Chain Reaction: How Blockchain Is Infiltrating MarTech
Venture capital firms have invested more than $1.4 billion in blockchain since 2013, and more than 2,500 patents involving the technology have been filed in the same time frame. The implications for the financial world here are more obvious, but what does this trend mean for marketing? More than the average marketer may think, as it turns out.
Blockchain is the distributed ledger technology (DLT) behind bitcoin, the digital currency that’s used with encryption methods so that transactions are made without a middleman (banks). These days, businesses offering everyday consumer goods and services are increasingly accepting bitcoins. While Bitcoin was the first currency to be applied to this DLT strategy, it’s not the only currency that can be.
With Blockchain as the backbone of bitcoin, transactions are extremely fast and secure, all while being transparent. One blockchain analyst has compared it to a Google Doc, with our mainstream system of transactions being a Microsoft Word document. The ledger is shared for all to see and updates automatically every ten minutes, all while being incorruptible.
Considering these strengths, it’s only a matter of time before blockchain technology changes the marketing landscape as we know it. Here are three realms that may see changes due to blockchain technology in the not-so-distant future.
The idea of blockchain is already being applied to the world of ad buying, and isn’t so far away from being implemented on a larger scale. Nasdaq announced that in late 2017 it will launch an electronic marketplace using blockchain technology for the New York Interactive Ad Exchange.
The ledger will allow publishers, advertisers and media buyers to buy and sell ad space via an electronic marketplace. According to the NYIAE CEO Lou Severine, if this takes hold the way it’s intended, companies could implement the model across different forms of media including TV, radio and out-of-home markets.
According to Accenture, U.S. marketers are spending $90 billion on non-cash rewards for loyalty programs annually. Yet, millions of points within consumers’ loyalty apps and programs are lying dormant. Suffice it to say the loyalty industry could use a shake up, and blockchain could provide the added level of convenience that loyalty programs need.
Blockchain will create a frictionless experience for customers of loyalty programs. Many existing loyalty programs and networks have complicated policies via “smart contracts,” which designate how many points can be used for what business and when. Blockchain can understand these rules and implement them automatically. Plus, it’s usable through mediums like digital wallets and social media, completely unifying the multiple loyalty programs customers may subscribe to and easing the user experience.
Marketers are nothing without data, and blockchain will allow for the purest and most complete set of customer data possible. The technology will reveal the complete history of a customer’s purchasing habits, timing, likes, dislikes and more.
Our transactions reveal so much about what’s going on in our heads, and blockchain enables marketers to get their hands on this data without compromising the security of their customers. All data is encrypted, protecting consumers, and marketers can count on the fact they’re getting 100 percent accurate data, as those outside of the individual transaction cannot alter blockchain. It’s a win for all parties involved.
The full adoption of blockchain into the marketing world is imminent, but of course it won’t be without hiccups, as with any early innovation. For example, scaling the system is hard and takes a huge amount of computing power. Additionally, the lack of hierarchy in this decentralized technology can create confusion in early stages where there are no figures of authority to determine regulations and rules of use.
However, with the rate at which those in marketing are jumping on the blockchain train, it’s clear the industry is committed to weathering the early rough patches to reap the benefits of this new and unique technology. Planning ahead for this sure-to-come disruption is a step martech execs should be addressing now. Is your firm prepared?