5 THINGS ABOUT BLOCKCHAIN THAT EVERY MARKETER SHOULD KNOW
Published on April 13, 2020
Blockchain. When you hear the word what comes to mind? Buzzword? Hype? Potential?
Whether you’re a marketer or a brand, we’re certain you’ve heard it before as industry bodies such as the Interactive Advertising Board’s Tech Lab or JICWEBS have all looked to explore the technology in respective pilots that have commanded interest from household names spanning Nestlé, McDonald’s, Unilever, and many more.
Yet, despite its purported promise, a lot remains shrouded in confusion for marketers. Be it the overabundance of intimidating jargon or a preoccupation with the technology’s controversial past, it appears that the existing dialogue surrounding blockchain in the industry requires an overhaul. Most of all, irrespective of the technology, one thing matters most: results. How will blockchain help you meet your KPIs and what returns can you hope to reap?
In this blog post, we’ll be breaking down the essential fundamentals of blockchain for marketers—what you should know, why it’s important, and most importantly, why you should care.
1. First of all, what is blockchain?
As a technology, blockchain is a distributed ledger of transactions. Confused? You can think of blockchain as a Google Sheet where you can view the entire history of the document—from the changes that have been made to date, who made them, up to the moment when the document was first created, as well as who has access to the document to begin with.
As a distributed ledger, blockchain is the same—distributed across a network of participating computers, it records all changes that have taken place to date and by whom.
2. Advancing Automation
One technology associated with blockchain is that of smart contracts. Smart contracts are exactly why they sound like they are—smarter contracts. This is because they’re designed to be self-executing, whereby the parameters of an agreement are encoded in the contract as conditions that need to be met. With smart contracts, the digital media supply chain will be less burdened by a bloated administrative layer. Think of the payments and invoice processing cycle—traditionally, intermediaries have been relied on to consolidate separate records on behalf of the advertisers and publisher.
With blockchain, payments can be managed in near real time, as all the participating stakeholders share the same records across a given campaign ecosystem. With smart contracts, payments can be disbursed automatically so long as the terms in the self-executing contract are met.
3. Mitigating Fraud
In programmatic advertising, which automates the process of buying, selling, and placing ads, fraud is a particularly big risk. Amid these impressions, malicious bots can comprise a significant number of measured views. Each armed with different IP addresses and coming from different devices, bots can fool an ineffective fraud prevention system, and in 2019 alone, advertisers lost over US$23 billion globally according to Cheq.
With smart contracts, advertisers can be assured that they’re only paying for ads that were appropriately served in verifiably viewable environments while remaining brand safe and free of ad fraud. We have previously worked with several industry giants as part of Project Proton, a pilot which aims to explore the potential of blockchain in addressing these areas. To learn more, read our case study here.
4. Greater Transparency = Greater Provenance
As an immutable ledger, blockchain provides a historical view of all activities that have taken place on-chain. This injects greater accountability in the campaign environment for all participating stakeholders within a given campaign, as they have a full view of all the transactions taking place in real-time. This ensures that participating brands, publishers, and advertisers have a single source of truth to rely on when it comes to campaign performance.
What’s more is that once data has been recorded on-chain, it cannot be changed. While this may seemingly sound at odds with privacy frameworks such as the EU’s General Data Protection Regulations, hybrid approaches to blockchain that incorporate on-chain and off-chain storage can ensure that companies can remain compliant with the legislation’s “right to be forgotten” clause. For example, by ensuring that raw data is kept off-chain and encrypted before being stored on the blockchain, consumer data remains appropriately encrypted while complying with their right to rescind access to their data. With that, blockchain’s immutability can still provide assurances of a data set’s provenance without compromising on a consumer’s right to privacy.
5. Distributing Risk
While organisations are quick to bolster their security measures in order to protect business assets and avoid system failures, one infrastructural piece is often overlooked: the dreaded single point of failure. As an infrastructural flaw, a single point of failure in the design or implementation of a software or system can lead to its downfall. Centralised databases, for one, are often perceived as honeypots for hackers as existing security vulnerabilities can easily be exploited, causing the entire system to fail once it’s been penetrated. Amid the era of data-driven marketing, this can have critical, if not, catastrophic implications for marketers, should they suffer from a data breach.
On the other hand, blockchain can offer a distributed or decentralised network for marketers to leverage instead. This ensures that even if one area of the network is attacked or is compromised, the entirety of its operations cannot fail and security can be preserved.
Looking to the Future
As we look to the realities of an increasingly interconnected albeit privacy-oriented future, blockchain has demonstrated that it certainly has the chops to rise to the challenge. With its ability to address critical security issues and restore trust and transparency to a largely fragmented sector, the technology is certainly set to prompt radical change in how marketers are conducting their campaigns.