If the word ‘Bitcoin’ doesn’t ring a bell, then you should probably up your financial and technological knowledge and Google the word urgently. However, there is a pretty good chance that you have heard or at least read something about this disruptive digital currency that is currently shaking up the global financial markets. And maybe you’ve even been one of the lucky early investors who have enjoyed stellar profits on the skyrocketing ride Bitcoin and other cryptocurrencies has taken since the beginning of 2017.
Instead of discussing whether the volatile cryptocurrency market will be the next tech bubble or not, we’d like to highlight the underpinning digital foundation that supports those digital currencies: the blockchain technology that has the intrinsic power to disrupt a whole bunch of industries, including marketing. We believe blockchain technology has the potential to reshape the relationships between companies and customers. The latter will be in absolute control of their online privacy and the data they generate. Empowered by this control, customers could monetize their data by selling or auctioning it to companies who are eager to pay for accurate and up-to-date information, allowing them, in turn, to finally create relevant content and marketing messages. We say ‘could’, because the technology is still in its infancy, which makes it too early to draw firm conclusions on where this will all end up.
Tell me, what’s blockchain?
For many laymen the way blockchain works is still something of a mystery. Blockchain was supposedly invented by Satoshi Nakamoto, the pseudonym of an until now unidentified person or a group of people, active in cryptography forums. In October 2008, in the full heat of the financial meltdown, Satoshi published a paper that laid out the foundations of a cryptocurrency, which would offer an innovative solution to the shortcomings of financial and other transaction or interaction systems.
There are plenty of articles, illustrations and videos to be found on the web that describe in detail the way it works, but we like this definition by McKinsey: “a distributed register to store static records and/or dynamic transaction data without central coordination by using a consensus-based mechanism to check the validity of transactions.”
This means that everyone can access the entire database and its history without an intermediary, and that transactions happen directly between parties, without going through one central node. Every node in the system (each has a unique identifier) can store and forward information to the rest of the network, and every transaction is visible. Users, however, can choose to remain anonymous or prove their identity. The system is extremely safe because once transactions are registered in the database, they cannot be altered any more: they become part of the chain and are permanently linked to all previous transactions.
By now you will have understood that the fundamental characteristics of this technology open doors for more than just cryptocurrencies. We like to compare it with the launch of Apple’s iPhone App Store in 2008. Offering developers access to the various functions and services of its devices resulted in more than 2.2 million different apps being developed by 2017. Apple was flabbergasted by the myriad applications they had never thought of. The same applies to blockchain, and we believe it has the inherent potential to disrupt the way marketers collect and make use of their customers’ data in the future.
The inefficiencies and issues we’re dealing with...
In our Yearly Marketing Survey, one-third of Belgian marketers indicated that their company is data-driven. But just think for a second about your current way of recording customer data and transactions, and the effort it takes to achieve a truly useful and coherent dataset. We can all agree that the process is extremely complex, prone to mistakes, and time-consuming, because it often involves multiple databases, legacy systems and different intermediaries. Think about all the marketing tools you’re currently using, such as your mail campaign tool, your marketing automation platform, the company’s social channels and the payment providers you use. How do you make sense of all that customer data? How do you ensure that it’s correct, provides you with an accurate view on your customer and is therefore fit for your marketing activities?
And, switching hats, how do you feel as a customer? With every click, every website visit, every social media post, every online purchase, you know you are leaving your digital fingerprint. Your digital marks are scattered across the world wide web. Your data is not centralized, you don’t know who has which bits of data about you and what they (ab)use it for and where it goes to. You’re definitely not capable of getting 100% control of your own data. And you’re vulnerable, too, because if a central database is compromised, due to fraud, cyber attack, or a simple mistake, the effect can simply be uncontrollable.
...could be solved by blockchain technology
As a marketer, you probably dream of achieving a constantly up-to-date and single view of the customer. Blockchain could give you access to accurate customer data, allowing perfect segmentation, error-free targeting and peaking engagement, useable across all of our channels. In that way, you’re always 100% sure you’re using your customers’ data with their full consent. Isn’t that what the new privacy regulation GDPR is all about? Wouldn’t you feel proud to communicate with certainty that their data is safe with you, unhackable?
As a customer, wouldn’t you like to be addressed with messages that are only relevant to you, when it’s convenient? Wouldn’t you like to be in direct control of and manage your private data and the data you create? How would you feel about a self-sovereign identity and being able to decide what to share, with whom and when? How about monetizing your data?
Bring blockchain technology into play and it reduces our intermediaries, can record your data, is immutable and unhackable and forms one global platform of trust and truth.
Just a few ideas to spark your imagination and to see how identity management based on blockchain technologies can help you:
- Manage and update your personal data centrally
- Control your online privacy, including exercising the right to be forgotten
- Decide who to share data with
- Embed contracts, from which actions can be automatically triggered when certain conditions are met
- Collect data from all the transactions you’re part of, tracing exactly who does what with your information
- Sell your data with different monetization models: auctioning, fixed price, etc.
We’re far from finding a functioning solution, let alone a worldwide adaptation. But the first steps are currently being made by start-ups such as Civic and others. We don’t know what the future will bring, but you can expect the coming years to witness an explosion of creative alterations of the blockchain technology that will allow us, as marketers, to finally build transparent, meaningful and frustration-free relationships with our customers. We will be empowered by mutual trust to deliver the most relevant messages, knowing our targeting will be flawless and no longer based on assumptions.
So, keep a close eye on the development and adaptation of blockchain applications for marketing purposes and start thinking about how the technology can complement and support your marketing strategy. We’d love to hear your thoughts!