Every advertising model in the history of marketing has experienced a plateau effect after a period of massive success. From the era of billboards, audio-visual mediums, to print media, advertising agencies have learned not to be fixated on one advertising model if indeed they want to keep up with the dynamic consumers’ behavior and connect with the target audience. This explains why digital advertising, as a new marketing strategy, has become increasingly popular among advertising agencies. By 2021, statistics show that the digital advertising budget will grow to more than $330 billion.
Within the digital advertising space, influencer marketing is fast-rising as a new marketing tool. The model capitalizes on social media users with a huge following to whom they recommend products or services. Similarly, brands are also aligning themselves with digital content creators whose craft is used on social media platforms as a marketing tool. As such, hiring the right content creators and influencers is considered an effective way of reaching customers as it can shift a brand’s image from obscurity into the limelight.
Obstacles in Influencer Marketing and Content Creation
Despite the success of influencer marketing, various hurdles are threatening the effective operation of this advertising model. They include:
1. Fraudulent influencers
With brands expected to increase their influencer marketing budget, it’s unfortunate that not all of them will get appealing results from influencer campaigns. The poor results can be blamed on fraudulent influencers who have created bogus followings and engagements using bots. When a brand hires such an influencer, it’s likely that their marketing campaign won’t be as effective as expected.
While there are tools to scrutinize influencer campaigns’ effectiveness, the data collected is highly questionable since influencers can manipulate the engagements and even buy fake followers. That said, there is a need for a trusted tool that can evaluate influencers’ success and validate their engagements.
2. Unreliable settlement systems
Usually, influencers and content creators are paid a one-time fee for their craft. On the other hand, brands and marketers use this craft to earn more engagement and impressions, which translates to more sales. However, there are huge discrepancies between profits from the increased sales and the one-time fee paid to influencers and content creators. Brands end up making more money than the initial amount they pay influencers and content creators for their marketing services. Similarly, brands may also pay way too much for influencer marketing, yet fail to achieve the marketing campaigns’ desired results.
An ideal payment system would evaluate the impressions, engagements, and successful sales from influencer marketing and compensate them accordingly. This way, influencers will be fairly paid, while brands will be assured of getting value for their marketing budget.
3. Third-party agencies
Brands spend a significant amount of money and time when hiring an influencer or content creator to market their product. From the actual budget for paying an influencer to the amount paid to marketing agencies who outsource influencers, the cumulative cost of influencer marketing is quite high, especially for small businesses. Moreover, the platforms on which influencers use to market the products tend to take a huge chunk off the marketing budget, which in turn reduces eats into the amount paid to an influencer.
Blockchain as a solution
Blockchain is already known as the technology driving cryptocurrencies, but its application exceeds the digital assets space. In the influencer marketing niche, this technology can be used to overcome obstacles and streamline processes in the following ways:
1. Guarantee authenticity of influencers
Blockchain can be used as a distributed ledger to create a system that logs influencers’ data such as previous works, number of followers and engagements, and reviews. The data is recorded in real-time, which allows brands to evaluate genuine comments and engagements, thereby ascertaining an influencer’s authenticity. Moreover, the system can also verify an influencer’s followers’ identities, mitigating the fraudulent influencer menace.
2. Efficient payment systems
To ensure that influencers are fairly compensated, a blockchain-powered payment system can be built to include marketing data such as reach, clicks, impressions, and conversions. These datasets detail the value generated from the marketing campaign, which means that an influencer will be paid based on their craft’s success. Also, Brands will be guaranteed of marketing return on investment (ROI) as it is possible to track marketing goals and pay influencers depending on whether these goals have been achieved or not.
Additionally, the use of smart contracts in these payment systems will help avoid settlement delays experienced in the traditional payment processes. As such, influencers and content creators will no longer have to wait long before they’re paid their dues. Payments are automatically disbursed once the marketing team approves the content.
3. Decentralize marketing
By implementing a blockchain-driven influencer marketing platform, third-parties such as marketing agencies become obsolete. Therefore, brands and businesses can interact directly with influencers and content creators without incurring outsourcing fees charged by marketing agencies. Influencers are also freed from the conventional centralized platforms, the likes of Instagram and YouTube that charge a substantial amount of money for running ads. With the monopoly of centralized platforms out of the way, micro-influencers will have an equal opportunity to showcase their craft without facing unnecessary stiff competition from macro-influencers.
At the moment, there is little hope, if any, that blockchain-based influencer marketing tools will fulfill their promises to content creators and marketers working on influencer campaigns. This is because developers tasked with building these tools have no experience in influencer marketing; thus, they may fail to address the fundamental issues ailing the industry. Nonetheless, there are some noteworthy tools with a feasible work plan that makes them likely to succeed in offering solutions to the influencer market. These include:
Steemit is a decentralized microblogging and social media platform where users are rewarded with the native STEEM cryptocurrency for creating and curating content. Similar to Reddit, Steemit has upvotes and downvotes functions that measure the value of the content.
Boosto takes a unique approach in empowering influencers in that it enables them to build their online stores on the Ethereum blockchain. This way, influencers, who also double up as content creators, have absolute control of their crafts and thus can choose who views it. The craft can be digitized or rather converted to digital tokens, which can be auctioned to followers.
Boosto has also partnered with dApps developers to build sales tracking tools that monitor genuine engagements. This goes a long way into ensuring that influencers on the platform are genuine and have real followers, unlike traditional social media platforms.
iii) Creator coin
Creator coin is a digital currency launched by Rally, a startup company committed to promoting interactions between content creators and their fans. Using this digital currency, influencers can recreate their customized cryptocurrency, which they can use to reward their followers and build engagements. For instance, an online streamer can create a cryptocoin and award it to fans who spend time watching their live streams. In turn, the fans could use the custom-branded crypto to buy virtual items from the same streamer or another one who shares the same platform. Influencers can also sell their services and products to fans who pay for them using Creative coin.
Influencer marketing, being a relatively new model of advertising, is faced with unprecedented obstacles that existing technologies have failed to address adequately. Emerging technologies, particularly blockchain, can be deployed to offer solutions that mitigate these challenges and build a virtual economy that supports the growth of content creators. As influencer marketing grows, it, therefore, becomes necessary for stakeholders to utilize blockchain technology to increase the effectiveness of this new marketing model.