In the past few months, I’ve come increasingly interested in the topic of Blockchain technology. This incredible piece of tech may just have the chance to fundamentally change our world. I’ve come together with both of my talented friends, Omri Shabi and Yael Rozencwajg and started Blockchain Israel, designed to promote, educate and spread knowledge on the topics of everything based Blockchain.
We are setting up a brand new kind of events to offer members of the Israeli startup ecosystem a way to share their knowledge, ask for help and support each other through good Karma.
The following article is a breakdown, featuring different theories and thesis I gathered as I was trying to imagine and decipher how the world of marketing will change with the adoption of Blockchain technologies. At my day job, I help startups grow through marketing intelligence based services.
By now, most of us understand the incredible untapped potential of blockchain based technologies. It truly has the power to revolutionize and change our world in so many areas and disrupt entire industries. In order to get a better sense of how and why, here’s a quick non-technical explanation of the underlying value it holds.
A Blockchain is a massive, decentralized ledger. Entries in the ledger are generated by transactions using a particular “cryptocurrency.” This digital money is an essential, but separate, an element of Blockchain, as no entries (and no data) can be logged to the Blockchain without transactions taking place using cryptocurrency like Bitcoin.
Transactions in a Blockchain are associated with “keys,” strings of numbers that correspond to a user, and that user’s digital wallet. A user’s private key can only be accessed by the user in question (securing the user’s wallet behind an impenetrable wall of cryptography), but the user’s public key is used to reference the user’s activity in the Blockchain.
The last bit is crucial because, in a Blockchain, every party has equal access to the same data. Everyone can see who bought what and when, and can from there develop the same targeting infrastructure we see today, only now the data isn’t governed or owned by any particular entity.
In today’s world, trust in advertising hangs at a low point. Advertisers and marketers alike have no transparency over the spending of their campaigns and the backend process taking place through intermediates. Blockchain holds the extraordinary potential to be used to detect whether ads are being delivered and if they’re going to the right place.
“Any industry that is full of intermediaries, has a lot of value lost along the transaction path, and lacks transparency and trust is an industry that is ripe for Blockchain-driven disruption”
According to Jeremy Epstein in his book The CMO Primer For The Blockchain World: How This “Trust Machine” Impacts Branding, Customer Experience, Advertising and Much More.
It comes as no surprise that the first and most advanced wave of Blockchain-based technologies are seeking to upend how digital advertising is purchased, delivered, measured, and valued.
We can expect to see initial traction from the first generation of solutions as early adopter CMOs and digital marketing leaders begin to experiment in the near future. You will hear of preliminary proof-of-concept implementations that reduce reporting time, improve reporting accuracy, reduce fraud, and reduce costs in the advertising supply chain. You may also see downward price pressure on traditional agencies responding to the competitive threat.
In his book, The Attention Merchants, Tim Wu writes:
“If we think of attention as a resource or even a kind of currency, we must allow that it is always, necessarily, being “spent.” There is no saving it for later. The question is always, what shall I pay attention to?”
As marketers, we sometimes take for granted that the attention of others comes without any cost to ourselves. Since others pay for attention, marketers have historically just done whatever they could to get it. In a Blockchain-based world, this paradigm could change. Arguably, it is already changing as more than 600 million devices worldwide run some form of ad-blocking software. William Gibson writes:
“In the longer term, things gets a bit more interesting. In the future, if you want someone’s attention via advertising, you may end up having to pay the person for it directly. You certainly will not swipe a credit card every time someone sees your ad. However, you might pay them a small fraction of a cent. Micropayments for attention can only work at scale, with a digitally native currency”.
Decentralized auditing is cheaper, and can work. A brand could take ad deliveries from an ad server, then release them to the mining machines in the Blockchain, which would then be able to analyze them and scrub them for fraud. So simple “footprints,” like a non-live browser supposedly seeing an ad, can help a brand figure out if the ad delivery happened. “It’s a way to have massive change,” said Morgan. The more interesting use is if those frauds can be identified and blacklisted in real time.
According to Tim Berners Lee, better known as the father of the modern web, Right now we’re at the tail end of Web 2.0, marketers are dealing with overflowing masses of data, a large chunk of which is generated by the biggest tech companies of today: Amazon, Apple, Facebook, Google, and others. Who exactly owns or should have access to this data is one of the biggest debates in government and industry right now.
A good example is Facebook which has almost 2 billion users worldwide. That scale of audience, combined with the data the company has on that audience, gives Facebook a lot of control over the course of digital marketing — too much, many marketers feel. Companies like Facebook have become walled gardens of data; data that marketers feel they should have some claim over, considering it’s their products being bought and their ad dollars being spent.
Blockchain could end this debate.
“[Blockchain] allows multiple parties to access information. And that information is in a secured, immutable, and decentralized owned data store,” says Ken Brook, founder and CEO at MetaX. “No one controls the database, [so] there is no incentive for a database owner to manipulate the data in any way. Individual parties don’t have the ability to doctor the data. This allows multiple parties to coordinate on a digital marketing campaign, and be able to reconcile the first party data that they’re tracking with third-party data that’s sourced from the Blockchain.”
At the end, Blockchain is the foundation upon which a new cultural and functional iteration of the web will be built.
Consider the existing paradigm, as we all know it today. A marketer sets up a digital campaign and runs it across all relevant channels. The marketer wants data on the performance of the campaign, and any leads or conversions it generates. However, this requires cross-collaborating with intermediaries at almost every turn; whether they be affiliates, walled gardens, or programmatic ad networks. The quality of that data degrades as it passes from entity to entity, and it’s often not clear who ultimately owns the data, or deserves attribution for outcomes (and how much).
This is the main reason why there are many gaps and inconsistencies in large sets of data, as we’re collecting and crunching data from multiple sources. This opens the door for all kinds of issues such as fraud and potential schemes. Not to mention the lack of transparency, clarity and many inefficiencies.
Of course, if Blockchain were to suddenly manifest as the status quo tomorrow, marketers would have a tough time reconciling with the idea that their data, one of the most coveted commodities in business today, no longer belongs to them. But the data wouldn’t belong to anyone else either.
If a Blockchain is a distributed ledger and everyone has a copy of the information, In a Blockchain world, It changes the conversation from who owns the data to who makes the most of it, how they use it. At once, Blockchain addresses the data ownership debate, data privacy compliance, attribution, and data security. It alters the way we do business, globally, in the process, but it’s nonetheless an exciting prospect for marketing.