What the Heck is Blockchain?! 5 Things Digital Marketers Really Need to Know

 
 

There’s this new thing talked about in hushed whispers at marketing agencies these days. And no, it’s not an invite to Fight Club someone left on the copy machine. But it does pack a punch, to the point where it may transform marketing as we know it.

It’s time to talk about Blockchain, the biggest disruptive technology in decades. It’s already powering a vast number of transactions on the internet and holds the potential to change how digital marketers tap into data streams and engage with their audiences in the near future. And despite its open-source nature, Blockchain is highly secure and transparent.

“As revolutionary as it sounds, Blockchain truly is a mechanism to bring everyone to the highest degree of accountability. No more missed transactions, human or machine errors, or even an exchange that was not done with the consent of the parties involved,” wrote Ian Khan, three-time TEDx speaker, author and futurist.

With that said, here’s a quick primer on what digital marketers really need to know in order to join the conversation about Blockchain.

1. It's already everywhere

Blockchain is best-known as the digital infrastructure behind the cryptocurrency Bitcoin. In a nutshell, it's a spreadsheet with millions of transactions – also often called a "digital ledger" – maintained in a de-centralized manner on thousands of computers at the same time.

It's a highly secure, peer-to-peer network for verifying a large number of transactions. And it's already powering the data processing not only behind digital currency, but ethically sourced fish, digital music releases, and Internet-of-Things applications such as money-operated door locks. Next in line are the control and tracking of goods and people as they move across international borders across the globe.

2. It could revolutionize programmatic

At a time when measuring the impact of programmatic advertisements can become problematic – advertisers lost $7.2 billion to bot fraud in 2016 (ANA) – using Blockchain may offer some much-needed transparency. The system, with its capacity to handle and verify millions of transactions, could be used to track programmatic ad delivery.

Aside from ad verification, marketers could directly tap the Blockchain's financial backbone to handle ad buying in a cash-based system. Pioneers such as Danish-slash-American start-up BitTeaser takes out the middle man by letting publishers purchase advertisements in Bitcoin, Dodgecoin and other cryptocurrencies. This also holds the potential to bring down overall advertising costs per transaction.

3. It provides new ways for consumers to wield influence

Blockchain has proven itself as an excellent tool to track and update the value of digital "tokens" – for instance the Bitcoin currency – across a global network. But that's just the beginning: Marketing pioneer Jeremy Epstein, CEO of Never Stop Marketing, imagines a world in which Blockchain could be used to issue digital "tokens" that users can spend on different products and services.

For instance, there could be separate token systems for ride services like Uber, or for fitness centers, or exclusive token systems that can only be spent on vegan food. The way users acquire and spend these tokens could be a way of communicating their lifestyles and preferences – to the point of becoming status symbols.

4. It can breathe life into products

Blockchain supports so-called "linking" of sensor-equipped products – for instance a sweatshirt with an RFID-chip – to apps and software platforms. The most logical application lies in the authentication of brand-name products, which Shanghai-based digital identity solution VeChain is already offering. It's always nice to know that your new $4,000 designer handbag is, you know, not a rip-off…

But there's more: The technology also supports new levels of storytelling and consumer experiences, activated when users swipe their phone over their product: "VeChain can be programmed with photographs, videos, and even personalized information such as the date [a product] was purchased and perhaps whom it was purchased for and why," said Qiao Ran Huang and Joshua Robert Hupper, founders of fashion-tech label Babyghost, who is also loading products with "Golden Tickets" for raffle wins. 

5. It opens treasure troves of data for marketers

With its ability to track and safeguard vast amounts of transactions, the Blockchain opens up treasure troves of consumer data for marketers to mine for actionable insights. ("Mining" is actually hardwired into the foundation of Bitcoin's value generating system). The result is a future in which marketers are no longer guesstimating the value of their initiatives, but will be able to precisely track where customers are spending their attention.

But it's not going to be free, either: Customers can already earn monetary rewards in return for their attention and engagement on the Blockchain-based social media platform Steem. What's more, they are not locked into one rewards system and loyalty program, but can freely exchange Blockchain-driven currencies on marketplaces like ShapeShift. Ultimately, the 'chain will bring more freedom to both marketers and consumers – and that's worth keeping an eye on. 

Want to read more about the digital disruptions changing marketing right now? Check out our blog post Five Digital Innovation Trends to Watch in 2017.