The journey of new technology to mass adoption is always bumpy. Blockchain seems to be the new buzz word on the lips of tech savvy entrepreneurs but how can it be applied in a way that is beneficial to the world of communications and marketing?
Many people are comparing the current evolution of blockchain technology to the mid 90’s when the world was warily watching the development of the internet. Then it was an unknown, hard to explain concept. People were sceptical about how this new computer network would impact their lives and whether the internet would ever deliver enough benefits to outweigh all of the privacy issues it presented.
In 1995 Newsweek published a now infamous article stating: "The truth is that no online database will replace your daily newspaper, no CD-ROM can take the place of a competent teacher and no computer network will change the way government works." Oh, how we can now laugh, but fast forward 23 years we’re seeing the same scepticism about blockchain as a ‘fad’ too.
Here, Lucy Mart, sport and lifestyle business director at Sports PR agency PrettyGreen and Alex Dreyfus, CEO and founder of football fan voting platform, Socios.com explain how they believe blockchain tokenization is going step-change sports marketing.
At a basic level, blockchain technology and tokenization (currently a term reserved for the crypto space), can be applied to virtually any industry where there is a transference of assets. The creation of digital tokens can be used to represent a stake in any conceivable asset and the benefits of doing this includes lower transaction costs, transparency, improved liquidity as well as shared ownership models.
Tokenization has already been embraced by a broad cross section of industries - from agriculture to photograph - mainly because of the innovative and transparent nature of the technology, but how can blockchain be applied to sports marketing?
2018 has seen the football world begin earnest experimentation with blockchain. Clubs and footballing bodies are committed to understanding and embracing blockchain technology, through changes to ticketing systems, partnership and sponsorship agreements and even buying clubs and players.
UEFA recently confirmed it had deployed a blockchain-based ticketing system as part of a phased rollout. Tickets for UEFA’s Super Cup match between Real Madrid and Atletico Madrid were successfully distributed to mobile phones via blockchain technology, in a move to make its sales process for matches simpler and safer.
The benefits of tokenization
Blockchain brings a level of unprecedented transparency to sports marketing that can benefit rights holders, sponsors, fans, players and other stakeholders, with potential benefits such eliminating illegal ticket touting practices, as well as the sale of counterfeit sports merchandise being mooted as a real possibility.
And a token economy is certainly in line with UEFA’s 2017 anti-match-fixing initiatives to combat corruption, fraud and money laundering, and blockchain can no doubt help (and ensure accuracy) with their directive to European clubs to release information on how much teams are spending on players wages and fees to agents.
How a token economy can increase fan engagement
Socios.com recently announced it would be working with top French and Italian football clubs Paris Saint-Germain and Juventus, to develop a blockchain-led mobile voting platform as part of their fan engagement strategies.
Socios.com is leveraging blockchain technology with the specific objective of increasing engagement between a football club and its fans, specifically building global rather than regional fan bases which will inevitability increase marketing opportunities for the club and its partners.
Tokenization of the football industry using blockchain will create an ecosystem whereby fans can purchase a branded club token, in order to join a network of likeminded fans with shared passions and beliefs. Every fan that is a club token holder will have access to exclusive services, ensuring their voice is heard by the clubs they love, through voting rights on certain club decisions, via the Socios.com mobile voting platform.
While ownership of the tokens will provide fans with access to exclusive content and experiences, rights holders and sponsors can also benefit from tokenization as a revolutionary new model of investment and capital generation; a model that provides a decentralised but soon-to-be regulated system for the propagation of funds.
What is clear, is that blockchain and the token economy provides solutions to many marketing issues facing the sports industry today. By forging a blockchain path within football, organisations like Socios.com can collectively educate and inform the millions of fans around the world that this technology will bring them closer to their favourite clubs and teams, while at the same time making blockchain relevant to rights holders and sponsors as a valuable mainstream digital tool for engagement just like the internet is today.
Written by Lucy Mart, sport and lifestyle business director, PrettyGreen and Alex Dreyfus, CEO and founder, Socios.com