Influencer marketing faces challenges that threaten its development, including fake influencers, the difficulty of authentication, the accurate measurement of performance, and finally the drawn-out transactions between the parties. However, wherever data and transactions exist, the gurus of web 3.0 present the blockchain as the ultimate solution. What’s the reality?
Using the blockchain to authenticate influencers
What is the blockchain? The word is on everyone’s lips but very few really know how to explain its principle in simple terms, even the experts in the field. Here is an attempt at a straightforward explanation: the blockchain is a decentralized data management mechanism that guarantees the transparency and reliability of information exchanged on the network, including tracking and certifying transactions. If you want to dig a little deeper, try Wikipedia.
The most well known application of this technology is Bitcoin, a virtual currency that doesn’t depend on any central bank, and that allows instant payments. But the blockchain’s applications aren’t limited to cryptocurrencies. Indeed, an industry using large volumes of data (almost all, so) can take advantage of this technology to simplify the collection, exchange and use of this data. For example, the health sector would benefit from adopting the blockchain, so that a patient’s medical data is available at any time for any health professional.
Now that the blockchain is a little clearer for you, you must remember, especially for what concerns us here, that the decentralized database means the absence of an intermediary, the possibility of instant transactions, and in principal the transparency of all the value chain. A potential salvational revolution for influencer marketing… at least on paper.
Supporters of the blockchain claim that thanks to the transparency of the system, it will no longer be possible for influencers to cheat on their real influence. This would solve a continuing challenge advertisers face. Existing influencer platforms are supposed to certify the real influence of the listed figures, but many don’t carry out the necessary checks.
The strength of the blockchain would then be to authenticate influencers, and allow all market players to consult the data related to an influencer, such as their actual engagement rate or the ROI of their last campaign, at any time. Very convenient!
For example, the development platform PATRON promises to allow its users to “publish, discover, book (?) or sell data related to influencers”, and wants to become the marketplace for social network influencers. The Japanese company has raised no less than 40 million dollars through crowdfunding (ICO). It is unclear whether the service will stay the course, but it’s clear that the founder’s promise has made many investors dream.
For transaction transparency (with smart contracts)
Smart contracts are a bit like the second blockchain revolution. Introduced by the Ethereum protocol, they made it possible to go beyond the single monetary use (embodied by Bitcoin) to apply the blockchain to any transaction involving a contract and the various data that it implies.
Transaction, data, contract: this is a cloud of keywords that seems to apply wonderfully to the relationships that unite influencers and advertisers. It’s based on that observation that the SM.M platform was born. The application uses smart contracts to define the terms and prices of the service according to each influencer. The marketplace is thus transparent and reliable, and prides itself on allowing a fair exchange between the parties involved, namely advertisers and influencers. However, at first glance, there is nothing to distinguish the platform from the hundreds of others that exist.
The blockchain to validate and optimize ROI
To certify the authenticity of an influencer with the blockchain, if indeed it’s really possible, is so to guarantee an optimal engagement rate and a stratospheric ROI. No deception, and no nasty surprises during the execution of the campaign. Fine.
In addition, the few existing projects boast of ultimately simplifying the measurement of influencer campaigns… Without really understanding what the blockchain is actually doing there. In reality, it’s conceivable that the blockchain would make it easier to estimate the ROI before launching a campaign, thanks to more easily accessible data, but it’s doubtful that it could be of the slightest help for a retrospective measurement of the performance.
Where, on the other hand, the blockchain can really improve the ROI is by dispensing of an intermediary, insofar as the marketplace is decentralized. As a result, commissions disappear, in theory.
The limits of the blockchain dedicated to influence marketing
A widespread mistake is to believe that data on the blockchain is necessarily authentic. This is wrong, completely wrong. The blockchain just ensures that the data, once entered on the blockchain, are incorruptible. What is on the blockchain remains on the blockchain, forever, as engraved in stone. But nothing precludes a malicious operator from injecting erroneous data if the system doesn’t have checks in place to certify upstream the data in any way whatsoever.
Similarly, no platform has so far proven that the blockchain can prevent, for example, click fraud or false likes, or how to simplify the measurement of campaigns, as explained above.
The only thing that seems really valid is the simplification and immediacy of the transactions between the parties. But nothing is stopping an advertiser and an influencer from settling a transaction in Bitcoin or one of hundreds of other existing cryptocurrencies, benefiting from the same advantages as a platform that optimizes transactions specifically related to influencer marketing.
Lastly, the so-called decentralized system means the absence of a regulatory authority or an arbitrator. Typically, in the Bitcoin system, if a transaction turns out to be fraudulent, it is impossible to ask for its cancellation, because nothing or nobody regulates the system. The blockchain adventure in influencer marketing could also be risky in the event of a dispute with an influencer.
What’s more likely is solutions claiming to use the power of the blockchain, trying to surf on the fashionable term and exploiting the incredulity of 99% of the population on the operation of the technology. Pure marketing in short!
If the blockchain has earned its credibility in the field of monetary transactions, it’s thanks to the effective success of Bitcoin: in almost ten years, the protocol has proven itself, allowing billions of secure transactions, without ever being corrupted. No other application can claim the same success today. This is the blockchain’s challenge: to be able to prove that its use can go beyond that of payments in the strict sense of the term, and be applied successfully to other industries. To date, there is no evidence that a blockchain dedicated to influencer marketing truly resolves the challenges of the activity.