How marketers can unlock blockchainDecember 2, 2021 | By Raja Rajamannar
There is some confusion amongst marketers as to the difference between blockchain and Bitcoin. They feel that they are one and the same, and that they have little to do with marketing anyway.
At a high level, blockchain is a technology for tracking records and data. Bitcoin is one type of cryptocurrency. Blockchain technology enables the creation, tracking and management of bitcoins and other types of cryptocurrencies. Blockchain can also be deployed for many other applications beyond cryptocurrencies, and has the ability to significantly impact marketing in many ways.
In simple terms, here’s what marketers need to know about blockchain.
Blockchain is a digital ledger (like an accounting book) of records or transactions. Instead of one entity keeping track of the ledger and the transactions within it, the blockchain can be distributed across a community or members, to validate and timestamp the transactions. This is called a distributed ledger. In some cases, there is no central authority or a single source that keeps the records.
Every time a transaction takes place, it is recorded as one “block” in the “chain.” Once a block has been created, it can’t be tampered with, as it is visible by all the participants in the blockchain. The complete transparency means you can trust the transaction. You don’t need intermediaries to validate the information about the transactions.
Blockchain is going to transform advertising value chains.
Studies have shown that only between 40% to 60% of advertising dollars that marketers spend actually goes to the publishers. The rest goes to the intermediaries, whose job it is to count, verify, validate and reconcile the numbers. Clearly, this is an extraordinary level of inefficiency in action. Further, the advertising ecosystem is rather opaque and is filled with trust issues, allegations of kickbacks, fudging of data, etc.
Blockchain can solve a significant portion of this problem. With smart contracts between marketers and publishers, a number of intermediaries can be eliminated. Companies including IBM, Unilever and MediaOcean have done some pilots, and the early results showed that reclaiming fifteen to twenty cents on the dollar is an achievable goal.
For blockchain to really take root, scale will be critical. Significant participation from advertisers and publishers will get the industry there. It is a matter of time. Blockchain will step in and help fix the trust and efficiency issues in the advertising ecosystem.
Beyond advertising, blockchain can also help across the other value chains in the marketing ecosystem — be it the post-production value chain, promotional value chain or influencer value chain. Where there are processes with multiple intermediaries, concerns of transparency, deficit in trust, prevalence of fraud, need for validation or proof of transaction, or reconciliation of numbers, blockchain can help in a big way.
Another area where blockchain can play a role is in establishing the origin of a product and tracking down its journey. In areas like luxury goods, pharmaceuticals and spare parts — where there is a heightened risk of spurious products being brought into the market — blockchain can establish the authenticity of the real product through its provenance. Each time an item changes hands or moves through the supply chain, it is recorded on the blockchain. In this day and age, a seal of authenticity could be a huge brand differentiator.
Long story short
We are just beginning to scratch the surface of blockchain’s possible applications. As marketers begin to understand its potential more deeply, they will come up with more valuable ways to deploy it across industries.
What we know is that blockchain can provide substantial value in terms of trust and transparency to transactions in any ecosystem. The technology has been proven to create efficiencies in the advertising value chain.
Most importantly, blockchain can help bring in the much needed credibility and trust back into the marketing ecosystem.
About this blog
Marketing Sense is a blog series from Raja Rajamannar, Mastercard’s chief marketing and communications officer. Every month, Marketing Sense will bring you unique, original, relevant content to equip you with the knowledge that will keep you ahead of a rapidly changing industry. We’ll filter out the noise to focus on key marketing trends backed by new findings and support from thought leaders from across the trade.
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