Blockchain: The Basics for Marketers
Updated: Dec 16, 2018
by Melanie Roberts
As marketers and business professionals, most of us have heard of the blockchain, and its reputation of becoming the next big marketing tool. However, most don’t know exactly what it is or how it will work in the marketing, advertising and media realms.
So, let’s begin with the basics. What is BLOCKCHAIN?
By definition, blockchain is an immutable ledger. This means it works like an intuitive and more accurate Wikipedia page. Each blockchain “ledger” records every edit ever made, and based on consensus, uses information from every source to guarantee information is accurate.
Using a peer-to-peer database which connects people directly, everyone who uses a blockchain has access to the same information. This information exists as a shared and continuously reconciled database, and can be edited and updated at the same time by all ledger participants, so information is not lost and it cannot be changed once the information is published.
Through this process, transactions are completely transparent, open source and fully auditable, with no centralized authority.
Though blockchain is not fraud proof, it does help prevent fraud.
An example is, Meg says she got an A on her writing exam. Charlie says Meg got an A on her writing exam. Jenny confirms Meg got an A. John says he saw Meg get an A on her writing exam. But, Taylor says Meg got a D. The blockchain will take the consensus, and Taylor’s fraudulent information will not link to the chain.
Cut out the middleman:
Traditional systems are CENTRALIZED. One way to understand this system is the money sharing service, PayPal. PayPal will act as a liaison as you make a purchase in an online store or send money to a friend, but takes a cut in the process. For example, you send money to a friend. PayPal charges a fee to send that money to your friend on top of the original amount shared.
The blockchain operates as a DECENTRALIZED system. Transactions are direct, so there’s no need for a middleman. UBER is a good example of this system. Instead of providing a service in which they charge a fee, they act as a facilitator by connecting you with transportation and drivers who you pay directly. This creates fairness through transparency of all transactions.
Potential for Marketers and Media
On the blockchain, everyone can track how a journalistic production was made, when and why it was altered, and what were its sources.
In a decentralized system, journalists won’t depend on publishers and advertisers, so they can write about any subject, regardless of what gets the most likes or clicks.
Journalists will be more accurate and honest as they will no longer be able to alter their work so easily once it’s published.
It will ward off FAKE NEWS.
It would also PROTECT journalists. Today, some media producers have to be careful what they publish because of the company’s interests or even national interests. Journalists would have the ability to publish anonymously and write about the real issues.
Combating Bot Traffic – It’s been estimated that 56% of ALL website traffic in 2018 is from bots. Difficulty determining who, and where web traffic is originating from makes smart spending and strategy decisions harder than they need to be.
Preventing Fraud - Ensure ads are placed where desired, avoiding fraudulent mimicking sites that take important ad dollars and run.
Smart Contracts - A key part of the blockchain ecosystem, smart contracts are essentially “if/then” statements. When the set of predefined conditions are met, the agreement is automatically enforced. This could significantly impact the efficiency and expediency in partnership marketing.
When it comes to advertising, smart contracts can play an essential role in tracking and enforcing campaign specifications, and ensuring all requirements are met for both parties.
Where is blockchain today?
Early successes have been made with use in supply-chain auditing.
With Blockchain, every step of the process is audited, authenticated and tracked.
You know where the product has been and where it’s going.
Customers have full transparency with authentication that the life story of the product is legitimate.
Walmart was an early adopter of the technology.
After the recent E.coli scare, Walmart was forced to throw out all of their inventory. To avoid this major profit loss again, they began a 2-year pilot program adopting blockchain technology in their supply chain to map out and keep track of their lettuce supplies. They required everyone in their supply chain to be on the blockchain. This way, they could monitor the journey and have a trail to retrace if a bad batch was discovered.
It may be a while before blockchain becomes widely used, because it’s currently in early stages, like the internet in the 1980s. However, this new technology has infinite uses and will indeed become a key marketing tool in the future.
Here's a funny video on bitcoin (a crypto currency on the blockchain):
AdBank on blockchain: https://www.youtube.com/watch?v=e6vrlODdRgQ