Blockchain is gaining momentum and industries across the economy are considering how it might impact the way they do business. Whether it’s Finance, Healthcare or Art Collecting, blockchain will arrive in your market eventually, so now is the best time to envision how it will become a part of your future.
What is Blockchain?
Blockchain is a network, living in the cloud, managed by volunteers called miners. These miners record activities and transactions in succession, commonly referred to as a ledger. Once recorded, the information cannot be changed. This creates a permanent history of changes and creates an irrefutable means for tracking provenance. This IBM video provides a great example of blockchain in action, illustrating how it would work in the diamond industry.
Blockchain and Advertising
In the world of digital marketing and advertising, I’ve imagined a model for how the agency might be changed by blockchain. At the core, agencies are relationship managers. They manage relationships across brands, media publishers, platforms, ad tech, martech and consumers. It isn’t difficult to see how a secure and connected system of relationship management (blockchain) could make the whole operation run more smoothly. In the model below, I’ve outlined two types of activities — Interdependent (functions that follow others) and Discrete (functions that exist regardless of what else is happening). Let’s take a look at how blockchain can impact key elements in an agency model:
In this agency model, it’s easier to understand how agreements between client and agency, agency and media outlet and agency and tech partner all get recorded. The agency cannot contract with the media venue on behalf of the client unless the MSA is in place and Media Authorization has been recorded. In channels like paid search, this eliminates the possibility of over-spending. This connected intelligence also eliminates mistakes like incorrect flight dates or targeted geographies. If these parameters are all recorded in the Media Authorization, which the Search Engine IO or user interface refers to, there’s no more room for error. This will save brands and agencies millions of dollars and increase profitability all around.
Data, Targeting and Media Execution
It’s a bit more esoteric when we think about how data and insights might be housed in blockchain. Humor me as I lay out one theory — this is less linear than the contract model. There is no real starting point because data just exists. Where it starts is wherever you choose to tap into it:
- Data is collected and recorded.
- Analyses are made and insights are derived.
- Insights become defined characteristics, segments, profiles and parameters.
- Characteristics, segments, profiles and parameters are recorded in blockchain.
- Digital platforms and/or ad tech refer to blockchain when setting-up targeting.
- Creative agencies refer to blockchain when developing creative.
- Creative is recorded and housed in blockchain.
- Ad tech pulls creative from blockchain.
- Digital media buy is executed.
- Engagement data and cost are recorded in blockchain.
What is the potential impact? More targeted and accountable media buys, simpler, more automated optimization, less time spent on organization and version control and project management becomes more streamlined. The whole agency planning and buying model suddenly becomes simpler, repeatable and more precise with new levels of transparency for all stakeholders. Agencies are able to develop teams of miners.
Blockchain’s Impact on Finance and Billing
Finance is a vertical that is embracing blockchain. In the Agency world, blockchain would eliminate need for reconciliation, make-goods and invoicing in general. There would be no more need for 30 or 60-day payment terms because everything from the cost of the advertising to the cost of ad tech and fees would be recorded and available in real time via blockchain. Payment would be immediate and Finance teams would become miners who work with cryptocurrency, moving payments to the various ledgers or chains within the organization to cover overhead and investments.
When Will Blockchain Be Mainstream?
Blockchain sounds amazing, no doubt about it. I see four-hour work days, more strategic and effective marketing campaigns, more relevant consumer experiences, increased profitability and little to no room for error or dispute. That should lead to happiness across the board! So when will Blockchain become mainstream and fully adopted by businesses? According to Harvard Business Review, there are four quadrants of adoption, and we’re not even in the first quadrant yet.
While blockchain is gaining momentum, we clearly have a long way to go. However, now is the time to start thinking how your business can implement it.