You’ve probably heard about Bitcoin. You may have also heard about the blockchain, the underlying technology that makes Bitcoin possible without any centralized authority.
But odds are, you haven’t given much thought to how the role of marketing is going to get up-ended because of blockchains.
However, if Bitcoin proves to be the tip of the iceberg, then what lies below the surface is much bigger and more important. To be fair, this decentralization isn’t going to get here next week. But if you are a marketer who isn’t planning on retiring in the next year, it’s probably worth spending a bit of time to understand the potential change.
We’ve seen this movie before
In the mid ‘90s, marketers heard about email and the web. Ten years later, it happened again, with Facebook and Twitter. Finally, they began to understand and adapt to the implications that customers are connected and empowered in a way previously unimaginable.
Marketers who recognize that blockchains represent another seismic shift have a large opportunity in front of them. History may be repeating itself.
As a 20-year veteran of technology marketing, I’ve seen plenty of headlines like these:
We’re used to overhyping things. Heck, as marketers, part of our jobs is generating excitement. So we’re naturally a bit cynical of a claim from any marketer other than ourselves.
The case for blockchains and decentralization comes down to 3 points:
- It’s already happening
Homeland Security is looking at blockchain to track goods and people across borders and the FDA is looking at blockchain to help with population health management among scores of others. And that doesn’t even touch on the numerous efforts within the Financial Services industry.
- The pace of life requires it
If you want to email, text or share a picture with anyone in the world, you can do so instantly. Yet, if you want to transfer something of actual economic value, like money or the title to a car) it can take days or even weeks. Time is money, and these slow systems are costing us.
- The future needs it
With the Internet of Things, billions of devices that will share information with each other and pay/get compensated at the micro-transaction level. The volume of transactions demands an “Internet-friendly” way of making payments.
Blockchain-based cryptocurrencies make the most sense. Your smartwatch isn’t going to make a credit card payment to a charging station for 2 cents worth of power, but a blockchain-based system can and will.
What all this means for marketers
Many of the “givens” of marketing as they currently exist could come under pressure, such as:
- Individuals, not brands, will control access identity and personal information through services like uPort, MetaMask, Blockstack, or Keybase.
- Brand affinity will align to decentralized protocols that represent a set of core values. For example, the people who choose to participate in a censorship-resistant marketplace like OpenBazaar instead of eBay.
- Value will get created not by owning customer data, but by how companies help customers use, interpret, and interface with data. This is how Coinbase competes with BitGo, Jaxx, and LedgerWallet to interface with the addresses you control on the Bitcoin blockchain.
- A marketer’s claim will never be accepted as is. As positioning pioneer Jack Trout wrote, “Claims of difference without proof are really just claims.” The supply chain, for example, becomes a key part of the value proposition. Witness how Walmart plans to blockchain to track pork provenance in China.
- Assets like loyalty points and coupons may become freely tradeable and interchangeable via services like ShapeShift. Loyalty points alone won’t be enough to lock customers into a relationship.
- Attention won’t be free. Customers will use social media platforms like Steem where attention and participation are rewarded and earned. Marketers will need to engage in a meaningful way to warrant engagement. They won’t be able to buy attention. (Note: this will impact email as well.)
This is just the beginning and doesn’t even touch on things such as asset programmability, which could impact budget tracking and management; prediction markets impacting forecasting; crypto-tokens measuring value within a network; and anonymous currencies like Zcash (disclosure: client) and Monero.
Much like no one predicted Spotify, Uber or Seamless in the ‘90s, we can’t predict how this technology will evolve or impact us. However, the data points are amassing that blockchain technology is for real.
What you can do now
Companies and marketers often ask me what they can do now to begin preparing, in order to future-proof their businesses. Imagine that any asset can now be digital, all customer transaction data is shared among every competitor in the industry, and that the laws can be hard-coded into an asset itself. Oh, and you have to pay for customer attention at every touchpoint, without any third-party intermediaries.
How would you build a business, a marketing function, and a customer relationship in that environment?
Doing this now is like taking out an insurance policy against disruption. It’s worth the premium. As sci-fi writer William Gibson put it, “The future has arrived — it’s just not evenly distributed yet.”
Check out part two as we dig deeper into how blockchain technology is already starting to reshape the ad industry.