Cryptocurrency is a 360 degree change in the payment mechanism that people use to make payments. It has practically replaced credit card payments, bank to bank transfers and other payment options through which information related to the buyer was apparent. Will it impact digital marketing in the year 2020? This question cannot be answered with a one liner. Before that, we need to understand what cryptocurrency is.
Understanding the mechanism of cryptocurrency
Suppose that you have to make an online payment through credit card. When you enter the number and go ahead with the transaction, a complete trail will be created. This would provide information related to you including name, bank name, card type and transaction frequency. These details are completely hidden when cryptocurrency is used to make payments. The money is transferred digitally due to which no track is retained.
Cryptocurrency and trading
Financial trading has been through a lot of changes in the recent past. These days, a lot of traders use bitcoins and other digital currency options to generate profits.
· As this trading option is very volatile, investors should always be aware of the profit percentages they are earning. A good percentage calculator can help in this case because it produces accurate monetary figures. For instance, if you are earning a 20% profit on an initial investment of 100,000, the amount can be determined with the help of this calculator. Simply enter “20” in the “%” text box and the actual base sum (100,000) on the appropriate field. When you click the “calculate” button, the correct figure will be determined instantly.
Impact of Cryptocurrency on Digital Marketing
When you talk about digital marketing, a lot depends on the consumer information that companies have. These details are extracted from the payment track records. For instance, if an individual has been using credit card to buy fresh flowers regularly, a lot of companies dealing in similar products would pitch a sales offer. If a consumer uses cryptocurrency to make payments, the task would become a lot harder. The reason being that there would be no history of the transactions executed by the buyer. Only, he would have detailed records highlighting his details. In a nutshell, it can be said that cryptocurrency would make digital marketing more challenging and competitive.
1. Consumer would be stronger than companies
As it is written above, digital marketing depends a lot on consumer information. Companies plan their online sales strategies on the basis of these details. They extract customer preferences so that appropriate products can be pitched. The increased use of crypto currency will shift this power to the consumer. The reason being that companies would not have any record of the activities a buyer was involved in.
2. Online advertisements would not make the same impact
Online advertising is a major part of the overall digital marketing umbrella. Customers view ads on the internet and then buy products which match their needs. The impact is again dependent on how buyers carry out their financial transactions and the payment method they are using. In case of credit cards, gathering payment details would not be that hard. However, when it comes to cryptocurrency, it would be much harder to compile required details. In comparison to credit card payments, digital currency does not have a saved history of transactions. Only the customer has an idea of what he spent money on.
3. Elimination of intermediate stakeholders
There is a certain flow which people use to carry out transactions if cryptocurrency is not used. For instance, if you want to buy something from Amazon, the company would act as a decision maker to complete the financial activity. This dependence on these stake holders operating in the middle would decline. As a result, the consumer would have more control on his transactions. With cryptocurrency becoming more popular, these integral stake holders would not have the same level of decision making powers.
4. Higher level of privacy
The internet is a hub of information and the personal details of users float from one place to the other. If your data is available on Facebook, Google and other similar platforms, it would not stay with them only. All this information is sold to internet marketers and online advertisers. Customers are pitched on the basis of the details that these stake holders have. However, the use of cryptocurrency would increase the level of privacy. As a result, middle level role players (Facebook, Google, Amazon etc.) would not have access to consumer information.
5. Purchasing data from customers directly
Digital marketing depends a lot on social media details of consumers. Proficient advertising brands purchase information from Facebook and other prominent interaction platforms. However, due to the increase in cryptocurrency usage, a change would be noticed. It is expected that as no transaction trails would remain, companies involved in promotion will procure information from the customers directly. In other words, the significance of popular social media channels is expected to decrease.
6. Economical budgets for digital marketing companies
It is not a fact that cryptocurrency would create negative impacts for digital marketing companies only. Certain positive effects would be created as well. These companies spend a lot of money to social media channels for getting consumer information. This helps them in targeted advertising. However, this option does not come for free. A hefty budget is spent on collecting this information.
- · Due to increased utilization of cryptocurrency, digital marketing brands would not have to spend loads of money on getting information about customers. In this way, they would get better financial results because a lot of money would be saved.
- · It is not easy to collect consumer information from Google, Facebook and other similar sources. In addition to that, to promote products / services, no other option is available to the advertising companies. However, as cryptocurrency does not have any monetary history stored, digital promotion brands can easily get in touch with customers directly and gather details.