One of the focus areas for last month’s Unconference was Blockchain. A buzzword for sure. And possibly the most misunderstood, widely abused term in the world since “influencer”. Nonetheless, almost any brand that fancies itself to be innovative and technology-driven is taking a good long look at the potential of blockchain technology.
For marketers, blockchain opens up a world of possibilities to engage with consumers in a post-GDPR world. So, with that in mind, it was no wonder that Mark Noorlander’s session was so hotly anticipated. As the co-founder of leading blockchain studio, Flashboys, Mark has been at the forefront of many blockchain projects and is ideally placed to offer advice on deploying technology in marketing campaigns.
Blockchain - more than just Bitcoin
Every discussion about blockchain needs to start with a “simple” explanation of what blockchain is any why it’s not just about cryptocurrencies. Essentially, blockchain is technology that enables transactions between two parties without the need for a 3rd party to verify things - instead it creates consensus via the community. It is made up of five elements, only one of which is new tech.
- Ledger - a way to record the transactions digitally rather than scribbling on papyrus.
- P2P network - a way to share information or resources amongst a community, similar to sharing movies via Torrent.
- Hash - used to get the ledger into one sharing function.
- Public key - like a transparent box; everyone can see what’s inside, but only the keyholder can take things in.
- Miners - the only “new” element; essentially a group of computers calculating outcomes and acting as the verification barrier for transactions.
Confused? So were we. But really, you don’t always need to know how a supercar works, you just need to know what it can do. And what you can do with it.
GDPR is already outdated!
Bad news for those who’ve been responsible for GDPR compliance over the last couple of years. Blockchain technology protocols already render it outdated in terms of anonymity and data security.
At its heart the value of blockchain lies in the immutability of smart contracts. The hacking horror stories you hear in the news involve APIs or other bolt-ons, the technology itself is unhackable. Well, technically it’s possible to override the blockchain but to do so requires something like 550x the processing power of Google. And what would be worth that?
The beauty of blockchain in data is that is both information-rich and totally anonymous and so is by nature GDPR compliant. Yet, the information contained already allows you to build up a good profile of the target consumer. The move from anonymous online node to personally identifiable information is one that requires consumers to actively opt in and thus, offer their consent freely. To get that consent you need to offer the consumer something that they really value and then use it to get something of value to your brand.
Exploring the potential for blockchain in marketing
Imagine a world where, as a marketer, you could target with a customer without a middleman/channel taking their cut. Deploy a programmatic strategy with minimal wastage and combat ad fraud. Create genuine 1-1 relationships while respecting privacy. These are all areas where blockchain is already making a difference and the opportunities for engagement and relationship building are almost unlimited.
- Ownership: In its simplest form, blockchain is about who owns what. If you are a brand then if you know who owns your product, you can use that to help tailor your marketing to the exact demographic you need. If you can communicate with that owner, for example through an NFC chip inserted in a lining and connected to an app, you can push messages to them connected to that item. So, Gucci might send a message to the owner of a bag, during Milan Fashion Week, inviting them an exclusive “meet the designers” event there, using their bag as the ticket. So, you have the real owner, their location at a particular time and place and a captive audience once they are there. What if you could push a message when you know a bag will probably be nearing the end of its lifespan offering a discount of x% if you trade in your old bag at y store.
- Authentication: Now you know who owns what, you need ensure that owner can be confident in the authenticity of that item. The Guccis of the world spend too much time and effort weeding out fake items to protect their brand value. What if that same NFC chip in the Gucci bag above, registered on the blockchain, also carried information on the factory it was produced at, the name of the artisan who hand stitched the lining and the provenance of all the component parts?
- Supply chain: Provenance is an increasing concern for today’s consumers and applies not only to high value luxury goods but everyday items such as medicines, food, even the cotton in your favourite tee-shirt. At the moment, fancy supermarkets set great store by the fact they can tell you the name of the exact cow your burger comes from - with blockchain, this could become the norm.
- Counterfeiting: At the moment, if you have a PDF or digital concert ticket, you could sell or send that on to another person over email to use. However, you never actually send that ticket, merely a copy of it, you still have that ticket in your outbox. With a smart contract, you could turn that ticket into a token instead with ownership recorded on the blockchain - so when you sell the original token is destroyed and a new token created - which becomes the new ticket.
- From Internet of Things to Internet of Value: Blockchain enables marketers to create value in the digital world. In the ticketing example, rather than a PDF being emailed it becomes a physical token (in a digital sense). Properly deployed and incentivised, smart marketers can use tokens to motivate and then track their community. For example Burger King could create a token offering a free burger at certain locations which, once redeemed, could trigger other offers or work as part of a wider brand partnership.
So, is blockchain the ultimate retargeting machine or ultimate form of privacy? The real question is, does it really matter when you consider all the marketing possibilities that this technology can provide?
02 September 2016Sharukh Naqvi, Vice President, Analytics, Barclays
17 June 2019Josie Klafkowska
05 June 2019David Friar
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