Blockchain is probably best known as the technology underpinning bitcoin, but marketers see possibilities for it beyond finance.
Blockchain, essentially a massive ledger of transactions, is an open and shared database that operates in a decentralized network format. That means large amounts of information can be transmitted and added onto it without compromising security. Nobody can alter the blockchain, and no single person can destroy it.
Blockchain has been proven useful across finance — for currency transfers and secure data applications — as well as in tracking objects such as tuna to see if it was ethically fished. But its application to marketing shows potential.
First, a caveat: Any potential use of blockchain in advertising is, according to experts, at least four or five years in the future. There is little happening in the area yet, with the notable exception of BitTeaser, a Danish ad network that uses blockchain to collect ad revenue in bitcoin instead of money.
“The way I look at it, it’s basically a ledger, a highly decentralized ledger,” said Dave Morgan, CEO of Simulmedia, whose investor, Union Square Ventures, recently announced a major blockchain investment. “So it’s good for problems that are easy to solve on an individual level, but hard to compute overall.”
Phil Gomes, svp of digital at Edelman, said marketers need to start with this question: “What do you think you can do if you and your stakeholders could operate from a single immutable place of truth?” — that is, if you knew that the data you were seeing was real?
Turns out, a lot.
Here are the four ways execs think the media industry could use blockchain.
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Trust in advertising is at a low point. Blockchain could be used to detect whether ads are being delivered and if they’re going to the right place, say experts. For example, Morgan said the issue with auditing ad deliveries is that doing it centrally — that is, with a Deloitte-type figure involved — can get very expensive.
Decentralized auditing is cheaper, and can work. A brand could take ad deliveries from an ad server, then release them to the mining machines in the blockchain, which would then be able to analyze them, and scrub them for fraud. So simple “footprints,” like a non-live browser supposedly seeing an ad, can help a brand figure out if the ad delivery happened. “It’s a way to have massive change,” said Morgan. The more interesting use is if those frauds can be identified and blacklisted in real time.
Corporate social responsibility
Gomes said that in PR, corporate social responsibility is discussed often in a narrow context of communications — a company says it’ll do something and all anyone can do is take their word for it. But the promise of blockchain is that it combines accountability with CSR. Blockchain is already being used, for example, to verify authenticity of product. For brands, it can go another step: Use that information in marketing. Gomes also said that he is bullish on using blockchain to create “digitized promises,” or contracts that brands can sign when it comes to CSR initiatives like sustainable practices. The blockchain makes that promise public and accountable.
At Shanghai Fashion Week in October, fashion label Babyghost worked with VeChain, a blockchain platform, to let customers “verify” a selection of handbags. While this clearly works to prove authenticity, in the case of Babyghost, customers could also scan the tags using their phones to find a “story” of the product — where it’s from, who previously modeled it, and so on.
“Imagine that each garment now goes from being one of many to a one of a kind. It can literally speak to our fans similarly to the way that we love communicating with them via social media,” Babyghost founder Qioran Huang told FashNerd. “What VeChain has done with Babyghost is bring digital experiences to their consumers and enable them to build up a personalized connection with the products they own.”
The idea here is that blockchain can be used to advertise a product in a much more “authentic” way that doesn’t come off as marketing.
Managing consumer data
Morgan said that in an era of privacy concerns, the blockchain gives marketers a nice way to anonymize large amounts of data (so you’d see it on a network level but not attribute it to individuals) and still use it for brand-building. Many brands are now seeking direct connections to customers and are intent on removing the middlemen when it comes to data. The blockchain would be a way to maintain transaction data in a highly decentralized way so it’s both secure and massive. “Blockchain ultimately anticipates that we’re going to see a future of publicness.”