Everyone is talking about blockchain technology, but what exactly does it have to do with marketing? According to some people, it’s the next big thing that will change the way we do marketing. I think the jury is still out on that, but the possibilities it brings are intriguing.
If you want to understand what blockchain technology is, I can suggest a ton of resources, including some interesting discussions here on Diginomica. I am also a newbie trying to wrap my head around this technology and what it means for marketing. What I do understand is that blockchain is supposed to help resolve the struggles marketers have with privacy, trust, and transparency.
It’s supposed to help create better customer experiences by giving us a true 360-degree view of the customer and more confidence in the integrity of the data used to deliver those experiences.
Blockchain is as transformational as the Internet?
If you ever have a chance to talk with Jeremy Epstein about blockchain’s role in marketing, take it. As the CEO of Never Stop Marketing, he not only provides marketing services for blockchain startups but is considered one the foremost experts on blockchain and marketing.
Which is why, when I wanted to understand the relationship between marketing and blockchain better, I reached out to him for a chat. We were joined by Donny Dvorin, GM, Research & Insights Unit at Never Stop Marketing.
New technology arrives and changes the way marketing is executed. Radio, TV, Internet, Social, Mobile – have all affected marketing in some way. Epstein sees blockchain as transformative as the Internet was for many reasons, in areas like advertising, loyalty, customer experience and data management, but essentially he said it’s the “disintermediation of third parties as trust brokers allowing for the peer to peer transfer of value at amounts ranging from super large down to super small for very low cost.”
In September of 2017, he created the first blockchain marketing technology landscape with a few vendors. In late February of 2018, he produced version two of the landscape and saw a 400% increase in the number of vendors in the market (he also said many more came after they released the second version that they didn’t even know about).
From a blog he wrote introducing version two of the landscape:
The arrival of crypto technologies, such as blockchain, will have an impact on the function of marketing as big, if not bigger, than earlier disruptive technologies such as TV, Internet, Social, and Mobile.
Graphic from Epstein’s blockchain marketing landscape
Marketers don’t need to understand how blockchains work, Epstein said. But they need to know the value they will get from using the technology. They also need to understand the market and what blockchain vendors are bringing to the table.
You do need to understand how smart contracts work, how value is created in a decentralized economy through a token economic system. Those are not simple concepts, and it does take a little bit of brain power. But understanding blockchain particularly is not important.
Four ways blockchain could disrupt marketing
Epstein authored an ebook, “The CMO Primer For The Blockchain World” that provides a look at how blockchain will affect marketing. It looks at a few different areas including branding, advertising, commerce, loyalty, data, and management. It’s a good read with examples of blockchain software providers working in each space. I’ll share a couple of these below.
This is the area that Epstein and others see as “ripe for disruption,” and probably the first area we will see blockchain really affect marketing. The advertising industry is full of intermediaries; a marketer never has a full end-to-end view of what’s happening, and they are often spending a lot of money yielding lackluster results.
At an execution level, advertising is the easiest to understand. Intermediaries taking their cut of the money, there’s rampant fraud, poor reporting and high costs; clear indicators there’s a problem. Epstein said they found the heaviest concentration of blockchain startups were in the advertising space when they completed the first the landscape.
What if you could improve the advertising supply chain by bringing transparency and accountability to the entire process of buying digital advertising? Remove the middlemen from the picture? Blockchain will change how you purchase, deliver, measure and value digital advertising.
An example from the ebook:
NYIAX (New York Interactive Advertising Exchange) claims the world’s first advertising contract exchange. They are using NASDAQ’s blockchain technology to combine a financial matching engine and trading concepts with advertising technology. The goal is a transparent marketplace for buying, selling, and re-trading of future premium advertising inventory as guaranteed contracts. They expect fees to lower as the number of intermediaries goes down to one.
Other examples included solutions from AdChain, MadHive, and AdShares.
Brand and trust go hand in hand, which means a verifiable supply chain can be a critical element in your value proposition. For example, simply saying you donate money to charity is one thing, showing you do it is another. Proving you believe in equality by showing the actual percentage of women employees you have or proving on-budget, on-time deliverability rates means more than telling people. It’s that premise of ‘show don’t tell’ that drives trust.
How does blockchain built trust in a brand? Blockchain is focused on data integrity and transparency, even if it’s in a private blockchain, so employees and customers or partners will see the truth in what the brand is saying.
Loyalty programs are another area where some interesting things can happen using blockchain technology. Think about how many loyalty programs you are a part of. Do you really benefit from them (or does the brand benefit most by getting your data?). My experience is like many others; it takes a long time to earn enough points to get anything of great value. I use a card at a local grocery store all year long, just to save $100 in groceries at the end of the year.
Epstein suggests that blockchain can support loyalty program interoperability, so you can exchange points with partners (easier than you can today). Also, “in a blockchain-enabled world, ownership of perks can be easily tracked, transferred, and fine-sliced into bits for micro-redemptions, providing greater options for customer satisfaction in an expanded rewards ecosystem without increasing costs.”
Loyyal, Blockpoint, and TamTam Travels are examples of blockchain vendors in this space.
4. Marketing data
Today, data is considered the competitive differentiator for organizations (at least those who use it wisely). But what if data became a commodity and the real competitive differentiator became interpreting the data?
In a blockchain world, there is a shared data layer, where customers willingly share all their data with multiple brands. Now everyone has access to the same information about the customer. What differentiates one brand from another in this scenario, is the AI capabilities built on top of that data and insights it brings. Now the questions you ask become much more important.
Beyond data integrity (which is a huge component), the shared data layer that blockchains will introduce creates an entirely new set of possibilities for marketing AI capabilities and insights.
The future of martech
Is the future all blockchain focused? Will organizations and today’s martech vendors have to adjust how they work and all their existing martech technology to the blockchain architecture?
Epstein doesn’t have an answer. We are just scratching the surface of possibilities. But he does believe there will be interoperability, and both will exist for a long time. As the systems get better, you will see migration. But he said it wouldn’t be needed everywhere so the ability to work together will be critical.
Dvorin told me that blockchain is one of the top five things Gartner’s customers are asking about. In his talks with CMOs, there is a drive to hire people in business development to help them understand how blockchain technology will interact with current business systems because they know it won’t support itself for a while.
He also said there are a lot of enterprises dying to test the technologies, but it’s not quite there yet. The money is there though, and we should expect to see the technology ready for testing in the next three to twelve months.
Epstein sees two phases to technology adoption. The first phase is where people see the technology, and they say “wow.” They can use it to do what they are already doing, just better, faster, cheaper. And he said that makes sense, but that’s not the real game changer.
Phase two is about making the impossible, possible (think Facebook, Instagram, Uber). During this phase, you see a realm of new business models that weren’t possible five years ago. If enterprises still focused on phase one aren’t paying attention, some new company will come along and find that new business model that will disrupt the way things are done.
This technology adoption model fits blockchain perfectly.
I’m fascinated to learn more. This is a bleeding edge area of marketing where potentially great things can happen – if it comes to fruition. Reading Epstein’s ebook and talking with him and Dvorin shows me the potential opportunities to improve marketing.
My next step is to talk to a few vendors in this space and understand what problems they are trying to resolve and how their work is going. Dvorin has also offered to share the results of his research in a few months to give us even more insights into how things are moving along.
Blockchain isn’t going to transform marketing today, and probably not for many years to come. But it pays to stay on top of what’s happening because these things tend to sneak up on you when you’re not looking.
Image credit – Feature image – Girl holding a signboard with a question mark by @yavyav, from Shutterstock.com. Blockchain marketing vendor landscape graphic credited above.
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