My new column — this time, a feature on the pros and cons of blockchain — is live at The Drum:
Blockchain takes on ad fraud and the Google-Facebook duopoly
Cryptocurrencies are beginning to smell a lot like tulips. Still no one I know in the world wanted or received a virtual reality headset for a holiday present last month. Everyone continuously waits for the flying cars that we were promised in early science fiction.
High-tech fads come and go, and the best inventions never arrive at all. But there is one innovation that has real potential in the marketing world of 2018: blockchain.
Two recent events have bolstered the technology. In late 2017, the WPP-owned agency Mindshare announced a partnership with blockchain protocol Zilliqa to address privacy and fake news issues in advertising. Earlier this month, Kodak released the KodakOne platform, which uses a blockchain to create a digital ledger of rights ownership for photographers – news that more than tripled the the company’s stock price following the announcement.
And the possibilities only start there.
What is blockchain?
Most advances in marketing technology are simply one of two things: either a new type of direct response that targets people with some type of electronic junk mail or an artificial intelligence technology that does low-level sales or customer service.
Most buzzwords either mean nothing precise, are absolutely useless, or both. ‘Millennials’ refers to a demographic that is precise but not typically useful in marketing. ‘Content marketing’ simply refers to marketing communications and, as a term, it can be useful, but it is never discussed in a precise way. AI is at best misunderstood or at worst wrongly mentioned to get publicity when a technology does not actually use it.
Blockchain, on the other hand, is a buzzword that is actually a real advancement and refers to something both precise and potentially useful. Blockchain is different because it is a fundamental restructuring of the way that marketing operations – or anything else – can occur online.
A blockchain, the technology on which cryptocurrencies such as Bitcoin are based, is a decentralised and shared digital ledger with a continuously updated list of transactions across a fully distributed or peer-to-peer network. A blockchain can be public or private as well as have its own currency or medium of exchange. Ethereum is one of the most popular platforms for blockchain-based projects and startups.
In basic terms, Blockchain is like a gigantic Google spreadsheet in the cloud. Whenever someone in the network makes a transaction and “edits” the ledger, everyone else verifies the change and sees the updated ledger. No other party – such as a government, bank, or financial institution – is needed.
Here is the basic idea:
– John and Jennifer are anonymous members of a specific 10-person blockchain network
– John pays Jennifer $1,000 for some given transaction
– John and Jennifer update their ledger balances to show John loses $1,000 and Jennifer gains $1,000
– Everyone else on the network verifies the transaction, and then the ledger updates
– Each transaction is a ‘block” within the sequential “chain” of the ledger in a similar way as an accountant would go down through each line in a company’s books
Now, just imagine the same example – but the networks consist of 500 or 5 million people. That is blockchain.
If someone wants to advertise through Google or Facebook, then that person must work within a centralised platform that is owned and dictated by those companies. But if a group of people want to buy, sell, or trade something among themselves – whether it is Bitcoin or something else such as marketing leads – then blockchain technology can help to facilitate that.