An introduction to the Blockchain, and how it can be used in the Marketing World.
What Is The Blockchain?
The Blockchain is a relatively new algorithmic concept that was launched in 2008 by “Satoshi Nakamoto” (not his real name) in order to support the “bitcoin” idea. But what is the bitcoin protocol that everyone has been talking about lately?
It implies three simple things:
- Transparent: Anyone can access everything without restriction;
- Anonymous: Users are only identified with alphanumeric addresses;
- Decentralized: No authority controls or owns the protocol.
The whole algorithm relies on the concept of transferring digital objects and making sure that they are not duplicated. Duplication has been one of the biggest issues since the inception of the Internet, where money, documents, identity, and more can be duplicated or falsified (e.g. think of fake credit cards and the nightmares they cause for e-commerce owners).
The blockchain algorithm makes each of the exchangeable resources scarce. Concretely, it means that if you need to transfer an ID to someone, you cannot transfer that same ID a second time or keep a replication of it. It will automatically be transferred, and only accessible to the person that received it. Same for a coin… here comes the Bitcoin (BTC).
If you still have trouble understanding the blockchain technology, here is a quick video that should help out.
Although it might not be straightforward, blockchain is a revolutionary concept. In fact with the right use, it should impact every industry.
Here are a couple of industries that could benefit from the blockchain:
- Administration: Requesting and delivering ID in no-time
- Government: Voting online in a secure way
- Finance: Quicker, cheaper and transparent transactions
- Music: Artists would receive full credit for their art
I could list many more, but this infographic by Crowd Companies will give you an idea of the many opportunities for the blockchain beyond Bitcoin. However, my true field of interest here is marketing, so let’s see how blockchain can help marketers.
Marketing Needs Transparency
The first principle the blockchain technology implies is transparency.
Today, for instance, if a customer wants to access a service, they will pay a company, which will give them access to that service. The transaction modalities are self-evident, since if one of them does not respect the tacit (or proper) established contract, the other can legally ask for payback. However, a third party is still involved: the judicial system, which guarantees the sale, and in case of conflict, can arbitrate between the parties.
Now, let’s say that this third party is an algorithm. How can an algorithm verify the trustworthiness of the information provided?
This is where the blockchain brings transparency into the equation. It enables each user to access the data regarding every transaction that has ever been made on the blockchain. It means that you are able to trace every $ going out of your account. So we would know exactly which of the two parties have not respected their part of the contract.
Transparency is not reserved to money transfer. That major (if not essential) feature of the blockchain technology is also applicable to every product or service for which the transaction has been digitized. Applied to marketing, transparency will allow marketers to learn more about their visitors, leads, and customers. Companies will be able to figure out who clicked, who saw an ad, or who bought a product, in a more accurate way than it is possible today with cookies and trackers. It doesn’t mean the identity of the person will be revealed, but only his/her online ID, opening doors to a concrete definition of “online identity”.
Tracking Performance Like Never Before
As professional digital marketers, you can relate when I tell you that one of the biggest daily challenges we are facing is to track our effectiveness online. How can one accurately measure its return according to the time and money spent?
Blockchain can be of great help regarding marketing ROI and performance monitoring.
As previously mentioned, the blockchain’s transparency will enable marketers to precisely follow each of their customers’ activity, and the use of every bitcoin (or any cryptocurrency) they will release.
When before you would invest $1,000 in SEA and get a big picture view of your keyword conversion rate, you would now be able to figure out which of those 1,000 x $1 keywords brought you the best ROI, and then do more of the same.
Similar reflection goes for on-site behaviors. While some tools already allow you to have a pretty accurate vision of what is happening on your site, apps, platform etc., you still have a hard time knowing exactly which details made you cash in. Blockchain will allow a better tracking of users behaviors, and help improve engagement.
As transparency goes both ways, your customers will also be able to evaluate their transactions and determine whether or not you are worth their trust. The companies working the hardest will therefore earn more credit on their work, than those who deliver poor service for a high price.
Bye, Bye, Middle Man
The blockchain model is a concept revisiting our whole commercial system, and redefining the core of that system. At some point in the future, we can even imagine, as Robert Allen showed, that marketers will be able to market directly to websites without going through the big guys (Google, Facebook & co).
When a party is habilitated to achieve a transaction between two other parties, that intermediary is enabled to do whatever it wants. Whether it is a real-estate agency setting up its own commission, or a social network gathering up money from data collection from its users. Every time one is empowered to monitor a transaction, one is enabled to make as much money as they want.
We can expect that with blockchain technologies, users will be more in control of their own data, and can decide if they want to “sell” their data or not, and at some point even get paid for that data.
“Marketers could also utilise the power of Blockchain for the safe storage of large amounts of anonymous customer data.” writes Charlotte Rogers. Indeed, not only does the algorithm define all resources as scarce and unique, but it also allows a powerful anonymity among the system.
Will The Internet Be Safer?
As seen, the blockchain offers the ability to define each product and service of value as unique and scarce. Although it may not appear straightforward when specified in the first place, it strongly helps in avoiding fraud. This has been pushed by an even more recent blockchain protocol called Ethereum, which has developed a unique approach to “smart contracts”
Unhackable
Defining a limited number of resources (whether it is money, contracts, etc.) limits transactions to the available products, which everyone has knowledge of, since the data is saved and accessible from every part. Because of that, hacking becomes much more complex, since hacking the blockchain would mean hacking into each computer using the blockchain (hundreds of thousands, even millions?) at the exact same time.
Preventing Fraud
The major issues companies like Google, Facebook, or Twitter have had with fake views, clicks, followers, or even accounts, could now be avoided thanks to the uniqueness of each “object” within the blockchain. Imagine that the value of a view or a click will be based on the “online identity” of the user, instead of some approximate targeting.
Avoiding Scams
Keeping in mind that everything is transparent among the blockchain, scams can not be undertaken as easily as before. For example, purchasing things online with false credit cards won’t be possible. The traceability of each digital object within the blockchain will make it impossible to create a new one out of nothing. Of course, risks will remain, but they mainly will come from “human factors” such as typing a wrong address, or not creating and storing your password in a secure way.
Frauds and scams, which are major issues for marketers, will thus not be a problem anymore.
It’s Up To Us Now
We are beginning to see startups emerging in this field of “blockchain applied to marketing”, such as adToken or BAT. Operating from two different perspectives, they both are offering “solutions for the digital advertising ecosystem”, as explained in this Medium article.
Limits of the blockchain that are often mentioned are ones that will most likely be overcome with the growth of the technology. Indeed, the blockchain is still a relatively new concept that has only beentried out in a handful of sectors and companies, and that has existed for less than 10 years now, but is still driving the world crazy. The blockchain is not just “a better version of the Internet”; it is potentially the basis of our future social, economic, and political systems, and it has the power to transform our lives and jobs even more than Internet itself.
Hopefully, the blockchain does not appear as a blurry or distant concept anymore, and you have an easier time linking it to your personal and professional life.
Now it’s up to us to develop concepts and tools to be better marketers using the blockchain. Any prediction on how the blockchain can empower your marketing?
About The Author: Anji ismail
Co-founder at Varanida
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