If 2016 was the year of virtual reality and 2017 the year of artificial intelligence, 2018 is bound to be the year of Blockchain. And just like VR and AI, more people have heard of Blockchain that can say how it works.
Blockchain was mostly hype and experimentation in 2017, said Pavel Cherkashin, co-founder & CEO of Blockchain Programmatic Corp., a media-buying platform. “Next year will be the year you will see the real business applications around multiple verticals,” he said.
“We know you’ve heard about Blockchain every day over the past year,” said Shelly Palmer, CEO of consultancy The Palmer Group. “We don’t have to think about the future in terms of when Blockchain is here,” he said; what marketing needs to think about now is how to use it.
“If you’re not an expert in Blockchain, become one,” said Palmer.
Speaking to a recent meeting of agencies and marketers, Palmer said they should pay special attention to the intersection of Blockchain and smart contracts. This particular technology has ramifications throughout the supply chain and could transform the “gig economy,” he said. At the same meeting, Procter & Gamble’s CMO, Marc Pritchard, said the company is working on Blockchain-based coupons.
Serial entrepreneur Jeffrey Hayzlett, chairman of the C-Suite Network, said he’s getting multiple calls every day asking for his help with Blockchain projects and is already working with two companies in the area.
“This is probably the Wild West,” he said. “This makes Kickstarter child’s play.”
The Blockchain technology is open-source, so anyone can program on top of it, said Dustin Engel, general manager of the Advance Media Team, Analytics and Data Science at ad agency PMG. He noted there are already about 80,000 Blockchain projects in GitHub now, and millions in investment, so it could accelerate.
Many advertising agencies are studying Blockchain’s implications for marketing in 2018, driven by clients’ demands for transparency of data and by consumers’ concerns about data security in the wake of large hacks at Yahoo and Equifax. “Consumers are pissed off,” said Engel.
Blockchain is not to be confused with Bitcoin, the cryptocurrency it enables. It is a ledger, “the same concept as the horse traders in the gilded age. Basically, it’s a record of transactions,” said Engel. Values can only be changed by agreement of all parties, which lends it one level of security. Each step, or block in the chain is encrypted separately and stored throughout the chain, so there is a second level of security and no central point of attack for hackers.
Once made, changes are instantaneous, which makes it ideal for transactions; inter-bank checks could clear instantly, rather than take several business days to process. That’s why some of the early interest came from financial companies such Western Union, which wanted to speed up and secure money transfers.
But Blockchain can also be used to share consumer information or proprietary data while maintaining anonymity. Some applications being discussed now include purchasing, submitting bids and in a not-too-distant future, to provide each individual with an electronic identity they can hold in a token to navigate safely and privately online.
Consumers are getting used to using tokens and to different ways self-identify themselves, from thumbprints to facial recognition and biometrics could be used on Blockchain to verify identity anonymously, said Engel. This could change the relationship between marketers and consumers regarding personal data; several marketers envision soon they will have to incentivize customers to share their data.
“Whether it’s through Blockchain or a data wallet, consumers are going to own their data,” said Rob Rupczynski, global VP of media & CRM at McDonald’s Corp.
For agencies, Blockchain could create a standardized data set they can mine, “effectively the uber file of what’s happening in advertising,” said Engel. Marketers could use micropayments to reward consumers for sharing, with consumers paying for content and marketers paying for their attention to ads.
For publishers and media buyers, Blockchain could spell the end of “walled gardens” of data and enable media buying transparency to avoid fraud and waste. At a time when marketers are publishing content and publishers own agencies, anonymity can help rivals share audience data in programmatic platforms without exposing proprietary information, so buyers could make informed decisions.
“We need to break down the concept of gatekeepers,” said Adam Gerber. Senior VP Investment of ad agency Essence. “The Blockchain work is addressing that.”
Comcast has created some partnerships with Blockchain so partners can query data without exposing it, said Marcien Jenckes, President of Comcast Cable Advertising: “it’s about being bigger than us,” he said.
Agency professionals should learn to write code for Blockchain now, said Jess Kimball Leslie, global chief futurist OgilvyRed. “If you learn to code for these systems now, the best coder in the world won’t have a six-month lead on you,” she said.
Marketers should educate themselves about Blockchain now, because developments will be coming out fast, once they begin rolling out at scale, said Engel. Marketers should meeting with companies such as the open-source browser Brave and DataWallet—which are working to block ads and monetize consumer attention—to understand this new ecosystem, he said.
“All of this is happening to create this momentum. This could all move faster than anyone thinks,” said Engel. “Your best research right now is probably going to be in your own company. Because right now, someone in your company is looking at a Blockchain solution.”