Data and customer management solutions have dominated the MarTech industry for several years however we are now seeing them mature and realise full potential. Our dedicated Consult team is at the forefront of innovation and understand how greenfield technologies influence the marketing ecosystem. The last few years have witnessed the extreme hype of cryptocurrencies and their continuous boom (and bust), but a more intriguing debate has developed around the use of the technology that underpins these cryptocurrencies: Blockchain. In simple terms, Blockchain can be described as a giant Excel spreadsheet. Any transaction is added as a “Block” to the spreadsheet which acts as a record keeping ledger.
For the marketing industry, IAB have recently suggested that Blockchain could be a perfect fit to solve some of the long standing issues around transparency, fraud, view ability and inefficiencies. In this post, we will cover some of the potential use cases, opportunities and challenges facing the technology.
Uses in Marketing
Smart Contracts were first implemented into the Ethereum cryptocurrency. These Smart Contracts are actioned once certain conditions are met and make them an interesting proposition for marketing technology. There are several companies already pioneering the Blockchain for programmatic buying. An example of this is the Papyrus platform which is in pilot phase. The platform aims to build on the Ethereum environment to utilise smart contracts for Real-time-bidding (RTB). Due to the structure and transparency of the platform, it discourages fraud as each transaction is cross verified and any unfair play will be recognised.
Due to the decentralised nature, it removes the need for third party intermediaries. The market is currently dominated by Facebook and Google who account for around 63% in ad revenues in the US alone. As transactions are conducted directly with the publishers, it eliminates the need for middlemen in the chain and therefore, will reduce the cost of the ads that are presented to the user.
Blockchain can provide valuable solutions to the current inefficiencies in Mar/AdTech however it is not without its challenges.
One of the major inefficiencies is the time it takes for transactions to be completed and added to the “Block”. it takes at least 10 seconds for a transaction to be validated with some taking over a minute. Bitcoins longest transaction was around 1.5 hours. Each handoff in the marketing ecosystem will need to be verified therefore adding to the latency. Each part of the marketing supply chain must adopt the technology. Without this, it will lead to capacity issues and gaps within the supply chain. Currently, there is a lack of education, understanding and standardisation in the industry.
A potential solution is the use of permissioned or private Blockchains. Private ledgers have been investigated for their uses by major banks. These private ledgers can only be used by one organisation whilst permissioned can be used by a consortium of companies or an industry. The obvious advantage is the speed of the connected Nodes (users) which brings the time it takes to confirm an addition to the Block closer to real time. This could solve RTB predicament for programmatic. Permissioned ledgers may hold great value for restricted industries like alcohol or tobacco where there is a duty to advertise to a certain criteria of people. Having a concise and trusted audit trail, it would be a great advantage to know who exactly the advertising is going to.
We are seeing clients allocate budget to Blockchain and helping them understand where it could sit within their business. The technology must overcome challenges related to capacity and transactions speed to truly scale. Furthermore, the potential for Blockchain will only be realised once the major players (Google & Facebook) introduce it into their products at which point digital marketing will change as we know it.