Digital marketing has been based on user identification and tracking across browsers, devices and advertising platforms for over 20 years. Cookies enabled brands to see which pages people visited, where they came from, and if an advertising campaign ultimately led to a sale. As expectations of privacy increase and digital behaviors expand to additional apps, platforms and ecosystems, that model is no longer reliable.
Marketers have a whole different kind of digital identifier that blockchain networks provide: the wallet. An Ethereum wallet supports applications and can be used to store digital assets, accept payments and confirm ownership, but not as a traditional advertising profile. That doesn’t mean wallets are coming to replace cookies, but it does indicate that marketers will increasingly have to learn the internet, where customers will now carry part of their digital identity with them.
From wallet infrastructure to the ethereum price usd, interest in the latter is a testament to how much larger Ethereum’s economy has grown. On the Ethereum mainnet and its Layer 2 ecosystem, hundreds of millions of addresses hold around $172 billion in stablecoins, making it an environment that’s growing increasingly large for consumer and financial activity to occur directly from wallets.
- Why Is the Cookie-Based Marketing Model Becoming Less Reliable?
- What Can a Wallet Tell a Marketer?
- Loyalty Could Be Where Wallet Marketing Becomes Most Useful
- Wallets Could Change Customer Acquisition
- Ethereum’s Layer 2 Growth Matters for Marketers
- Privacy Is the Biggest Complication
- The Wallet Could Become Part of the Customer Relationship
Why Is the Cookie-Based Marketing Model Becoming Less Reliable?
Cookies made a significant leap forward when websites were able to use them to remember users and advertising networks were able to link behavior across much of the internet. This prompted marketers to get used to creating audiences based on browsing history and third-party-collected device information and activity.
The web of the modern Internet is much more fractured. Consumers move between mobile apps, browsers, streaming applications, marketplaces, and closed social platforms, and privacy controls are increasingly limiting the flow of information between them. The same customer can engage with a company at multiple touchpoints without leaving a neat footprint that can be tracked by traditional attribution methods.
Wallets provide a different model for institutions and marketers, allowing the identifier to reside with the user rather than the website. A single Ethereum address can be used across multiple applications and can hold assets and demonstrate ownership without a company having to create a new account each time.
What Can a Wallet Tell a Marketer?
A blockchain wallet shouldn’t be thought of as just another promotional cookie. It doesn’t necessarily disclose a person’s name, age, location, or other typical demographic details, and there are clear privacy and accuracy issues in trying to guess a person’s attributes from blockchain activity.
Ownership and interaction are some of the things wallets can do particularly well. An address can prove that it holds a specific token, has transacted with a specific smart contract or has a digital membership from a brand.
That alters the questions that marketers can ask. Rather than asking whether someone clicked on an ad, a business could learn whether a wallet in the program has a membership token, has redeemed a reward, or has performed a particular on-chain activity. The marketing relationship is more focused on provable consumption and ownership.
Loyalty Could Be Where Wallet Marketing Becomes Most Useful
One of the most obvious use cases is loyalty programs. Typical customer retention programs are stored in a company’s database, so customers earn points that are valid only within that retailer’s system.
Those rewards can be more programmable with blockchain-based loyalty. A wallet could hold membership credentials, digital collectibles, access rights, or other benefits that stick with the customer as they switch between compatible services.
It might also make it simpler to form partnerships among brands. Instead of businesses trying to reconcile their different loyalty databases, blockchain technology can be used to create a shared system for confirming if an individual has an eligible reward or membership credential.
This is especially intriguing given the size of the stablecoin economy on Ethereum. There are currently around $160 billion in stablecoins on Ethereum’s mainnet alone, with billions more on Ethereum Layer 2s. That gives you infrastructure that can handle customer payments to small digital rewards.
Wallets Could Change Customer Acquisition
In the digital advertising world, customer acquisition has traditionally been divorced from the product. A business pays for an ad, tracks the traffic, and tries to convert the traffic after they hit a website or application.
It may be possible to speed up that journey with wallet-based marketing. A campaign could send a digital reward straight to eligible users; it could be based on ownership, or a user could complete an incentive with a wallet interaction.
The key distinction is that the resulting relationship is not necessarily temporary and is not destroyed when the browser window is closed. When the customer keeps the asset or credential, this can be considered for future campaigns.
For example, this may transform customer acquisition from renting audience space from an advertising network to building a long-term digital relationship with the customer.
Ethereum’s Layer 2 Growth Matters for Marketers
One of the most significant challenges to consumer-level operation of this kind of marketing has been cost. If transactions are costly, giving out low-value rewards to millions of users through blockchain transaction fees is not economical.
The barrier is being lowered by Ethereum’s Layer 2 ecosystem. Today, over 100 live Ethereum L2 networks are monitored across the ecosystem, offering more affordable transaction environments and ultimately integrating with Ethereum.
That makes it possible to make small interactions increasingly realistic. Rewards for loyalty, digital receipts, memberships, and promotional assets do not have to be very valuable, as they can work on lower-cost networks.
Also, that could ultimately make blockchain infrastructure something consumers don’t notice, at least not to marketers. The best crypto applications might not even position themselves as crypto products.
Privacy Is the Biggest Complication
However, there is a crucial contradiction in wallet marketing. While blockchain can minimize reliance on traditional tracking methods, public blockchains can also reveal significant activity.
Ethereum addresses are not necessarily private. The ability to see transactions, balances and smart-contract interactions publicly can also lead to more surveillance, as opposed to less, if marketing is not done carefully with the wallet.
Moreover, Ethereum developers are increasingly focused on technologies that enable users to prove something without revealing their full transaction history, like zero-knowledge proofs and private transactions. Those tools could be significant if wallets are ever widely adopted for customer authentication and loyalty.
So, the marketing world can’t just swap cookies for wallet tracking. Consent, data minimization, and privacy-preserving technology will still be important.
The Wallet Could Become Part of the Customer Relationship
Cookies were conceived for an internet in which businesses could recognize visitors across sites. Wallets are part of another type of model where users can move assets, credentials and proof of ownership from one digital service to another.
However, this doesn’t mean the traditional marketing database is dead, though. CRM systems, first-party data, email and traditional customer accounts will remain a significant part. Wallets will most likely become another layer in that infrastructure.
The bigger change is conceptual. For years, marketers have been considering audiences as profiles built from clicks, browsing habits, and platform data. Blockchain ecosystems push them to consider customers as participants who can own digital assets, carry credentials and directly interact with applications.
Ultimately, cookies enabled marketers to know where customers had been. Wallets may be the next key platform for brands to learn what customers have decided to own, join, or do. That could prove more meaningful as digital marketing evolves into a more privacy-focused, user-centric internet.
