Blockchain in digital marketing: More consumer trust – and new ways of advertising

Blockchain in digital marketing: More consumer trust – and new ways of advertising Björn Radde is head of digital marketing at T-Systems International.

Digital marketing is facing concerns relating to online activities, be it cyber security, data protection or transparency. Blockchain can help to consolidate customer trust in the digital world. It can give more online ad authenticity, brand transparency, support cross-promotion with influencers and reward customers for data sharing.

Platform businesses like Facebook pose challenges to many market players in digital marketing as they hold monopoly or duopoly. Furthermore, data scandals caused skepticism about the digital advertising scene. Both users and advertisers feel that control over their data is slipping out of their grasp. Blockchain provides marketing organisations with new options to operate more autonomously in the advertising market, and to increase the authenticity of their product and corporate communications.

How? The main characteristic of the blockchain is that it stores data on decentralised servers at several locations rather than in one centralised repository. These distributed data records (blocks) are inseparably linked into a chain. Every computer (peer) in the network receives the same copy of the unalterable data. This has the advantage of no more central repository that all market players have to trust – and therefore no central point of attack for cybercriminals or vulnerability to technical malfunctions. The principle is akin to an online document stored at a decentral location that can be simultaneously updated across several computers. In digital marketing, this lays the foundation for more transparent, secure and trustful solutions.

Brand and product transparency

Sustainability is a defining element of every marketing agenda. Many companies claim to be sustainable. But how do they prove it? Blockchain technology can boost brand transparency within the supply chain management process, i.e. by verifying that products have been sustainably packaged or transported – two key criteria when your products are organic.

Therefore, an Industrial Control Systems (ICS, e.g. T-Systems) writes all data into a blockchain that is synchronised for all participants, such as the manufacturer, shipping agent, and retailer. This process enables consumers to get data on product origin and tracking information.

In practice, the cloud2cloud integration of the Cloud of Things (T-Systems) and the SCP (SAP Cloud Platform) use Internet of Things (IoT), blockchain and machine learning to monitor the supply chain of the apples that are used to make a smoothie (use case of T-Systems, pdf). With the help of IoT data, supply data and origin data, consumers can follow the path and origin of the organic apples – and make a reality check on the brand’s value proposition. This allows companies to market their products as sustainable with far more credibility.

Conscious data sharing and interaction

Another digital online marketing challenge is how to use relevant customer data without third party cookies. One possible solution is GDPR-compliant identities in single sign-on processes – the blockchain is ideal for creating them. The advantage for advertisers is that instead of having to obtain customer data from several sources, which was necessary in the past, the customers create their own profiles.

The blockchain provides a framework for new interaction models. One example is the Brave web browser: It enables encrypted connections for users to increase anonymity. For publishers, it offers a digital revenue model, while users can reward ad content with so called Basic Attention Tokens (BAT). That means users earn BATs when giving attention to publishers’ content and can spend it to support their favorite content creators. Another example is the decentralised search engine and ecosystem BitClave. It allows direct advertising with users who own and selectively share their personal data willingly. The outreach automation platform has a similar concept for generating “better” leads. Customers swap data against SNOV tokens and uses them to build a database of relevant, high quality leads.

Blockchain is on the rise

For now, high costs, the failure of real-time apps to achieve commercial viability, and the lack of sector-wide initiatives are (still) preventing widespread adoption. Although some potential applications for blockchain are still relatively unknown, it is starting to change the digital world. Blockchain has the potential to create more transparency, trust and efficiency in the digital advertising ecosystem. It will fast become a competition factor in digital marketing that advertisers cannot afford to ignore.

T-Systems is already pioneering individual solutions to get enterprises started in blockchain. Several pilot projects have been launched, and sector-wide experience sharing would be an important next step. Marketing organisations that want to remain competitive should definitely look into the processes that blockchain can simplify or even monetarise.

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