The Essential Guide to Blockchain for Brands
Confused by blockchain? You’re not alone. Read on to learn why marketers should be paying attention.
We are excited to announce the first round of leaders who will bring our 2020 theme HUMAN.X to life at the Broad stage this June (17-18).
What is blockchain?
Blockchain is a decentralized digital ledger that facilitates electronic transactions. One common myth is that blockchain and cryptocurrency are one in the same. In fact, cryptocurrency transactions are just one use-case for blockchain technology and blockchain can power a host of other types of transactions and records, including contracts, medical databases, advertising exchanges, and, someday, maybe even voting.
So, how does a blockchain work? Transactions appear in chronological order and each added record is referred to as a “block.” At its core, blockchain technology enables information to be created and shared within a decentralized peer-to-peer network, in which the individual users bear responsibility for keeping the ledger up to date.
Image via BlockGeeks
What does blockchain have to do with marketing?
Traditional advertising was built on the role of the “middleman,” in which companies relied on agencies, networks, websites, and platforms to distribute targeted messages to their most relevant consumers. As marketing has become more complex and data-driven witht the advent and maturation of digital media, these intermediary partners have proliferated. Given all of the disparate groups, each with their own interests and objectives, the ad industry has faced a series of challenges as of late with respect to transparency and efficiency.
If one of the fundamental challenges plaguing marketers is transparency and an overly distributed process for creating, buying, and selling ads, then the blockchain and its decentralized technology could stand to disrupt the advertising world in powerful ways.
Building a more streamlined marketing model
In particular, blockchains could dramatically change the media buying process by usurping the dominance of Google as a search engine. Consider a new type of database, built on blockchain technology, which could enlist “public big data algorithms” to capture consumer behavior. As a result, marketers will have the opportunity to interact with and pay their targeted audience directly to view their ads, and in turn, pocket the money that otherwise would have needed to be budgeted to go towards an intermediary.
Moreover, decentralization could reduce the number of partners in the marketing process, allowing brands to streamline data sources and build more robust profiles that provide deeper insight into the buying habits and preferences of their customers. Armed with more complete data profiles, marketers could target the consumers with the most propensity to buy and avoid waste. This reduction of partners would fundamentally alter the landscape of a marketing world that is flush with speciality agencies, data providers, data measurers, ad networks, platforms, and more.
Ensuring accurate and transparent measurement
There are also blockchain implications regarding measurement, a perennial hot-button issue in the advertising world. Marketers want to know that their investments are working and relying on various measurement strategies to calculate ROI. The challenge is that data that’s reported via agencies and platforms can be difficult to verify. Blockchain technology could help here by ensuring more trustworthy metrics with respect to viewability in particular.
Due to the transparent and encrypted nature of a blockchain, companies can bypass the headaches of figuring out true engagement versus artificial clicks or shares generated by bots. With a more firm understanding of target audience impressions, marketers can better protect themselves against ad fraud by being able to budget more strategically and accurately when it comes to annual ad spend.
Increasing supply chain visibility
Also under the umbrella of transparency, supply chain processes will be much more visible through the use of blockchain. Specifically, a ledger can track and store such details that include where exactly a product came from, beginning with the retailer, and whether it’s authentic or not.
One example of a company already employing such tactics is the fashion line Babyghost. Babyghost customers are not only able to scan the tag of an item and gauge where it came from and whether the piece is genuine, but even who has modeled it in the past. Consequently, items assume a special personality that makes it stand out from the rest. In this case, the retailer is using blockchain to build trust with consumers and strengthen the brand via meaningful and transparent relationships.
Write for Us
Interested in sharing your ideas and insights with the world? Become a SMW News contributor and reach 300k readers each month.