For everything from insurance to supply chain management, blockchain technology promises to upend traditional business practices – sometimes in the most surprising ways.
Even the modern marketer will not be spared from the blockchain revolution. On a recent episode of Internet talk radio show Coffee Break with Game-Changers, presented by SAP, a panel of three leading industry experts discussed the potential for blockchain technology to disrupt marketing.
During the show, titled Blockchain Technology: Turning Marketing on its Head, host Bonnie D. Graham moderated an energized, technology-focused discussion that revolved around a central question: What if the customer charges the marketer for access to his or her data in the blockchain?
For marketers long in search of a unified customer profile – that Holy Grail of marketing that provides a holistic picture of the customer, as mined from reams of marketing data – this question is sure to give serious cause for thought. Panelist Jeremy Epstein, CEO at Never Stop Marketing, summarized what this means for the future of marketing: “In a blockchain world, marketers will have to earn customer permission in an entirely new way. Identity will be controlled by the users.”
New challenges ahead in quest for unified customer profile
For those not familiar with the concept, blockchain technology is the infrastructure that forms the underpinning ledger of the Bitcoin crypto-currency, a technological marvel unto itself that is currently more highly valued than an ounce of gold. The decentralized network of computers and protocols that form a blockchain provide increased privacy and security for all data that resides therein. The encrypted nature of the blockchain puts the control over access to personal data squarely in the hands of the individual user.
“In a blockchain world, you’re going to have a shared data layer worldwide where the information is put into a blockchain and kept there,” Epstein explained. “But the control of that information will reside with each of us. For example, I as a customer will grant or revoke access to my personal information to a given company on a need-to-know basis.”
This is a vastly different approach from the current marketing process model of capturing customer data, storing it in databases, mining it, and possibly selling it to a third party. “It really is the inversion of the user model,” said Joel Monegro, investment analyst at Union Square Ventures. “If you think about how the web works today, you have to go to a whole bunch of different services to get different pieces of information: You have to go to Google to get your notifications or to get information of things that you are looking for; you have to go to Facebook to get information about your friends; and you have to go to Amazon to get information about products to buy.
“Instead, what is happening with blockchains is that we’re developing an architecture where services come to the user for their information. It’s creating this comprehensive view of the user that is user-centric and user-controlled.”
How much is my data worth to you?
“The user will have a blockchain-based identity,” explained Amanda Gutterman, chief marketing officer, ConsenSys. “You will control all of the different reputational and data attributes connected to that identity. You can selectively share or not share, or sell.”
In this new marketing environment, a brand may approach the customer with an offer to receive its weekly sales newsletter, as is often the case today when you make a purchase with a new vendor online. What will be new is that the customer can respond with the price that she will charge for reading that newsletter. Per the example given in the show, that customer might say, “Okay, for me to even look at your email there’s going to be a micropayment of .003 cents.” The brand could decide if it is willing to pay that or not, based on how much it values that customer’s interaction, and then initiate a transaction for payment in the form of a crypto-currency, like the Bitcoin. Assigning value to customer interaction is common practice in marketing today, however the customer is typically not paid for this interaction.
“What blockchain is going to enable, with the ability to create very sophisticated micropayment structures and governance structures, is kind of a sliding scale of media. So at any moment you’re either paying to consume media or being paid to consume media, based on whose interests are at play,” said Gutterman.
The brand will be able to assess on a case-by-case basis if it should continue paying that customer. In turn, the customer will be able to decide to raise her rates, perhaps because she is getting inundated with marketing information from other brands competing for his attention.
“It’ll be a negotiation for your attention and for your information, which are all assets that [marketers] want. If these weren’t assets, they wouldn’t be trying to capture and mine it,” concluded Epstein. At the very least, it means that marketers will be challenged to engage with customers in new ways – and will need to continuously prove the value of the relationship to their customer.
Listen to a recording of the full show here: Blockchain Technology: Turning Marketing on its Head