Image by Pete Linforth from Pixabay
Three years ago, Facebook (now Meta Platforms) announced a policy banning crypto advertisers from using its platform. The policy was lifted six months later but at the time, the future remained vague about how to integrate blockchain technology into social media marketing and advertising.
However, now in 2021, different social media platforms are championing blockchain and cryptocurrency projects to support creators and influencers on their networks. What has changed over the past years?
To start with, influencer marketing is a powerful tool that enables companies to show the world their best side without having to go the route of traditional advertising. The industry is said to be worth $13.8 billion in 2021, rising from only $4.1 billion last year. More and younger creators are emerging, breaking the ceiling of possibilities in the reach of their influence. Yet, influencer marketing as it is suffers various obstacles, namely in automating campaigns, empowering creators (financially and otherwise), and facilitating authenticity between brands and influencers as well as trust between creators and consumers.
The blockchain offers a solution to multiple influencer marketing challenges, by reducing the associated costs of campaigns and facilitating direct, unmediated interactions between brands and independent creators. In turn, this has the potential to invigorate influencer marketing as an industry, enabling bigger brand campaigns that are better targeted at relevant audiences.
Blockchain technology also serves as a way to ensure the authenticity and validity of content creators with respect to their audience. This can be a powerful tool for both social media platforms themselves and for brands and marketers looking to reach high-quality audiences online.
For influencers, the main advantage of blockchain is that it creates multiple pathways to get paid for their craft. Crypto-based influencer gifting is but one of many ways blockchain technology will impact the influencer marketing industry. For instance, in September, Twitter became the first social network to allow users to accept tips in cryptocurrency. As Twitter heralds a new era of crypto payments for social media creators, it also announced plans to enable the authentication and display of NFTs from its app.
Besides crypto payments, another way the blockchain empowers influencers is through tokenizing socially-significant moments on social media. TikTok, in September, launched its first NFT collection, comprising videos from some of the most acclaimed creators on the platform, including pop star Lil Nas X. This TikTok influencer marketing move creates a pathway for fans to not just support their favorite creators but to also be part of social media ownership. This represents the transformative potential of blockchain beyond pure economics: the ability to facilitate true community-driven collaboration between creators and fans.
Further, in its transition from Facebook, Meta Platforms hopes to herald the metaverse, which it describes as the next evolution of social connection. The promises that Facebook’s metaverse hold for social creators are those best delivered through blockchain technology, such as to “unlock a massively larger creative economy than the one constrained by today’s platforms and their policies,” as Mark Zuckerberg said.
The potential for blockchain to change the influencer marketing industry by bringing more automation via smart contracts is a very real one. In the coming years, we would see more DAOs like SocialMedia.Market, which exists to facilitate engagement between companies and influencers, including using smart contracts to manage transactions.
In this way, blockchain technology enables a system of more effective and transparent partnerships, resulting in more meaningful connections between creators and sponsors as well as creators and consumers.
The decentralized nature of blockchain makes it a viable solution to the headache of tracking marketing ROI or bringing adequate transparency and trust to influencer marketing. Through the blockchain ledger, an influencer marketing firm can finally track attribution and measure return on investment through transparent and verifiable means.
This gives incentives and assurance to both influencers and brands alike, allowing influencers to trust in the system and be confident when they see returns on their efforts. Ultimately, blockchain innovation in influencer marketing allows for a greater influx of influencers into the marketing space, as they make sure that their content is yielding them a fruitful return.
While we’ve only scratched the surface of what’s possible with blockchain technology and cryptocurrency, the fact that this new kind of content economy is gaining momentum is definitely a good sign. It’s clear that there are benefits to both the influencers themselves, who can monetize their online presence more easily, and their fans, who get to feel like they’re getting something personalized and unique out of their online experience.
The security, efficiency, and transparency of this technology can lead to better and more trustworthy influencer marketing campaigns for brands. In turn, consumers will be more willing to interact with brands, which means higher engagement rates for marketers. In the end, blockchain in influencer marketing is vastly beneficial for all parties: creators, brands, sponsors, consumers, and fans.