10 months ago on
Blockchain is the technology underlying crypto-currencies like Bitcoin.
However, it has the potential to change every industry and every function of a business. The technology which is still in its early stage is all set to change the way we work, transact and sell.
Here is a simplified explanation of blockchain:
“Blockchain is a ledger or record keeping technology that records all the transactions in a global distributed network.”
You may be wondering why a decentralized book-keeping is such a big deal and what exactly the use of such a technology is.
To understand this lets take an example of the banking industry.
When you transfer $100 to your friend you simply give your money to her.
Have you thought why you need a bank at all in between?
The bank’s job is to record the transaction and validate it.
The bank verifies that you have $100 less in your account and your friend has $100 more in her account.
Now, imagine a technology that records this transfer of money in a distributed network so that anyone can see how the money has moved.
There is no requirement of a bank in this case. Blockchain is a technology that can record the movement of assets and value online.
It restores trust in the system without the need of an intermediary to do so.
It is a radical way of doing transactions that is going to change our systems, institutions and business models.
Here is a video by World Economic Forum for more clarity.
From financial institutions to healthcare industry, blockchain technology is set to disrupt all sectors.
Marketing is another area where the technology will bring about change.
Marketers will have to rethink their marketing strategy in a blockchain enabled world, just like they had to embrace digital marketing with the introduction of the internet.
Here are some changes in marketing we can foresee with the blockchain technology:
1. Verification of Ad Delivery
Many startups are working in digital advertising space to change how digital ads work.
Blockchain can embed a tracker in ad creative and trace its journey across web to give you data on its impression, audience and action.
2. Paid Ad Platforms could be Eliminated
To take the above idea further it is even possible that ad platforms such as Adwords and Facebook Ads are eliminated in the future.
This is because theses platforms are currently owning the customer data and selling it to businesses for advertising.
In a blockchain economy, internet users could keep their search data private and sell it directly to businesses.
This eliminates ad platforms and allows buyers and advertisers to contact each other directly.
3. Proof of Claims on Products
Marketers usually use claims like ‘100% organic’ or ‘500 customers served successfully’.
However, how do the customers trust these claims? They usually have to fall back on the brand authority or a friend’s recommendation.
Blockchain will allow claims to be verified in real time by the customer.
Imagine a QR code on fruits that can be scanned to see the whole supply chain, right from where it is sourced, its chemical processing to its distribution channel.
All claims made by marketers could be verified by shared document that cannot be modified or tampered with.
Wal-Mart is already using this to verify supply chain for pork inventory using IBM Blockchain platform.
4. Loyalty Points could be Traded
It would be possible to trade loyalty points by customers using blockchain technology.
Consumers typically have reward points from various companies in travel, retail and finance.
Keeping a track of all loyalty points and their terms and conditions becomes difficult in such a case and most of the benefits are not used.
A blockchain based loyalty platform will allow for traceable exchange of points among customers.
This will mean that marketers will have to get innovative with their loyalty programs and benefits given.
A valuable loyalty point will attract more buyers to the brand.
IBM is already working on a blockchain infrastructure for loyalty and reward program in partnership with a startup called Loyyal.
5. Smart Contracts with Influencers and Consumers
Contracts are a complex maze of legal words and conditions. Most of the parties don’t even read it and enforcing such contracts becomes a difficult task for everyone involved.
This could change with the introduction of smart contracts.
Smart contracts are self executing and maintain a traceable record of all actions and asset transactions in blockchain.
To understand take an example of a smart contract with a social media influencer that your brand has tied up with.
Smart contract can state that payment will be done to the influencer when the post containing your brand name will reach 1000 views.
The payment is done automatically form your account once 1000 views are reached and none of the party has to worry about execution of contract.
Smart contracts would also be used for brand and consumer transactions.
It’s because, smart contacts are self-regulating and verifiable across all the networks.
Smart contracts will restore trusts among everyone doing business.
Bringing it all together
These are some of the disruptive changes we can foresee in marketing.
Blockchain start ups and big tech companies have already started working on them.
However, we never know how the blockchain economy is going to shape up.
It is still too early to see the full scale of change that blockchain technology is going to bring, just like it was difficult to predict how the internet would revolutionize the world back in 1990.