There's much talk about blockchain these days. You've probably heard about it or are already somehow involved in it. It is sometimes called the 'Internet of Trust', and it might well be a common standard for marketers in a few years.
You can probably argue that it still falls under the "buzzword" category and is subject to much hype. Still, it has rapidly been gaining ground in traditional processes in several industries due to its benefits. Being a disruptive technology that has made a somewhat noisy entrance is here to stay. What started as something dedicated to cryptocurrencies and NFTs has since been jazzing further into the halls of, e.g., the healthcare and transportation sectors. It is now gradually changing the dynamics in the digital marketing and advertising field. Will it be embraced as a standard technology? Time will tell, but digital marketing is usually flexible, fast-paced, and keen to adapt to new and innovative technologies, so it shouldn't be surprising if blockchain claims its place also within this segment.
To quote the CEO of IBM, Ginni Rometty, from 2017:
What the internet did for communications, blockchain will do for trusted transactions.
Blockchain technology has, in many aspects, had a positive impact in areas where it's been tested. It has, for instance, received a warm welcome in the healthcare sector regarding security aspects. According to HIPAA, the US saw a report of 692 significant healthcare data breaches from July 2021 to June 2022. That puts the spotlight on trust and security more than ever. Any technology that can solve or ease these pains should be appreciated by anyone involved in making the data more secure. Not only are data breaches bad for individual integrity, but they are also costly. It was estimated to be USD 4,35M in the US in 2022.
In the transportation segment, blockchain technology has often been successfully combined with the supply chain, creating a structure of solid links. This has given the industry the advantage of speeding up orders and deliveries and automating various processes. These factors, combined with more secure transactions, are all positive cases for blockchain. The freight giant Maersk is one example of a company using blockchain to speed up its delivery process. In their case, it has been used to digitise transport documents, enables cost reductions in operations and increases data security, transparency and unchangeability.
Blockchain is an online ledger, first conceptualised in 2008. It uses an open, distributed record to keep track of transactions, which can be actions like trading cryptocurrencies or sharing medical information. What makes it secure is that it doesn't rely on a single, central point of control but on a broad network that verifies, validates, and approves all the transaction blocks on the chain, complete with timestamps of every transaction. You also can roll back to previous versions since the information is there forever. When a blockchain is stored on hundreds (or more) of computers spread out over the globe, the decentralised system that makes the system so secure is created.
The features of blockchain technology can do wonders for data transparency and enable digital marketers to access accurate leads and promise a better and more reliable customer experience. Data drives marketing, so blockchain and marketing could fit very well together if the combination can promise more reliable data.
Implementing blockchain in marketing allows brands, their prospects, and customers to have a more trustworthy relationship. In addition, fewer companies will handle the shared data since there is no need for middleware, meaning less need for third parties. However, I'd like to point out that from a GDPR compliance perspective, you need to be careful of what data you store on the blockchain. It's up for debate how compliant these systems sometimes are in, for example, the event of an individual asking for the deletion of their history since, by design, blockchain data is not possible to delete.
With data breaches continuing to rise in number, protecting customer data is always a top priority. And with the increasing value of data, digital assets become more vulnerable to breaches. Users want to know who has access to their personal information and how it's being handled. With blockchain, users could choose to anonymise their data or sell their information only to companies of their choice. This might sound not good for brands, but it isn't necessarily the case. Instead, it would allow companies only to spend their budgets on interested audiences, reducing wasted investments.
Another interesting use case is viewing ads as an opt-in service, exchanging views for tokens or user rewards. The browser program Brave is one example of this. They offer users a solution to the problem of being followed online by blocking privacy-invading ads, trackers and third-party data storage. This improves, for example, the loading speed of the sites the user visits. For those not only in it for privacy, there are also options to level up for more advanced security and earn tokens for your attention. Or, to simply put it in their own words, "Default privacy. Optional rewards". There are, of course, disadvantages also in this case, like a lack of extensions and plug-ins, so as always – remember to keep a critical eye open.
Brands who keep their processes transparent tend to be the winners when building brand loyalty, so blockchain has much potential to find use cases among marketers who want to create a safe, reliable and open relationship with their customers. The possibility of keeping a transparent track of the content distribution ecosystem benefits both consumers and creators. For example, a public blockchain can be a good way for content creators to share and spread their work while getting paid.
Since blockchain provides traceable open-source storage, it offers advantages such as decentralisation, security and unchangeability. This enables more seamless communication, locally and globally. Companies can therefore have a high level of protection for recording and storing consumer data. Once the data enters a block on the chain, it can't be tampered with or deleted. Ever. A single entity cannot control the blockchain's multiple nodes and bring it down. Other nodes will catch missed transactions even if a single node should get lost.
You gain a lot from a security perspective when using this technology. It can prevent fraud, it doesn't require middleware, and data cannot be stolen, sold, or compromised. However, it can be controlled in some cases. That situation might occur when a company owns over 50 per cent of the nodes and thereby get an advantage in managing the data traffic.
Are there downsides? Yes, as there usually are with new technology. The most notable ones ought to be the cost and sustainable impact parameters.
Implementing blockchain in digital marketing can be rather costly. Most blockchains require the Hyperledger feature, which is expensive and means that you must be ready for a significant investment.
Then there is the energy consumption factor - recently, various cryptocurrencies have received much negative press due to the large amount of electricity consumed during mining. But on the other hand, blockchain can also help fight climate challenges. For instance, please take a look at the exciting suggestions Future Thinkers has outlined.
Nevertheless, blockchain also comes with several strengths that should be considered. It's easy to discard new methodologies and technical innovations that one might need to fully understand because it's uncomfortable and requires energy and attention. And it takes a lot more when you wake up to the possibilities late. By then, you want to have decided whether to join or skip the party before it takes off.
Blockchain will probably change how we interact online and enable you as a user to keep your private information safe and secure. Many potential use cases exist to explore and evolve, like loyalty programs and targeted advertising.
Some final things to remember - a blockchain is still just a tool. It can only sometimes solve the underlying dynamics that build the trusting bond between people. It also remains to be seen how to use the technology for digital marketing and media, how content should be put on the ledger and what the incentives should be.
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