Blockchain Technology and How it Applies to Media & Marketing
Overview of blockchain technology
According to CIO magazine, "blockchain is the structure of data that represents a financial ledger entry, or a record of a transaction." Each transaction using blockchain is verifiable and authentic. To reach this level of integrity, each transaction is signed digitally. Additionally, there are several layers, or nodes, in which transactions are distributed, and each of these serves to provide a consensus on the status of the transaction. In other words, if several nodes all confirm that a transaction is legitimate, the chances that the transaction are, in fact, legitimate are almost guaranteed. The nodes run an algorithm on the new transaction (called a block) to verify signature and history. If a majority of the nodes agree to its legitimacy, the block is added to the blockchain. If the nodes do not come to a majority decision, the block is not added to the blockchain.
Because of this distribution method, blockchain technologies can operate as ledgers without a central authority. There is no need for an intermediary with blockchain technology, meaning costs associated with verifying transactions can decrease and speed of verification can increase. They can also be configured to identify certain transactions or participants in the chain. Blockchain nodes use digital signatures to detect threats or fraudulent uses, meeting security can also be stronger with blockchain technology. Blocks can only be modified by the entity that "owns" the block. When someone edits their block, they use a personal encryption key to enter into the block. When a block is changed, the blockchain is immediately updated for everyone using it.
blockchain in media and marketing
Blockchain technology is largely disrupting ad campaign methods. By eliminating the need for an intermediary, companies will no longer have to go through banks or sites like Google and Facebook to place an ad on a website. Blockchain technology provides sufficient verification that an advertisement is legitimate, and website owners can work directly with ad companies instead of through an intermediary like Google. Ad companies will make more money per advertisement if they no longer need to pay for the intermediary services. It also eliminates other tech entities that fix problems with digital advertisements that all take a portion of an ads profits, leaving the publisher with less profit. IBM iX and Unilever's blockchain technology can identify problems with an ad immediately and prompt an update instead of waiting for an ad campaign to finish.
Comcast's advanced advertising group allows brands to buy ads with blockchain technology, which also lets them share data without a central location for it. For example, A CPG marketer "would be able to use data from a content producer like Hulu to understand how to target its ad buys without receiving the actual data itself."
Ad space is also often bought "programmatically," meaning an automated system buys ads and places them according to an algorithm. The ad agency The&Partnership calculated that $7.8 billion worth of ads were spent using this system and placed in "invalid traffic" areas where no one or very few people see them. To combat this problem, The Marketing Group launched "the first blockchain-enabled global media agency," which they call Truth. With Truth's blockchain, advertisers will be able to track where their ads are placed to better inform their strategies.
Consumer trust and ads are a common topic in blockchain technologies. The Shanghai fashion brand Babyghost used a blockchain platform called VeChain, which can verify if an item for sale is authentic. Customers can look at the blockchain to see where it came from and who made it. Part of IBM iX and Unilever's blockchain technology's uses is also identifying when an ad is over-targeting certain consumers, forcing them to see the same ad hundreds of times. The Brave browser uses blockchain technology to keep a ledger of websites that are important to users and blocks ads that would be considered intrusive. The result is a faster browser and more user satisfaction with advertisements. Walmart teamed up with IBM using blockchain technology to make their supply chain operations more transparent to customers. Allowing customers to see where their products came from boosted their confidence in Walmart's practices.
One suggestion for marketers right now about blockchain is simply to understand what it is. Dave Morgan, CEO and founder of Simulmedia, says "'What’s your blockchain strategy?' will soon become a common question among marketers." He recommends spending time with people who understand blockchain. The main reason marketers shoud learn about blockchain now is because blockchain is not yet highly adopted and there is no front runner. Understanding it now will give an advantage to marketing companies when blockchain becomes more prominently used.
Blockchain technology will change the relationships between clients and agencies as well as relationships within agencies. Blockchain can be used as a "replacement for the typical multiple executive approval processes would cut down project delays and create a universal agreement across business sectors impacting both clients and agencies." By tracking ads in real-time, the way marketers service clients will change.
Some ways that marketers can use blockchain are:
-Ensuring ads are not over- or under-shown to consumers
-Showing consumers how their data is used by a marketer
-Verifying that followers are real people, not bots
-Ensuring ads are approved before running
-Creating more barriers for fraudulent rewards points accumulations
-Creating an auditable trail for companies' insurance policies
-Verify employment history and identity of references for job candidates
Even though half of the world's population uses the internet, only .5% uses blockchain technology. The global blockchain market is expected to be worth $20 billion by 2024. The average investment in blockchain technologies is $1 million. A third of chief executives are using or considering adoption blockchain technologies.
Blockchain technology is used in the media and marketing industry through ad buying, consumer transparency, corrective ad placement, ad data sharing, and verification of entities and products. The increased use of blockchain technologies will lead to a decreased need for intermediary roles like banks and sites like Google, less money spent on ill-placed ads, more consumer confidence in companies, and faster project speeds. There are a wide variety of uses for blockchain technology, but since there is no clear front runner yet, marketers should learn everything can about blockchain and its future uses to develop a strategy they can implement when it becomes more mainstream.