Blockchain And Its Impact On Marketing
Rarely before has such an abstract and complex concept grasped the public interest like blockchain. Perhaps fuelled by cryptocurrency Bitcoin, blockchain is a public transaction ledger that is now being explored by government, institutions, and enterprises for use cases far surpassing cryptocurrency.
Even in its description, blockchain feels technical. When the software first emerged, many were quick to dismiss it as the next buzzword, or just shrugged off the jargon. But 11 years after its creation by Satoshi Nakamoto, whose real identity is still unknown, the software has carved its way into society.
But what is it?
Many believe blockchain to be the enabler of crime, while others think the decentralized tool will save society from centralized power. Both ideas have had their fair share of headlines, but at its core, blockchain is just accounting software.
The database, which uses a key hashing system to make data immutable, is distributed and decentralized across a network of computer hosts–otherwise referred to as nodes– which ensures there is no single point of control, or failure. This is a huge plus for those with cyber security in mind.
Blockchain in enterprise
For enterprise, it’s particularly important. Private and public blockchains can benefit your business in many different ways, with its key features inspiring more customer trust and corporate transparency through added security and privacy, as well as efficiency through automation. But it’s not just business processes and customer relations that improve; the marketing department of a business using blockchain will also be impacted.
How blockchain impacts marketing
Data has always been valuable in retail. Consumer likes, dislikes, shopping preferences, demographic information, what brands are favorable, etc… All of this information helps to establish a comprehensive view of a person and is something that companies would pay to access, which they often do whether it’s from a third party or by offering consumers rewards for sharing information.
But because of the way blockchain works and its anonymity, companies won’t be able to capture information without the target knowing or associate it with a specific offline person, but rather a public identifier.
This has resulted in a rise of consumer-focused data management systems built upon blockchain, such as Wibson.
Phillip Hoey, Editor of Quotezone.co.uk, one of the UK's leading financial comparison platforms, said: “Blockchain begins to impact marketing quite significantly by disintermediating the media buying process. Some companies are also beginning to harness the blockchain as a tool to help consumers take ownership of their personal data, which is a major issue in the wake of GDPR legislation and could have a significant impact on any sector - though particularly B2C -, including retail, marketing, and the media industry.”
However, the software’s permanence is much more valuable to marketers than 'temporary' internet cookies, because they do expire. If a customer gives a brand access to their blockchain, which holds information that cannot be retrospectively altered, they can access a goldmine of insight over time.
Plus, being hyper-aware of your customer’s privacy will earn you a lot of respect. Explicit consent must be given by the user for marketers to utilize blockchain, and with data breaches being so common at the moment, this can only help your brand.
A different tactic, though a well-established in marketing, is to deploy a loyalty reward scheme. Loyalty points are already a digital currency. Currently, loyalty is restrictive and often frustrating as points are worth very little and boundaries for rewards often change.
But by adopting blockchain, customers can benefit from real-time liquidity, making points cross-sector and cross-border. This reduces complexity for both consumer and company, while enhancing brand exposure and balancing liabilities associated with reward schemes.
Proof of ownership
Large purchases like cars and houses can be recorded and verified as a matter of official record. As with luxury products, blockchain can help reduce the trade in stolen goods as any subsequent transactions will be identified.
Proof of ownership, resale and warranties help enterprises and customers alike. Tracking and tracing transactions also mean businesses can analyze and improve processes, while seeing where efforts can be streamlined.
Boost your brand
Marketing a fully accountable, transparent and ethically aware brand that can, to some degree, protect against theft of goods and provide swift customer service is far easier than one subject to scandal for being less socially conscious.
And so, while blockchain may make it harder for marketers to create in-depth buyer personas and spot trends on a mass scale, it forces departments to get creative and get to know their audience outside the data set. It also means that, for any brands looking to access customer data on the blockchain, you must earn their trust elsewhere first. Once you have that, you're rewarded with far deeper insights than before.
Information in this article was based on research from several industry experts, including representatives from Bitstocks, UBU, Blue Ocean Global Wealth, SimonBarry.tv, Sepior, Quotezone.co.uk, Block Matrix, CryptoKitties, Consensys, and Shufti Pro. To read more about it, download our ebook.