What Blockchain Could Mean for the Future of Marketing

November 14, 2017 Kyle Harper

Tricycle and chain

For the average consumer, the future of marketing and technology can seem a little bleak. Over just the past year, we’ve seen headlines about advertising abuses on our favorite platforms and watched a massive financial institution bleed out private information. Alarming warnings from thought leaders like Stephen Hawking and Elon Musk have some consumers wondering how AI might affect the way they’re marketed to. It can all sound a bit scary, and marketers definitely don’t like to feel like we’re part of the problem.

So it’s a good thing thing that some up-and-coming marketing tech is much more hopeful than harmful for both marketers and audiences alike.

A little while ago, I wrote about how the story of Bitcoin gives marketers a great model for building a trusting audience. Essential to this story, however—perhaps even more so than the people involved or the marketing behind it—was a new system of technology that enabled the whole endeavor: blockchain.

Blockchain is probably at least a bit familiar to most marketers as a tech buzzword, but unlike other much-discussed technology trends like AI and VR/AR, its potential marketing applications have yet to be widely explored. To date, this tech has primarily been used to facilitate niche cryptocurrency markets.

So why should marketers care about it? Because it may very well be the technical basis for the future of digital marketing—if not the Internet as a whole.

Understanding Blocks and Chains

A good place to start in the marketing and blockchain conversation is with blockchain tech itself. How does it work?

The Internet as we know it today can be thought of as a series of interconnected “centralized” servers. Each of these servers stores information of a particular kind—from cat gifs to financial information—and then provides that information to users with appropriate permissions and access to the server. This has worked for years, but presents a couple of implications.

  • Central server structure demands trust from users, because once a user stores or provides information to a server, that user loses any control over how it is used or kept safe.

  • Centralized servers present a security risk. As we’ve recently seen with credit bureau breaches, storing information in a centralized place leaves a large vulnerability for criminals to exploit.

When we think about something sensitive, like a user’s financial information, their identifying information, or even marketing info like ad preferences and web behavior, a centralized server puts the onus on the user to protect themselves and to only trust reputable servers.

Image of a diagram of how blockchain works

Image attribution: blockgeeks.com

Blockchain seeks to solve these issues by making the Internet a more cooperative endeavor. Rather than storing information in a single place, blockchain allows users to store information in a public ledger that everyone in the chain has a copy of. Whenever a person makes a change to that ledger, a request is sent to the network to be approved in some way. If it’s approved—approval being a set action like completing a financial transaction or submitting proof of completion of some other task—every ledger in the blockchain updates to reflect the request.

Portions of the ledger can be encrypted so that it can only be read by another user during a request. So for instance, with Bitcoin, every user can see how much Bitcoin every other user has, but can’t take or give coins or see a user’s real personal info with permission from two parties in a request. This keeps the Bitcoin market safe from counterfeiting (everyone knows how many coins there should be) and makes it difficult to steal people’s money (everyone knows when a transaction should be happening and can prevent fraud).

This all sounds great for moving digital money around. But why does it matter for marketers?

A Trustworthy Exchange of Information

We live in an interesting time for marketers. Audiences want to engage with authentic, personal content. They want customized experiences and tailored search results, but they don’t want a record of those preferences out on the web. These conflicting consumer desires mean marketers are often trying to collect and utilize information while at the same time minimizing users’ awareness of that data collection.

Not the most trusting way to start a brand relationship.

But how would this dynamic change if, for instance, visitors had a public, anonymized record of their preferences that could be shared with a website upon entry? What if users got to approve brand data collection before it happened, and could publically access what types of info are being stored by a brand? What if you had verification for ad delivery, CTA conversions, or other moving-target marketing metrics?

Suddenly, a huge number of possibilities would open up for marketers: dynamically served web content that uses user-preference data, customer reviews, and testimonials that are tied to proof of purchase with the brand. Huge anonymized databases of user web behavior that could be researched to inform strategy. And all of this happening in a space mediated by the audience’s visibility into companies’ access and use of their data.

Blockchain is already beginning to expand its applications outside the cryptocurrency market. MIT for instance is pioneering a way to use blockchain to bestow and verify degrees and credentials from their university. Chinese fashion brand Babyghost announced they would use blockchain to standardize how customers access inventory information and to allow customers to “verify” the authenticity of their products. More widely known brands like Walmart and Barclays have also begun implementing blockchain as a tool for transaction and record keeping.

While it will take a few years for blockchain to slowly roll out into accessible marketing applications, marketers can still begin prepping:

  • Build systems and strategy with the understanding that it may become more commonplace for brands to make them public to their audiences. As one marketing and blockchain entrepreneur put it: “Blockchain ultimately anticipates that we’re going to see a future of publicness.”

  • Start to consider how you would want to customize user content experiences, and identify exactly what data you would need stored in a user record to accomplish it.

  • Begin to consider what sorts of research questions or projects you might be interested in for your ad buying, content, or search strategies, were there a large pool of customer data for you to analyze.

Image of the back of a computer tower

Image attribution: Thomas Kvistholt

Things to Come

Blockchain, while promising, isn’t a technology without hiccups. Currently, the technology is mostly relegated to niche open-source programming communities, and new applications on a commercial scale are in their infancy. Even the most well-established blockchain—the system supporting Bitcoin—is starting to feel aches regarding its scale: Digiconomist reports that updating a single transaction to the ledger now takes about the same amount of electricity as an average American household consumes in a week.

But waiting and looking for opportunity are two very different things.

Most brands right now are in a good place to research, plan, and keep an eye out for potentially useful early blockchain adoptions. The future of marketing is never written in stone, and while blockchain appears to be the most popular tech advancement for the moment, how broader consumer audiences will respond to the idea is still untested. Understanding your audience’s attitudes and keeping up with blockchain advancements as they come will be crucial for identifying the best moment to jump into this new space.

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Featured image attribution: Florian Klauer

The post What Blockchain Could Mean for the Future of Marketing appeared first on The Content Standard by Skyword.

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