Chain Reactions.
When advertising and blockchain meet.
With cryptocurrency, Facebook and Apple occupying my news feeds for a few months now, for distant but very related reasons at the same time, I felt like confronting the two worlds to see what would come out. On one side, Facebook, the sad standard-bearer of an advertising industry in search of meaning and solutions. On the other, the new technology that is just anarchistic enough to say it wants to solve everything, as usual.
The advertising industry won’t be completely overturned overnight, let’s face it. But I think it would be naive not to consider that it will be profoundly transformed, once again, by emerging technologies. So without any pretense, here are three ways blockchain technology could transform the advertising industry, whether it likes it or not.
The power of permission
With the issue of privacy and data protection at the center of the current public war between Facebook and Apple, this point is probably the most obvious.
Recently, the iPhone manufacturer decided that it would allow its users, with the 14.5 update of its OS, to stop the data harvesting done by their applications, and this through a simple notification. Thus, without having to dig into the abyss of their personal settings, all Apple customers have gradually the choice to allow or not to be tracked. The result? So far, 96% of American users have chosen to prevent data collection. Surprised? Not really. I don’t think the privacy issue is that important to most people, but if you’re asked directly, it almost makes sense to choose to block everything. So quickly, Apple is limiting data collection on its devices and browser. Obviously, this decision directly impacts Facebook, whose almost all revenue comes from the advertising market. “We run ads, governor.”
Meanwhile, Google, also under the weight of public opinion and in front of the courts every week, decides to phase out third-party cookies. Together, Facebook and Google will account for 80% of digital advertising investments in Canada by 2021. Generally less available data, therefore probably less accuracy.
Add to that the Pandora’s box of digital marketing: a significant portion of results come from fake traffic, fake views and fake clicks. Now, I’d like to think that Facebook, overcome with a sudden sense of conscience, decides to address this problem. But let’s face it: with the current relentless assault on their business model, I can’t imagine the company spending billions on a war that will only result in further diminishing their appeal to advertisers.
Conclusion: advertising clients will be looking for alternatives, more actively than in the last 10 years, during which many threw the majority of their budgets to the two giants without much thought.
This is where blockchain makes its first entrance.
Some platforms in the ecosystem are already proposing a fairly simple idea, directly designed to address the problems mentioned above. A system where everyone gets what they want:
1- Internet users must accept or not (through their browser) to share their data and receive ads. If they accept, they are paid to do so, using a cryptocurrency which, at the same time, validates the veracity of their interaction with the ad (real video view for example).
2- These cryptocurrencies can be kept and exchanged by the user, or automatically redistributed to the platforms and content they consume. A way to redirect money from advertisers to creators on a pro-rata basis of actual usage. For some cases where monetization is unfortunately more difficult for creators, the alternative is promising.
3- Finally, advertisers benefit from a pool of engaged Internet users who have agreed to share their data and who, logically, potentially generate better results due to more precise targeting. All of this, while establishing a higher level of security against fraud and false traffic.
All it takes is an equal value proposition for all parties involved. And no, an ad that “really” includes the kind of workout pants I’ve always wanted (none) is not sufficient compensation.
None of this will change overnight. But if I were doing it myself, I’d start looking seriously at how to incorporate all of this into my strategies, soon.
The end of matchmakers
The American Electoral College, seen today as a somewhat ridiculous relic of the past (with good reason), was originally motivated by a very serious consideration. In the 19th century, the United States presented an enormous communication challenge in an electoral context. How to ensure that the American population, scattered in every corner of the enormous state, could learn about the candidates running for president? The information was not easy to disseminate with the technological means of the time. And one can assume that very few voters took the time to travel across the country for days to judge the candidates in person. That was the need behind the Electoral College: an intermediary. Thus, the people of a state could elect the members of the college in their respective states, knowing that they would then be responsible for electing the president.
The analogy may seem a bit twisted, but it seems pretty close to what much of the advertising industry is today. A rough middleman for voters (in this case buyers) who can’t choose for themselves. The problem is that they clearly can choose. The real problem is that soon they won’t even have to.
Think of all the things you have yet to go shopping for simply because of a missing technology link. Your phone and smartwatch are probably the best at shopping for insurance right now. Your lunchbox subscription and your refrigerator hold all the information you need for your next grocery purchase. What if these apps could receive information from your banking institution, so you could narrow down recommendations based on your budget? Spotify and Netflix have already started to take this kind of place in the lives of many, but why stop there? In fact, we can confirm today that it won’t stop there. When Spotify can tell from your smartwatch which song makes you react physically the most strongly, you’ll have officially reached the point where your devices know you better than you know yourself.
All that’s left is to connect it all. Blockchain, take 2.
With security and the (almost too) famous decentralization promised by blockchain, you will soon be much more intimately connected with your daily purchases. Not in spite of your privacy, on the contrary. A watertight, encrypted system with no central authority is clearly a major advancement over your current situation, boiling down to a bunch of apps looking to sell your entire web history to whomever wants it, as often as possible.
Soon, the 42 product choices that made up your grocery list will shrink, as they already do with your subscription to a ready-to-eat solution. Insurers will line up to connect with your Apple Watch and offer the best price based on your health profile. The direct and constant connection between the user and the products they need will clearly force many advertisers to rethink their place in the equation, if there is a place.
Real influence
Well, let’s hope we’ve just experienced the worst years of influencer marketing. Those famous years where, as with all new products, anyone can sell anything. Hopefully, we will soon reach the phase of disillusionment, normally followed by retrospection and finally by the effective and well thought-out use of strategy X. Remember mobile applications 10 years ago…
Because, in all honesty, influencer marketing has probably always been the most effective marketing. Influencers are not new. What is new is the idea that any teenager can call themselves an influencer after selling a few orders of swimwear. Nothing is more effective than a trusted person telling you to try X product or listen to Y show. The influence is there, and it’s here to stay. That’s probably why many CMOs say they increased their budgets for this strategy last year, and plan to do so significantly again this year. Behind these investments is the recognition of something important.
If 2020 has shown us anything, it’s that the spectrum of opinions is always broader than we think. After years of being told that social media kept us in an echo chamber, filled with homogeneous opinions, we’ve been fortunate (or unfortunate) to be exposed to other realities we don’t often encounter. Inequalities, conspiracies, political differences seem to have appeared everywhere, and very close to us. You have probably heard, in your city, your neighborhood, maybe even your own home, someone saying things that could not be more opposite to yours. During these moments, you realized that you had a better relationship with strangers on Twitter than with your own neighbors. This moment of truth is becoming more and more common.
This is certainly one of the reasons behind the proliferation and rise in importance of online communities. They allow people to come together with like-minded people from all over the world. We have long believed that proximity means similarity, and we realize that it is clearly not that simple. People have more friends online, they meet their life partners online, they seek help online, and they experience many of their best moments online.
Clearly, it is in these online communities that people are most likely to act on an influencer’s suggestions. A true influencer who has emerged in a homogeneous group by his leadership, his involvement, his generosity or his relevance. In front of such a person, there is really no marketing plan that can promise a more solid ROI.
Where does blockchain come into play in this perspective? I owe this one to Balaji Srinivasan.
Right now, all influencers are renters. Indeed, their value lies in two or three counters (views, likes, etc.) that they don’t own. If their preferred platforms were to close simultaneously tomorrow, they would lose their economic value at the same time (at least for a while). They do not own their influence. It is circumstantial and non-transferable. It is never safe from novelty, or from disappearance.
Now, what if that influence was treated like a cryptocurrency? What if it was accumulated by person X through his or her actions and actual engagement? If it rewarded relevance and substance, rather than fake photos and clumsy English quotes? If it was attached to a name, and therefore automatically transferable to any platform tomorrow morning? Influence marketing would perhaps regain its credentials. The true value of an individual would become tangible, quantified and sustainable, even in a digital context. Being an influencer would be a right given to everyone in an immutable way, but at the same time the journey of a lifetime, where no novelty can override everything else unfairly. A status that allows someone to take advantage of their authority on any new platform from day one.
And that’s exactly what blockchain can do. It can help restore order to what will likely always be the most successful marketing. At that point, advertisers will have a responsibility. The one to avoid the vulgarity of salesmen selling empty promises to anxious teenagers. To place their votes behind influencers whose authority is concrete, constructive and justified.
Personally, I’m looking forward to it all.
Thank you.
