Blockchain is a complex type of technology created by someone (or a group of people) with the pseudonym Sakatoshi Nakamoto. Originally created for the digital currency, Bitcoin, in 2008, because Blockchain allows digital information to be distributed but not copied, it has evolved into something much more. In fact, some are calling it a new type of Internet – one that could have huge implications for digital marketers.
To see why, firstly, we need to understand what Blockchain does. At its most basic, Blockchain is a digital ledger of economic transactions that can be used to record anything of value. The difference is, this ledger, or spreadsheet, if you like, is distributed across thousands of computers or ‘nodes’, and continually updated as transactions occur. Every node has an administrator, but, because the database isn’t stored in any single location, the records within are publicly accessible and verifiable. Significantly, it can’t be controlled by a single entity, hacked, or corrupted. Theoretically, it can’t fail and it is this resilience and transparency that gives the technology its potential.
Blockchain has already proven useful in finance, but it’s only now that its potential for marketers is really coming to light. Like any other industry, marketing involves contracts, data and payments and Blockchain can make all of this secure and transparent, but the inherent properties of Blockchain mean, that for marketing purposes, that could be just the tip of the iceberg.
Will Web 3.0 be powered by Blockchain?
In fact, many believe that Blockchain could be the driving force behind Web 3.0. Since it authenticates digital information, Blockchain could potentially revolutionise the recording, tracking and reporting all types of online data – all of which is critical for the purposes of marketing.
For peer-to-peer applications, it could certainly be useful for the growing sharing economy (the likes of AirBnB and Uber). OpenBazaar is already using Blockchain for a peer-to-peer form of eBay that eliminates transaction charges and many start-up companies are exploring how Blockchain can be used for creating secure, transparent contracts and product tracking. One company leading the way here is Ethereum, creators of an open software platform based on Blockchain technology that allows developers to build their own apps.
It’s early days, but if the technology is proven to work, then the ramifications (and applications) for marketers could be huge. BitTeaser, is a Danish ad network that already uses Blockchain to collect ad revenue in bitcoin instead of money – but that’s really just scraping the surface.
Huge potential for marketers
Perhaps the greatest asset that Blockchain will bring to the digital marketing arena is accountability: the technology can be used to verify ad delivery, record customer data and create iron-clad contracts with consumers and business partners. It can even give owners more control over digital copyright.
Indeed, it is already been used to tackled physical counterfeiting. Fashion designer BABYGHOST and digital solutions provider, VeChain, have teamed up to create a clothing range fitted with NFC-enabled computer chips. Not only does this validate authenticity of each garment, it also helps the brand connect and interact with consumers through the Blockchain technology.
Obviously, Blockchain can also be used generate tokens in a similar way to Bitcoin. These can help marketing campaigns in a number of ways, for instance, to reward customers and encourage loyalty. No doubt, we will see this use extended in identity-based ad targeting and CRM campaigns. Already, there is a Chrome plug-in called MetaMask, which enables an Ethereum app to run in the browser. This creates an ‘identity’ which is stored in the browser – a type of identity wallet – and one that can be used to track authenticated customers across a number of websites and accounts.
Be first off the Block
While the Internet is all about the rapid transfer of information, Blockchain offers something else – the rapid transfer of verifiable, incorruptible information and, for marketers, that means greater efficiency, improved accuracy and lower costs. Instead of all the what-ifs and guesstimates, marketers can now view data with confidence. With Blockchain, what you see is what you get. In fact, the day may not be too far away when Blockchain becomes the globally recognised reporting standard for digital advertising.
Right now, there is too much waste, too many intermediaries and too much uncertainty regarding data in the digital ad eco-system. Blockchain can eliminate this, while offering greater security, improved network resiliency and reduced transaction costs. And this are all the low hanging fruit. It’s what comes next that is most exciting!
Yet, to date, Blockchain hasn’t been widely adopted by marketers, probably because it’s perceived as complex. Not everyone understands it, but those that take the time to do so and invest capital in the new applications are the ones that will define the future of Blockchain in marketing and the ones who will benefit most.