Blockchain technology has only been around for about 10 years, but it’s already revolutionizing the financial industry. It also has enormous potential in other business sectors, including marketing. Although speculation has started, its full implications for advertisers remain to be seen.
So what is blockchain?
In the most basic sense, blockchain is a glorified ledger. It keeps track of records and transactions as part of a decentralized network of servers (usually thousands of them), maintained by a community of people who oversee their own little piece of the network. These transactions can involve any type of asset class you can imagine, but today, blockchain is mostly used by cryptocurrencies like Bitcoin and Ethereum. With cryptocurrencies, people who are part of the blockchain network are paid in units (e.g. bitcoin) as an incentive for helping operate the network.
The way blockchain works is that each server on the network verifies every single transaction that occurs. Each transaction is a block: data that everyone on the network can see. Since verification is required by the entire network of the blockchain, it makes manipulation or corruption of data almost impossible. Blockchain doesn’t have security weak points, and nobody is in charge of it. On top of that, it can virtually guarantee that a transaction will never be missed. It will be permanent, and the record of it will be error-free.
What’s the potential for marketing?
It’s easy to see why blockchain is ideal for cryptocurrencies. But with some creative thinking, blockchain might completely change how people think about marketing. One example is through verification of ad delivery: Blockchain could be used to show when, where, and how ads are being delivered with perfect accuracy—a sort of decentralized audit that would be faster and cheaper than hiring a consultant.
Another practical use for blockchain is to track agency records. Marketing is an industry with lots of invoices, payments, contracts, and agreements. That means errors are made and things slip through the cracks. But a blockchain network created for advertisers could help eliminate these errors while lowering administrative costs. Blockchain could also be used for “smart” contracts, which are carried out automatically once certain factors are met.
Uses for blockchain in marketing can be a little less practical—and more interesting. Take the fashion label Babyghost, who recently used blockchain technology as part of a rollout for a new clothing line. In order to tell the “story” of a unique piece of clothing, Babyghost embedded a tiny microchip that could be scanned using a smartphone. The scan used blockchain to show who originally modeled the piece, and can track the sale of the garment throughout its life. Not only is this interesting to the consumer, it also helps verify the authenticity of the product—something that could be huge for retailers of high-end or one-of-a-kind items. Think sports cars. Or wine. Or art.
Loyalty programs and reward incentives are another possible use for blockchain. Businesses could, in effect, create their own currencies that are entirely digital—and provide unique rewards every time people use it. It would be an easy way to create “captive” customers who remain loyal to a brand because of convenience and savings.
Marketers could also help companies use blockchain to show off big quantities of data. Because blockchain is transparent and reliable, companies could show consumers and stockholders sales trends, performance metrics, and demographic data in real time, and do so in a trustworthy way. This could be huge for building brand confidence. And since blockchain data is anonymous, there aren’t privacy concerns.
A healthy knowledge of blockchain is important in this rapidly changing world of digital marketing. Because even though we’re still in the initial stages of blockchain technology, there’s no doubt it’s here to stay. If you can find ways to leverage it to your advantage, you won’t just have a big leg up on the competition—you may revolutionize an entire industry.