Blockchain, why should marketers care?

Blockchain, the technology behind digital currencies like Bitcoin, is quite possibly the biggest internet milestones since Web 2.0 and the barrage of innovations that followed -such as artificial intelligence, big data, robotics or even self-driving cars. It represents nothing less than the third generation of the Internet, and it holds the potential to transform money, business, government and society.

The internet was built to send and share information. Whenever we send a JPG, PDF, or PPT we’re actually sending information not value (in the way that trusted institutions within governments assign value to their paper currency). What the other end receives is a simply a copy of the thing you sent. Then, provided they have the right permissions, they can print, share, or store it. This is why its illegal to print money at home.

In our information society we’ve had to rely on large intermediaries to create trust to generate value. Banks or governments have to jump hoops in order to establish your identity, and the necessary credentials to transmit value vs information.

Blockchain is a native distributed peer-to-peer network. It takes the problem of trust and moves it into the form of a globally distributed computations and heavy duty encryption. The trust lies in the fact that its not centralised; not any one group or institution owns the validation. Instead, the trust is built into the network and hard-coded into the platform.

Blockchain is the decentralised, globally distributed ledger of transactions for a particular asset type or class. Bitcoin is one type of asset, a currency.

Its estimated that by 2020 there will be close to 70 billion connected smart things sensing, responding, sharing, generating, trading, protecting, and managing our homes and our health. And this Internet of Everything will need a trusted network of everything.

So what do we do as marketers, and why should we care? Here are three things that make this a compelling strategy and narrative;

Trust — In its simplest form the Blockchain can hold parts of your personal data that you are willing to share anonymously with the right brands. The brands you trust would be held on the blockchain. This could include brand purchases such as a vehicle, or a dishwasher, being shared with other trusted brands. In exchange, said brands would let you know about associated services and goods -from insurance to cleaning tablets — that are specifically relevant to that purchase and by extension you. And all the while, you remain anonymous and in control.

Adding Blockchain to the ever growing ecosystem of IoT devices allows each of them to remain connected to the cloud, and each other, but only sharing what and with whom you decide. So the consumer no longer has to remember 200 passwords, one for every device.

For example, in the management of your vehicle. The technology would drive all the apps that monitor gasoline usage, or engine performance. If a problem is imminent, or you’re running out of gas, it can then match you to a service station that its close to where you are most likely to go. It could link your behaviour or current conditions to vehicle insurance products and in real time adjust automatic insurance cover based on various performance and geographic data. Furthermore, these could all be combined to ensure the advertising shown on your mobile, in-car entertainment system, at-pump tv or any other connected device is completely tailored. The blockchain provides a secure, distributed platform for all this data.

Content Programming — With the ability to store a digital work in the blockchain, you can ensure that ownership remains with the creator. This creates a secure way for creators to register origin of work, set sharing permissions, and structure the means of exchange that they’re willing to accept — for example payments, trade, or whatever.

What if a writer only wants 1,000 people to read a story, and wants to vary the price for reading by geographic location or time of day? What if the writer shares a a portion of the revenue with fans that act as co-creators — annotating and making notes to enrich the story?

In the future content blockchain can make consumption, paying, and revenue-sharing all happen in the background, just the way the telcos are able to charges us for minutes spent in conversation.

In advertising and media what does each party bring to the exchange? The brand brings money, the media company brings content, and the consumer brings attention. The consumer ultimately gives up some attention for the privilege of consuming content. Given the rise of ad blocking, cord-cutting, and direct messaging, its easy to reach the conclusion of how ineffective a system we support.

Imagine a future that consumers have independent relationships with brands and properties. These brands could issue “brand-tokens” that hold micro-value and that are only valid for payment on specific content platforms or media sites. The consumer would then exchange these when they are ready to consume the content. Then media companies could facilitate the transactions eliminating the failing system of either/or paywall vs no paywall.

Bypassing the middleman — By removing the need for complicated trust networks, many of which are served by the brands themselves, you allow the creation source to become the ultimate distribution source. Why go to a retailer or online store when you can buy the same product directly from the manufacturer? The exchange happens in the Blockchain, removing the middle-tier trust need, and allowing the exchange of value.

The potential removal of the middle man, the increased expectations of consumers around value, and the new models of ownership that the blockchain affords, will transform the role of brands. Marketers need to work out how they fit into this new world and think hard about how they might use the blockchain to enhance their value proposition to customers.

By extension, what if brands went directly to consumers? In exchange for early adoption or testing, you can offer shares in a brand or direct payments. Brands could do a type of Kickstart directly to consumers, and will therefore no longer need to source an audience through a 3rd party. They could go to them directly.

In nature nothing stands still you are either moving forward or slipping backwards. If our plan is to remain a thriving industry then we better be willing to re-evaluate the fundamentals. This is as true today as it was in the late 1990’s and the advent of Web 2.0. In advertising as in banking Blockchain can help define the new blueprint.