consumer experience and engagement. With the adoption of blockchain, businesses will shift their focus from growing brand equity to providing brand promises that can be observed, documented, assessed, and transferred through digitally recorded transactions (Boukis 310).

Outbound marketing is the practice of using marketing communications that are traditionally performed via paid advertising and marketing messages to attract, persuade, or inform customers. While outbound marketing may sound more like old-fashioned marketing, some digital marketing practices can also be called outbound marketing. For example, one of the most important outbound digital marketing practices is digital advertisements. These are also known as pay-per-click ads or paid ads. The main idea in outbound marketing is to present the product directly to the consumer without contributing to the content. Simply, it is the way of forcefully showing the product to the consumer. Email marketing, banner ads, and cold calls can also be considered outbound marketing practices.

While we cannot agree on whether outbound marketing is old-fashioned or not, we agree with Hawlk that outbound marketing has provided great benefits to businesses from the past to the present and can be of great benefit even today when used in conjunction with inbound marketing (30). This gives hope for the coexistence of decentralized marketing technologies and centralized digital marketing technologies in the future.

Inbound marketing is the use of marketing communications that are traditionally performed by the customer (via a blog or social media) to attract, persuade, or inform the marketer. The main form of digital marketing is inbound marketing, which represents an organic marketing form, based on the close relationship between the company and its prospects or customers, who have expressed their interest in the company’s products voluntarily (based on subscriptions to newsletters, blogs, social networks, etc.) and who have been attracted and involved by a high quality of the content marketing (Patrutiu-Baltes 2).

Marketing Data:

Google, Facebook, Twitter, and Amazon may come to mind when it comes to data, so the term “Big Data” was coined to describe these data pools. Even though such data is digital, Facebook is the largest data hoarder in the business with over 100 petabytes of data, more than double the data cache of Walmart in the 1990s (Van Auken 41). A marketing data set is a collection of data about people and brands. Ideally, such data is openly available, easily available, and inexpensive to access. With this in mind, companies can better understand who their customers are, and how to market to them. Big data is a great asset for marketers, but it’s not the only thing that can be leveraged for business. To capitalize on insight and modern technology, many companies are moving towards data-driven marketing. It means these companies need to learn more about data collection and analyze it. According to Van Auken, individual businesses may use social media to develop their databases and engage with their target audiences more swiftly. The building of a single data warehouse that takes data from social media sites and gives specific data or more extensive evaluations of responses based on what is already known is critical to the development of personalized messages at the core of CRM. It might appear in a large number of specially crafted messages sent from an observation base (42). In traditional marketing, data cannot go much further than estimates. However, the data collection process in digital marketing may differ according to the technology used and the marketing infrastructure.

Centralized data-collecting techniques are typically used by companies, governments, and organizations to collect and manage consumer data. This approach enables the organization to gather, analyze and use consumer data to target and market their products and services to the consumer. These organizations usually offer a free service to collect user data, which makes consumer voluntarily give their information to these organizations, and in return, they use and sell the data they have. Many times, they follow the daily lives of consumers through these supposedly free services and turn them into targeted marketing content. Except for the free service you receive, you cannot earn any income from selling your information unlimited times. In general, even if you stop your subscription to these services, they will continue to use the data they have collected so far.

The development and maintenance of commerce through the Internet of Things, advertising, and Ethereum are all dependent on marketing (Jain et al. 8). Marketing has always been a valuable tool for business growth. But the advent of web 2.0 and social media has given the power of marketing to companies like Google, Facebook, and Twitter. These companies generate commercial income by selling the data they collect about consumers without asking them. With the evolution of digital marketing to decentralized marketing, this is over. Decentralized marketing has set up a platform where the consumer is the owner of the data and can sell their data if they want. It seems that with this new marketing system, companies that are third parties, between the advertiser and the consumer, will be eliminated. Thus, companies will be able to make more successful advertising campaigns at lower costs and consumers will be able to get real benefits from the advertisements they see.

From here on, we will build scenarios on a myth. The main purpose of this literature review is to search for the most beneficial marketing techniques for companies in this transition process. Decentralized marketing is a system, based on adding value to consumers. Today, this value is measured only financially, but as in inbound marketing, value is not measured only by financial gain. Decentralized marketing seems to start its journey through outbound marketing techniques, just like the internet did in web 1.0. This is because web 3.0-based websites are not yet as interactive as web 2.0-based websites. The current system uses partially web 3.0 technology on the web 2.0 platform. This situation will force marketers to use web 3.0-based digital marketing techniques on web 2.0-based structure due to the need for access to quality and useful content by consumers, and this change will continue until web 3.0 completely replaces web 2.0 if that is ever going to happen.

Decentralized Marketing:

Decentralized Marketing is a concept that has been brewing for several years. It has been a suggested concept to disrupt the current marketing industry and improve the way businesses interact with their customers. It has also been proposed to improve the decentralized network.

Fig. 2: Decentralized Digital Marketing

Decentralized marketing is a marketing approach that focuses on the user experience and, more importantly, the relationship between the brand and the user. The aim is to improve internet usage by building and maintaining relationships between businesses, consumers, and creators. According to Routray (2020), Blockchain-based businesses offer applications like the Basic Attention Token (BAT) that change the way advertisers, users, and publishers interact through the brave platform. With this method, consumers will be able to choose to see only the ads related to the topics they are interested in, as much as they want or not to see any ads at all. If a user sees an ad, a small portion of what the advertiser pays to purchase the ad is paid to the person who sees the ad, and a larger portion to the publisher in BAT (56). BAT is a token created in blockchain that challenges digital marketing networks through the Brave browser using the technology backed by Brendan Eich, the creator of JavaScript and co-founder of Mozilla and the world-famous Firefox browser (Hahn 25). BAT claims that it will eliminate the need for digital advertising platforms by establishing more reliable partnerships. These benefits will prompt consumers to quickly adopt these platforms. Of course, this will later be the main reason for advertisers to use these platforms to reach consumers but if we examine decentralized marketing from the advertiser’s point of view, we will see that contrary to expectations, advertisers using decentralized marketing benefit as much as consumers. While the internet is a well-organized communication tool that allows businesses to interact directly with customers and keep them up to date on the latest products, services, and company developments, the marketing, and advertising industry’s reputation has been tarnished by a never-ending series of scams, scandals, and deceptive campaigns (Routray 59). Perhaps the greatest of these problems will be against click fraud. In their 2019 study, White Ops and ANA predicted that losses caused by fraud in 2019 would reach as high as $5.8 billion globally (12). Blockchain can mitigate this devastating problem by creating a more secure environment for both brands and consumers (Routray 59). Decentralized marketing is result-oriented, and you do not pay for transactions that do not fulfill the conditions you set in the smart contract.

The evolution of marketing is witnessing a series of moves towards more decentralized and self-sustaining marketing strategies. From methods like crowdfunding to peer-to-peer marketing to social media and now blockchain, marketing is evolving towards more decentralized and self-sustaining models. Why is it important? Because the current state of marketing, also known as the platform economy (Han, 24), is based on a centralized model governed by central decisions and is surrounded by the issue of privacy and security. Blockchain technology offers a decentralized, fast, and secure alternative to the existing centralized model as well as an ad-free or paid browsing experience. If we consider the advantages that blockchain offers to the consumer, soon consumers will accept it.

Based on the qualitative expert interviews done by Han, the main problem with decentralized marketing is a lower number of active users. Other than that, decentralized marketing is way more beneficial for both parties compared to centralized marketing (310). The graphic below by Boukis provides easy-to-understand information about the benefits of decentralized marketing and the benefits of adaptation (The image was redrawn for clarity purposes)

Fig. 3: Boukis, Achilleas., Figure 2, p. 310

It is also mentioned that starting from the low-trust industries like diamond traders, real estate, art traders, and banks will be taken over by decentralized platforms (28). As it is known, the marketing industry is among the most untrusted sectors in the world, so it will inevitably be taken over by decentralized marketing, and its structure will be changed completely. It is said that the use of such a core technology by businesses already has an impact on company marketing performance, especially in multiple areas such as brand messaging, internet marketing campaign design, and brand transparency for consumers (Boukis 308).

Since the creation of the world, people have been searching for a better way of life. The introduction of the internet, digitalization, and smart devices have left us wanting more, and marketing has evolved from traditional forms of advertising to the internet where brand building and loyalty are now based on the value of a brand. But this was not enough for the consumer because the consumer was a tool for marketing, not a goal. Blockchain changed the marketing model and made the individual the center of their relationship with the brand. This is where NFTs came into play. NFT stands for Non-Fungible Token. NFTs must have one or more specialties to be valuable. Being the first of its kind, having been previously purchased by a famous person, being unique or rare, and providing real-life benefits. However, the feature that interests the digital marketing industry the most is whether there are real-world benefits or not. This will allow NFTs to be used for purposes such as the sale of subscriptions or the right to attend private meetings. It can also be used to easily build a community around a brand by offering special products, services, discounts, or early access to specials only for limited token holders. Using blockchain for marketing or community-building purposes is also not limited to NFTs. According to Boukis, unique businesses may leverage their corporate image by incorporating their brand names and extensive history into each of their blockchain-enabled goods. For example, a wine firm may use a blockchain application to allow customers to understand the journey of each of their wines, from manufacturing to retail by simply placing a barcode on the bottle. Customers learn more about the brand they are purchasing in this way, making their interaction with the business more appealing, realistic, and permanent (311). Ertemel also mentions that good gamification (mechanism) design, as well as meaningful marketing and storytelling, will become one of the core marketing techniques for firms to succeed in this age (43).

Drawbacks of Decentralized Marketing and Blockchain Technology:

Decentralized technologies, through peer-to-peer interactions, have the potential to disrupt marketing. This is particularly true of blockchain technology, which provides a means to improve upon and disrupt the broken and inefficient system of advertising and marketing that currently exists. Although blockchain technology has the potential to positively impact marketing, there are some drawbacks to using it. The high cost of transactions, the blockchain’s restricted scalability, the large amount of energy required to run additional blockchain nodes, and distributed databases all come back to consumers as “gas fees” for Ethereum-based transactions. Costs are astronomically expensive. Small transactions may not be a good fit for blockchain technology right now. Blockchain, on the other hand, is the ideal tool for a vast breach of privacy. This is because blockchains are distributed databases, which means that the data on any computer on the blockchain is identical. This implies that if you have a blockchain account, your block is visible to anybody on the network. As a result, everyone on that blockchain may see who you are, your transactions, and other information. When thoroughly researched, this can pose a major privacy risk.

The situation where customers take on the role of suppliers is another way in which value can be co-created on Blockchain. The cooperative economy culminates when old consumers become new competitors (Ertemel 43). Although this situation may seem advantageous in some respects, from the point of view of commercial organizations, it can affect the companies that currently dominate the supply chain. This may cause companies that require high investments to lose market share by not getting enough market share.

Another problem is that decentralized and centralized technologies can be integrated. According to Ertemel, not all blockchain-based projects are inherently decentralized. In addition to blockchain technology, more centralized initiatives can be created and implemented, giving the central authority even greater influence. This element should be carefully considered when evaluating blockchain-based initiatives (44).

Conclusion:

Marketing has evolved rapidly and subtly over the past few years. Big data and the ability to provide precise information are fundamental concepts of marketing and are constantly evolving. The data provided to marketers can now be visualized, analyzed, and interpreted with precision. Still, the best data is data collected by marketers themselves. The marketer’s ability to monetize this data is the next step in the evolution of marketing. In the future, blockchain will be an important factor in determining this. Marketing and data are very interrelated, and blockchain is a way to sell marketing data. Although there is great technology behind it, it is still in its infancy (Hahn 21). It’s one of the most exciting technologies on the market, and the corporate world is aware of it. Some companies are using blockchain to sell their marketing data, while others are using the technology to give consumers more control over their data. This gives us information about how hybrid marketing will occur in this transition period. In this period, large enterprises will not completely lose their influence on data. The transition period will not go beyond opening different channels to advertisers where they can advertise their products or services. Inbound marketing will remain the best marketing technique because it is a system based on the principle of adding value to the consumer, which is the basic principle of decentralized marketing as well. Or blockchain, as Gatomatis et al. mentioned, does not go beyond improving the already established technology rather than changing it (41).

In the hybrid marketing era, data will be collected in two ways. There will still be a lot of people out there that donate their data to highly web 2.0-based businesses. In addition, those who want to take ownership of their data and understand the complex nature of the blockchain will begin to control their data. Although the data gained over the blockchain will be much more controllable, cheap, and effective for businesses, the data gained or purchased with centralized marketing techniques will be at a substantial level.

Work Cited

Aydin Aslaner, Duygu, and Gülşah Aydin. “Dijitali Yeni̇den Okumak: Sosyal Etki Pazarlamasi Ve Influencerler.” Pamukkale University Journal of Social Sciences Institute, 2020, doi:10.30794/pausbed.795144.

Boukis, Achilleas. “Exploring the Implications of Blockchain Technology for Brand–Consumer Relationships: A Future Research Agenda.” Journal of Product & Brand Management, vol. 29, no. 3, 2019, pp. 307–320. ProQuest, doi:10.1108/jpbm-03-2018-1780.

Chomiak-Orsa, Iwona, and Konrad Liszczyk. “Digital Marketing as a Digital Revolution in Marketing Communication.” Informatyka Ekonomiczna, vol. 2020, no. 2, 2020, pp. 9–19., doi:10.15611/ie.2020.2.01.

Ertemel, Adnan V. “Implications of Blockchain Technology on Marketing.” Journal of International Trade, Logistics, and Law, vol. 4, no. 2, 2018, pp. 35–44. ProQuest, www.proquest.com/scholarly-journals/implications-blockchain-technology-on-marketing/docview/2194151039/se-2.

Gatomatis, Panagiotis, et al. “Using Blockchain for Business & Marketing Improvement.” Journal of Marketing Development and Competitiveness, vol. 15, no. 2, 2021, pp. 37–41. ProQuest, doi:10.33423/jmdc.v15i2.4332.

Graesch, Jan Philipp, et al. “Information Technology and Marketing: An Important Partnership for Decades.” Industrial Management & Data Systems, vol. 121, no. 1, 2020, pp. 123–157. ProQuest, doi:10.1108/imds-08-2020-0510.

Hahn, Alexander. “The Blockchain’s Impact on Digital Marketing Platforms.” Marketing Review St. Gallen : Marketingfachzeitschrift Für Theorie & Praxis, vol. 37, no. 6, 2020, imc.unisg.ch/app/uploads/2021/11/The-Blockchains-Impact-on-Digital-Marketing-Platforms.pdf.

Hawlk, Kali. “Outbound Versus Inbound Marketing: Which Strategy Is Best?” Journal of Financial Planning, vol. 31, no. 6, 2018, pp. 30–31. ProQuest, www.proquest.com/trade-journals/outbound-versus-inbound-marketing-which-strategy/docview/2063810081/se-2?accountid=12104.

Jain, Deepa, et al. “How Is Blockchain Used in Marketing: A Review and Research Agenda.” International Journal of Information Management Data Insights, vol. 1, no. 2, 2021, p. 100044., doi:10.1016/j.jjimei.2021.100044.

Patrutiu-Baltes, Loredana. “Inbound Marketing – the Most Important Digital Marketing Strategy.” Bulletin of the Transylvania University of Brasov Economic Sciences Series V, vol. 9, no. 2, 2016, pp. 61–68. ProQuest, www.proquest.com/scholarly-journals/inbound-marketing-most-important-digital-strategy/docview/1881686958/se-2.

Routray, Janendra K. “Blockchain: How It Is Changing Digital Marketing.” A Quarterly Peer Reviewed Multi-Disciplinary International Journal.” Splint International Journal of Professionals, vol. 7, no. 3, 2020, pp. 55–64. ProQuest, www.proquest.com/scholarly-journals/blockchain-how-is-changing-digital-marketing/docview/2620975779/se-2?accountid=12104.

Sundararajan, Arun. “The Shifting Landscape of Regulation and Consumer Protection.” In The Sharing Economy: The End of Employment and the Rise of Crowd-Based Capitalism, 2016.

Van Auken, Stuart. “Bot Baseline Report: Fraud in Digital Advertising.” Bot Baseline Report | Ad Fraud | White Ops, White Ops and the Association of National Advertisers (ANA), 2019, www.humansecurity.com/botbaseline2019.

Van Auken, Stuart. “From Consumer Panels to Big Data: An Overview on Marketing Data Development.” Journal of Marketing Analytics, vol. 3, no. 1, 2015, pp. 38–45. ProQuest, doi:10.1057/jma.2015.2.

BOOK

Contact page

BOOK