Digital Marketing and the Blockchain
It’s the start of 2018 so why not begin it with a buzzword, cryptocurrency. Unless you’ve been hiding under a rock for the last few years, or you're heavily invested in them, you’re probably bored of reading about cryptocurrencies. Whether you’re a casual trader, don’t really know what it's all about, or are skeptical of the story about your mates’ mate who’s now living on a private island having cashed in the millions they’ve made, Bitcoin and cryptocurrencies are set to continue to dominate financial headlines this year.
The backbone of the meteoric rise in cryptocurrencies is the blockchain. An “incorruptible” and “decentralised” digital storage and distribution ledger, powered and maintained by its very users with full transparency. As this ledger is public and decentralised, traditional middlemen (e.g. banks) become obsolete when it comes to facilitating and recording transactions or anything of value. The technology has been around for 10 years or so and is gaining major mainstream media attention by the day. There is a huge volume of literature out there on what the blockchain is and its uses, and if this is your first time reading about it then I’ve included a useful link to help explain it better.
As with a lot of technological innovation the use cases are seemingly endless and digital marketers will of course take an interest. Surely this “revolutionary” and “disruptive” technology can be applied to an industry founded on these very principles?
There are a number of ways the blockchain could be used for digital marketing purposes. This post attempts to summarise how the adoption of blockchain technology could impact consumers and advertisers.
When it comes to blockchain and digital marketing, the consumer can benefit. Imagine a digital ecosystem where advertisers pay real people, via microtransactions, for their information rather than a third party. Using blockchain technology, which is fully transparent, users can voluntarily part with their data, at a price, whilst being confident that it won’t be breached by a malicious source as it’s totally decentralised.
The consumer also can also benefit from the transparency of supply chain tracking that blockchain could offer. When it comes to any product containing physical components or ingredients brands could track them from source to shelf and pass this on to the consumer to ensure full transparency against any claims made through advertising.
As a result of a more direct relationship with brands, the consumer should benefit from better content. Brands will need to win the hearts of consumers in order to get them to part with their data and continue make them feel valued.
Finally with digital currency integration, consumers gain another way to pay for products, streamlining their interaction with a brands website.
There are companies experimenting with these principles already. Blockchain start-up BitClave, for example, a “decentralised search engine” promises to put the consumer in charge of who can access their information as well as compensating those who do part with it.
For now though, the consumer will probably benefit from the blockchain without even knowing, as companies start to realise it’s value and build interesting and engaging apps on the platform. Kodak, for example, have made headlines for their pending consumer application of blockchain technology which will allow photographers to track where their images are being used and receive immediate payment in the brand's own cryptocurrency.
There are a few crucial benefits for the advertiser that makes blockchain technology particularly interesting especially in the context of regulatory changes coming in 2018 - brand safety and data security.
2017 was arguably a year of placement shaming. Brands pulled millions of ad dollars from global media platforms due to the fear of being associated with sensitive content, and rightly so.
Blockchain technology could hand over control to the advertiser through transparency, by showing exactly where an ad has been placed. This could eliminate the black box nature of the large platforms currently used to serve ads. The Google Display Network for instance exists because there is a legitimate need for a bridge of trust between advertiser and website. Programmatic buying with blockchain could independently ensure reliability of a website owner without the need for a middleman, meaning brands could communicate directly with websites with complete confidence as the website owner is able to prove that ads served are being viewed and clicked on by real users.
The end result for advertisers? Media efficiency by eliminating fraudulent impressions and traffic as well as profit gains through more media budget being used to serve ads to real people. Companies such as AdChain are building products on the platform to do this already, claiming to provide end-to-end transparency from an ad impression with the ability to blacklist in real-time.
Third party audience buying could become a thing of the past as advertisers become able to purchase data directly from the consumer. No more inferred demographics. Advertisers could verify users are real and find out how much their data is really worth to them, rather than to Google or Facebook.
With GDPR looming, blockchain seems highly relevant. It’s a secure way to store large amounts of customer data. Even better, it’s encrypted and decentralised. With blockchain, scale means further security. At the same time as being a safe way to store data, the blockchain also presents a way for customers to give consent for their data to be stored, something which will be mandatory with GDPR.
Aside from the technical possibilities brands can benefit from the PR opportunity of integrating this tech. If you want to be seen as a forward thinking company, embracing new technology look no further. Integrating digital currency as payment for your products also allow for incremental profit to be made. I can’t think of a UX presentation I’ve seen recently that hasn’t talked about payment methods being key to increasing conversion.
In order for these use cases to become a reality, mass adoption is needed and potential problems surrounding automation of advertising solutions to allow for scale will need to be addressed. Outside of cryptocurrency the blockchain is in the fluid infancy of its product life cycle, with dominant design yet to appear. No one really knows what to do with it and there is a lack of development talent in the market to build blockchain applications for brands. Small start-ups will likely thrive while the stakes are still low rather than large brands with marketing budgets in the multi-millions.
More to the point, people just don’t get it yet, or don’t care enough to bother. Digital teams already have enough difficulty articulating and justifying the work they do to their boards without adding a further layer of complexity. The likes of Google and Facebook offer a familiar, easy to use service that can be understood across management layers because as products themselves are used every day by the majority of the population with access to the internet. Either way, blockchain technology represents the opportunity for change, which is something as digital marketers we continually embrace. Early adopters will reap the benefits while others will have to play catch up.
In the short term there is still work to be done by advertisers to improve their creatives, which can often be an afterthought once a media plan has been created. The blockchain represents the opportunity for laser focused and reliable consumer targeting, but without the right creative the opportunity could be largely wasted.