technology offers a solution. Blockchain startups are already building
decentralized influencer marketing platforms that add efficiency to the process
and enable influencer marketing campaigns to operate on a much larger scale.
Influencer Marketing on the Rise
online advertising strategies, which revolve around placing ad content on web
pages or in apps, are faltering. Ad blockers are surging in popularity which means many consumers no longer view embedded ads.
Meanwhile, only a tiny fraction of users who do see banner ads actually
click on them.
face of these challenges, influencer marketing offers a more effective way for
marketers to connect with consumers. The return on investment for influencer
marketing expenditure is about 650 percent by one estimate. On top of that, 71 percent of
consumers are more likely to make a
they are influenced by social media. For these reasons and more, investment in
influencer marketing is on the rise. Nearly 12 percent of marketing budgets are
now devoted to influencer
compared to less than 4 percent in 2009.
The Pitfalls of Influencer Marketing
influencer marketing can overcome some of the challenges associated with other
types of digital advertising, it also suffers from shortcomings of its own.
the greatest is the challenge of connecting advertisers to influencers. In most
cases, contracting with an influencer to market a product is a manual process.
An advertiser must identify an influencer to work with, determine how to
contact him or her and then negotiate a marketing arrangement manually. This
makes influencer marketing very inefficient, especially compared to other forms
of online ad placement, which can be automated using software tools.
limitation is that, in general, only major influencers are able to participate
in influencer marketing campaigns. If you aspire to be an influencer, building
a name that is large enough to attract the attention of advertisers requires
amassing hundreds of thousands of followers or viewers. Influencers with more
modest followings are left out of the picture, even though they can still
provide value to marketers, at a lower cost than top influencers.
companies attempt to solve these challenges by offering tools and services that
connect marketers to influencers in an automated way. While these solutions can
help, they create additional challenges. They add overhead to the influencer
marketing process, which cuts into influencers’ profit margins and makes
marketing more expensive for advertisers. Influencer marketing companies also
make the process less transparent because they work as middlemen, preventing
advertisers from connecting directly with influencers.
the major challenges facing influencer marketing today are a lack of automation;
the centralization of influencer marketing campaigns around a small part of social
media communities; and the difficulty of connecting advertisers to influencers
in a direct and transparent fashion.
Improvement Through Blockchain Technology
challenges that blockchain technology is well positioned to solve. A blockchain
can decentralize influencer marketing by allowing brands to connect directly
with influencers, while facilitating transparent and reliable payments.
are already leveraging blockchain technology toward this end. One example is SocialMedia.Market, which is building a platform
that uses smart contracts to manage transactions between brands and
influencers, enabling them to collaborate in a decentralized fashion without
sacrificing security and reliability. SocialMedia.Market, whose platform is set
to become available in beta mode in early 2018, also vows to lower the entry
barrier to influencer marketing by making it possible for businesses and
influencers of any size and type to work together.
is another startup building a similar platform. It also promises to enable
anyone to become an influencer by connecting them with companies with relevant
products to market and is designed to reward the most successful influencers.
a complete influencer marketing platform is not the only way to leverage
blockchain technology to improve influence marketing. As Vivien Garnès, a co-founder
of the influence marketing company Upfluence, noted, the simple use of
cryptocurrencies can streamline payments for influencers and, through smart
contracts, make payments contingent upon the fulfillment of marketing goals.
marketing is becoming the go-to strategy for marketers seeking to overcome the
rising challenges associated with other forms of online marketing. To make the
most of influencer marketing, however, certain inefficiencies need to be
resolved. Blockchain technology could be just the solution that this market