“I predict the Internet will soon go spectacularly supernova and in 1996 catastrophically collapse.” – Robert Metcalfe (the inventor of Ethernet) wrote in an article for Infoworld in December 1995. Two years later, Metcalfe ate his words. During his keynote speech at the sixth International World Wide Web Conference in 1997, he took a printed copy of his column that predicted the collapse, put it in a blender with some liquid and consumed the pulpy mass. This was after he tried to eat his words in the form of a very large cake, but the audience strongly protested. Like Metcalfe, some marketers and company heads didn’t believe the Internet would be anything. Today, more than half of the world’s most valuable public companies have Internet-driven, platform based businesses models.
Today, one technology that’s receiving a lot of scrutiny and skepticism is blockchain.
What is Blockchain?
Blockchain is a digital, decentralized ledger that keeps a record of all transactions that take place across a peer-to-peer network. The major innovation is that the technology allows market participants to transfer assets across the Internet without the need for a centralized third party. These transactions can involve any type of asset class, but today, blockchain is mostly used by cryptocurrencies like Bitcoin and Ethereum. With copies of the blockchain scattered all over the planet, it is considered to be tamper-proof.
Blockchain technology, while nascent, is rapidly evolving into a diverse and competitive digital economy. With a market capitalization of over $100 billion, the blockchain industry has grown over 200 percent each year for the past two years. A recent IBM study found that one-third of C-level executives are using or considering adopting blockchain technology in their organizations. While much has been said about how blockchain has the potential to disrupt the financial industry as we know it, here’s why as a marketer you should keep your eye on blockchain. Before you go further, a caveat: This is only the beginning of an exploration of how the arrival of blockchain technology will impact marketing in the future.
You’ll Have To Prove You’re Trustworthy
According to the 2017 Edelman Trust Barometer, consumers don’t trust many companies, particularly large ones. You can’t blame them. Remember the horsemeat scandal? While it’s okay to have your mission statement clearly displayed on your website, consumers can’t really prove your statement is true. With the promise of a blockchain enabled world, however, that is likely to change. With blockchain, consumers can verify that the shirt they just bought from your store wasn’t made in a sweatshop- affirming the promise stated on your website. Smart brands are already adopting blockchain technology, after realizing the competitive advantage of open, transparent supply chains and sustainable manufacturing, For instance, Walmart is using blockchain to track pork provenance in China, improving safety, reducing risk, and building trust with consumers.
Similarly, fish suppliers John West started including codes on their tuna cans to enable consumers to trace the product back to the fisherman; this initiative added £17 million to the brand’s sales. In a blockchain world, consumers will demand transparency. And since your job as a marketer requires you to build trust for your product, you can utilize blockchain technology to encourage consumer loyalty.
A Makeover For Loyalty Programs?
Like it or not, consumers are ditching loyalty programs. According to a report by Maritz Loyalty Marketing, 70% of consumers abandoned a loyalty rewards programs because of the length of time it took to accrue points. With blockchain technology, loyalty schemes can get a makeover that’ll make them more attractive to consumers and ensure retention. Through a decentralized technology solution, blockchain can centralize customer loyalty programs. This means consumers might be able to use your loyalty points anywhere. For instance, consumers could pay for a hotel room upgrade with airline points, or purchase a cup of coffee with some extra points from a car rental loyalty program. Blockchain could provide instant redemption and exchange for multiple loyalty point currencies on a single platform.
Think this might be in the future? The loyalty blockchain race has already begun. Take a look at Loyyal – a universal loyalty platform that members can apply to existing redemption networks, creating opportunities from interoperability. Incent, a merchant-backed loyalty business built on blockchain, treats loyalty points as fiat currency that can be minted indefinitely. Blockchain has the potential to make loyalty programs relevant again. You can explore the possibility and get ahead of your competitors or stand on the sidelines.
Consumers Will Get To Control Their Data
Come May 25, 2018, the EU will enact the General Data Protection Regulation (GDPR). The regulation will require companies to ensure the highest levels of privacy protection or suffer heavy fines. What’s the connection between GDPR and blockchain? As blockchain technology focuses on identity protection in regards to the data that’s associated with it, blockchain could therefore provide a new GDPR compliant usage model whereby consumers permit companies to access a certain level of data for a limited time and limited use.
Blockchain-based protocols will give consumers more control over their personal data. For example, a blockchain-based system could notify customers when a retailer would like to access their consumer data, and customers can choose to approve or deny authorization. That’s not all. It’s likely that in the future, consumers will no longer need ad blockers as they’ll get to choose which ads they want to see and get paid for it. Sound crazy? Here’s how it’ll work. With the Basic Attention Token (BAT), a function built by the architect of the Brave browser, an advertiser pays individual consumers for their attention, and they’ll get a share of all that ad dollars flying around. These are just a few glimpses of how consumers will maintain their own identity and control over their information in a blockchain world.
First Steps
Though blockchain technology is still relatively new, it represents where digital trends are heading in the next few years. Even if fails to live up to all its promises, a healthy knowledge of blockchain is important if you want to survive this ever-changing world of marketing. Think about how you can use blockchain to your advantage. If you don’t you’ll probably end up like Blockbuster.