WHY ARE WE TALKING ABOUT BLOCKCHAIN & WHY NOW?
In the first of two blogs we’re talking blockchain. Why? Because it’s going to fundamentally change our world, and as marketers and brand owners we’re going to be at the front line of that change. Blockchain technology will disrupt established business models, change how we live and work and create new opportunities for growth.
In this blog we cover what it is, why it matters and how it has the potential to transform our lives and in doing so we will try to avoid the jargon that besets so many discussions about this technology.
In the second blog we’ll then talk about how we think brands will win using this technology.
SO, FIRST THINGS FIRST, WHAT IS IT?
At its core blockchain is a digital ledger.
Think of it as a database that isn’t owned by one person, but is ‘owned’ by everyone who uses it; for a piece of data to be valid in the blockchain, it needs to reflect identically with everyone in that block. And this is its massive strength.
Being de-centralised means it’s an honest way of transferring and recording information.
Everyone on the blockchain needs to hold the same information for a record to be valid.
WHY IS THIS SO EXCITING?
Total transparency over how and where your money is spent
Imagine you are a global advertiser and you want complete transparency on how your money is being spent across a huge range of digital media. You want to know how much your agency is charging and how much money is being paid to the various programmatic exchanges and media platforms. Blockchain will enable you to independently monitor and verify every aspect of this process, ensuring that you know exactly how your money was spent and the value it returned.
No need for costly intermediaries like banks, agents or distributors
Imagine you are content creator like a photographer and you want to sell your photographs digitally. In the past you sold your photos to a middleman who would pay you when they were used. No doubt you also received payment from an intermediary such a bank. Now you will be able to upload images to the blockchain and anytime they are used it is automatically recorded and you will be automatically paid directly by the user without the need for the transaction to be routed via a third party.
Total confidence in the integrity of your supply chain
Imagine you are a retailer and you want to track the supply chain of all your products. Blockchain can easily track exactly where and how your products are made throughout the full supply chain. Which is why it’s a technology being looked at by businesses as diverse as Unilever, Walmart and DeBeers to ensure transparent and ethical supply chain standards.
No more horsemeat scandals.
In a world where integrity is at the centre of so many marketing conversations, the power of blockchain to create transparency and trust is huge.
We are at a time in history where consumers’ trust in big institutions is at an all time low, but the demand for transparent, human brand relationships is huge. We’re standing on the precipice of a technology that at it’s core is about building trust and is going to be as revolutionary to how we all do business as the internet itself.
SO WITH ALL THAT IN MIND, WHAT DO YOU NEED TO BE DOING?
1/ If you’re not thinking about the implications blockchain will have on your business, you should be.
It’s going to impact everything from the ingredients you use, to the ethics of your supply chain partnerships, to the richness with which you tell your brand story, to pricing and payment structures.
So it needs to be on your agenda.
2/ Blockchain will enforce a new business transparency that we all need to be geared up for.
At the moment, many large businesses are using it to manage their supply chain, the benefit largely accruing to them, but it’s not going to be long before it’ll be used to make your entire supply chain transparent to your consumers. It heralds a new era of consumer empowerment. The active consumers dream. But woe betide the manufacturer who is unprepared and caught off guard.
So you need to be thinking about where the weak points are in your brand story and gearing them up for a time when customers really can scrutinise everything you do.
3/ After transparency comes customisation…
Once blockchain is embedded, smart contracts will follow. Smart contracts are intelligent ‘contracts’ that flex as customer needs flex. Imagine donating to a charity, and seeing via blockchain that they aren’t using your money as efficiently as you’d like? You are now in a position to instantly divert your funds to another charity. Imagine having a mobile contract for 12 months with one supplier that can flex instantly to another supplier as your needs and requirements change? Smart contracts will give ultimate control to the consumer.
We’ve known for some time that consumers are looking for brands that are trustworthy, easy to use and easy to do business with. Blockchain is the technology with the potential to fundamentally address these concerns.
It’s happening now – a near future where the customer really is in ultimate control. Will you be first or last to that party?
CHECK IN IN NEXT WEEK WHEN WE PUBLISH OUR SECOND BLOG IN THIS SERIES, LOOKING AT THE IMPLICATIONS OF BLOCKCHAIN FOR BRANDS