How do you keep everyone honest in a decentralized marketing ecosystem?
Trust is one of the most important fundamental pillars in any relationship. Marriage, businesses or friendships: they all require trust. And honesty goes hand-in-hand with trust. Unfortunately, the marketing industry and trust haven’t always had the closest of relationships. Don’t get me wrong, things started off well. Long before ad tech took a creepy turn into the likes of personalized programmatic advertising, marketing was spread by word of mouth. People shared honest recommendations with one another about bakers, or ironmongers, or druids…probably. But that was before we entered the digital age of distrust. Before fake news. Before Cambridge Analytica. Before GDPR. Before fake followers and bots. Before ad blockers. And before marketing and consumer trust had a total breakdown in communications and filed for divorce.
Rekindling the relationship
Trust cannot be built in a day. You can’t demand or prove trust; trusting someone is a choice that you make and it requires a mutual commitment. The same is true of marketing. If the trust is to be regained then it needs to start with a mutual commitment from brands, platforms and even consumers to clean things up and create something honest. It might sound strange to say that consumers have any responsibility or accountability towards creating a better marketing model, but let’s not forget that they were the original and arguably best marketers. People are more likely to trust one another’s recommendations over those of a brand. Think about how integral the review sections are to sites like eBay and Amazon. If these can be incentivized and scaled — without compromising their honesty — then consumers can once again reclaim their leading role as the best marketers.
Decentralizing the model
Much of the current distrust in marketing stems from the fact that many of the services we used online were never free, though they may have appeared that way. Instead people paid for them with their attention, giving rise to platform monopolies built on mountains of consumer data that in turn enabled ever-more sophisticated targeting of increasingly invasive ads. Queue ad blockers, banner blindness, the great Facebook exodus etc. etc. Consumers are frustrated and brands and advertisers are hardly winning either, stuck in a seemingly futile battle with transparency and fraud issues.
Centralized solutions aren’t working and many now see a powerful opportunity for blockchain technology to step in. That isn’t to say building yet more centralized solutions under the guise of blockchain, but actually deploying the technology to establish decentralized systems.
Designing a decentralized marketing ecosystem
We recently published the WOM Economy Paper, authored by blockchain economics designer, Daniel Wingen, and token engineer, Stefanie von Jan. It provides the first in-depth look at WOM’s token economics and decentralized marketing ecosystem. The goal of the WOM project is the establishment of a blockchain-based protocol that — without any one central party exclusively profiting from the collective value created — gives brands, content creators, publishers, and platforms an alternative marketing method.
The protocol enables the monetization of word-of-mouth recommendations on any app or platform and is designed in a way that bakes honesty and trust into its core. It achieves this through the use of incentive mechanisms that align each party and ensure that everyone acts in the best interest of the WOM ecosystem.
WOM resembles influencer marketing in that it enables content creators to share product recommendations and become influencers in their own circle of influence, no matter how big or small. However, it also differs from the current influencer marketing model in several essential ways. As mentioned previously, influencer marketing has not escaped the general breakdown in trust felt by the wider marketing industry. Issues such as follower fraud and a perceived lack of authenticity have done little to help its reputation. But word of mouth, which sits at influencer marketing’s essence, is both powerful and effective, providing people can trust both the words and the mouth. In designing WOM we therefore needed a way to preserve this trust.
Consumers that want to help WOM clean up marketing can choose from two main roles. One is the creator, the imaginative mind with ideas and concepts that need a creative outlet. Second is the curator, the regulator who craves for stimulating content and is able to objectively rank how authentic a post is. Both have the opportunity to earn WOM Tokens for their participation. At first, to take part in either of these roles, a stake of tokens will be necessary. Putting skin in the game creates an incentive for both parties to stay honest and true to their role. For example, if a creator uploaded content to the WOM ecosystem that felt fake or didn’t relate back to a product recommendation, then the curators would give this a lower rating. Lower-ranked content will not be seen by other consumers and the creator’s staked tokens will be lost. On the flip side, curators’ scores will also be judged collectively, meaning that any rankings that deviate greatly from the general consensus of other curators will be deemed invalid and inappropriate behaviour. This can also result in the curator losing their staked tokens. Stimulating and engaging behavior will allow both sides to reap the biggest rewards. And the more someone plays well, the bigger their reputation will become. Players with a higher reputation will be rewarded with more tokens for the same actions, giving their profile a higher influence over others.
Similar to how blockchain technology uses its own users to make a sophisticated ledger system, here users act as the validators and curators themselves, cutting out the need for one authoritative figure. It creates a more diplomatic and fair environment to be part of that encourages participants to be as honest and authentic as possible. Generation Z have been the unwilling participants of an unfair media battle for many years, being constantly bombarded with advertising, and more often than not supplying platforms with the lion’s share of the best and most creative marketing content for free. We believe that the future of marketing is ad-free. And the only way to get there is to build a system that revolves around trust. To get a more comprehensive outline listing the specifics of how the WOM token will operate, you can read the full Economy Paper.
Keeping people honest in any given situation can present some problems especially with people you don’t know. Add the anonymous factor of an online presence and you can see how this presents a problem. However, with the right measures in place, we believe that rewarding good behavior and discouraging bad with a preliminary staked measure of tokens will allow the system to be kept not only a place of trust, but a platform to review any form of product in an honest, non-commercial environment.
