Our industry is broken: how blockchain will impact marketing
This week sees the inaugural Advertising Week APAC come to Sydney. Almost 250 speakers across the world of marketing, sports, business and advertising will descend on Luna Park from today along with thousands of industry folk. Interestingly though, with over 80 sessions across three days, there’s not one which features the word blockchain in its description.
And yes I agree that for all of the hype, blockchain remains just another buzzword for many in the industry. But for those of us working with the emerging technology, there’s the potential for change on a scale that’s never been seen before.
What’s it all about?
There are a number of more refined and accurate definitions out there, but one analogy which I love for its simplicity is that blockchain is like Google docs.
It’s a shared document which anyone can update - unlike Microsoft Word which preceded it, no one party has access where you don’t know if it’s been copied, changed or has multiple versions. In this example it’s worth noting however, that all parties need to agree on changes before they become saved - making the doc immutable. Admittedly this is not my analogy, it’s William Mougayar’s. But it’s one that went down well with a room full of marketers at Interactive Minds Digital Summit last week.
Language in the crypto industry can sometimes be excluding, so I for one am trying to lose the jargon that can come with it.
Why change is needed?
Our industry is broken.
Tech giants want us to share every last piece of ourselves online - both in a bid to present advertisers with a full picture of their audience and also improve the useability of their own platforms. The problem is no one business has a holistic view. It’s what Mary Meeker referred to as the Privacy Paradox - online services can only become more personalised as we reveal more data about ourselves.
Last year it’s estimated that there was over $7.4bn of ad fraud - a brand issue which could grow to over $10.9bn by 2021 according to Forrester. That’s a lot of bots potentially watching your latest content campaign.
And media buying has been in the headlines since the 2016 ANA report which found a ‘pervasive’ level of rebates and other practices which lacked transparency. The whole reputation of those buying media has been affected. It’s lead to a follow-up ANA report finding 35 percent of brands moving programmatic buying in-house.
Where blockchain comes in
All on the block
What if every single product you bought from ice creams to SUVs were logged on a blockchain? The whole view of a customer could be attained. And even the attributed source responsible for each purchase. This is what we are working on at Beam. Through a permissioned blockchain, the value exchange is very explicit. Give an individual control and brands can incentivise consumers to share their data or at least parts of it with the network. Consumers will have full privacy control -studies have indicated that millennials are willing to share their data in exchange for something they care about.
Blockchain brings a reduction in hypothesising customer journeys. In marketing terms, brands will be able to fully measure which channels work best and quantify the impact of their budget. A greater picture of a brand’s audience can be built using accurate and transparent data. Targeting this audience becomes easier with their wider interests fully understood and measurable.
Where the internet removed the distance issue between us, blockchain removes the trust issue. Authenticating online metrics will become the norm. Already this year in Cannes, IBM iX announced its partnership with Mediaocean to tackle the issue of Ad Fraud. Bill Wise, Mediaocean CEO, said the partnership will help cut out middlemen who currently pocket 60 cents on every dollar in the form of an ‘ad-tech tax’.
The technology can also help weed out those bot-fuelled “influencers”, as the whole industry will become more accountable with the path to purchase being tracked.
At its essence, blockchain aggregates the group consensus. In supply chains the benefit for being able to have transparency over every level is clear. And in media buying it is the same. Transparency over what, when, to whom and how much is paid will be possible. The greater use of smart contracts, those that execute without the need of a third party, may impact the role of agencies even further.
No it’s not going to fix everything
I know there have been futurists touting blockchain solutions for everything from iced tea through to dog walking. But there are examples of big brands getting involved. Disney started Dragonchain before relinquishing control. HTC has confirmed the launch of its latest Exodus phone with CryptoKitties. Facebook has a new dedicated blockchain team and Amazon is already working on blockchain solutions for its clients with startup Kaleido.
Blockchain is not the solution for every problem. But where there’s a lack of privacy, security and transparency, it’s likely that a distributed system will probably work better.
Holly Stephens is CMO at Beam.