Blockchain Will Bring Trust Back to B2B Advertising and Marketing, and That’s a Good Thing
Featuring Craig Weiss, COO, True Influence
Blockchain is going to change everything.
A quick glance at the trade press will tell you that emerging blockchain technology – which creates distributed and incredibly secure ledgers of transactional data – will be the backbone of Web 3.0, as this overview piece at DMNews puts it. IBM CEO Ginni Rometty has gone so far as to say that “once widely adopted, it will transform the world.”
For B2B companies, where data is the engine for programmatic Account-Based Marketing (ABM) campaigns, the impact will be monumental. The pundits declare that blockchain’s distributed data storage and verification capabilities will shift market dynamics away from who owns the data to who can make the smartest use of the data.
All those pundits are right.
Blockchain As the Trust-Broker
These changes are not going to happen overnight – despite the headlines, blockchain tech is still embryonic. But it’s coming. When massive, data-driven players like NASDAQ and the Interactive Advertising Bureau’s Tech Lab declare their commitment to a technology, you know it’s coming of age.
In the next couple years I expect to see blockchain-based solutions hitting the market that will transform the way the massive amounts of marketing data being collected every day is stored, distributed and accessed.
The exact format of these solutions is still to be determined, but they will transform the core commodity of trust — trust by consumers that their data is being used safely and responsibly, and trust by marketers and advertisers that they are getting what they pay for.
Blockchains represent the first fundamental shift in decades of how power and trust are held in these relationships. Banks once had all the power in financial markets, with data stowed away in conventional relational databases. But blockchain-based cryptocurrencies such as Bitcoin and Ethereum have disrupted that model, and there is no turning back now.
A similar revolution in data-driven marketing is coming.
How Blockchain Will Change Everything
The technical details of how a blockchain works have been covered extensively (this 2016 primer at CIO.com is as good as you will find).
The key points to understand, in terms of revolutionizing the trust dynamic in B2B marketing, are:
Distributed: The ledger of transactions that constitute the blockchain is distributed across numerous nodes within an infrastructure or network. In other words, the blockchain creates synched copies of itself in a lot of locations.
Authenticated: Each transaction in the blockchain is digitally signed to verify its integrity.
Verified: When a change is suggested to data in a blockchains, the numerous nodes where the blockchain is distributed confer to determine if the signature and history are valid. Changes can be accepted or rejected, based on this consensus between the synched copies of the blockchain.
Bitcoin, most notably, uses an anonymous public ledger as the backbone of its cryptocurrency. Some other blockchains in development for business employ private, permissioned ledgers that allow only known actors to participate in transaction activity.
I believe it’s the later model, of private blockchains, where third-party vendors will soon begin rolling out solutions that will broker the trust that’s so often lacking in B2B Marketing. The middleman is not necessarily going away, despite today’s headlines and buzz over smart contracts and how they eventually will employ cryptocurrencies and coded business engagement rules to get rid of pesky lawyers and real estate agents.
Blockchain’s beachhead to B2B Marketing will probably start with limit partnerships, with the middleman managing the tech that creates the trust. These solutions can be open to collectives of data providers, advertising platform operators and marketers, bringing transparency to business processes that are now often muddled in uncertainty and bad data.
The key issues these blockchain solutions will tackle are:
Online Advertising Fraud
In today’s online ad market, you don’t necessarily know what you are buying. You simply have to trust the platform. In a market with nothing but reputable players, this approach could hypothetically work. can work. But this is the real world.
How bad is ad fraud? Businesses were estimated to lose more than $16 billion to fraud just last year. Ad buyers today simply accept churn and fraud as part of their ROI calculations. If fraud can be completely backed out of the equation, that’s a game-changer. The opportunity to elevate trust between buyer and seller is the biggest change the blockchain will bring to adtech.
There is a huge area of fertile ground here, and it’s where the real innovators are thinking right now. There is a ton of legacy tech and business inertia here, so the disruption will not be immediate, but it is coming.
Traditional, central databases and storage models simply are not defensible. Need proof? CSO recently compiled a list of the worst breaches of the 21st century – credit history, health information, ecommerce records, government personnel files. Absolutely nothing is safe.
The total lack of confidence by consumers and business people that sharing their personal data is safe has driven industries and governments to develop privacy standards, such as Europe’s GDPR, which I discussed in a recent post. These policies are fine and good, but by their nature they have to be largely reactive and spell out penalties when breaches occur.
Blockchain’s distributed model offers an exponential improvement to ensure breaches don’t happen in the first place. When data is not stored in a central area, can’t be attacked centrally.
Privacy is driving a lot of the innovation that’s happening today. The winners will be the ones who can build trust with consumers in a model where they are comfortable sharing data, which drive successful B2B marketing and advertising.
Advertising Market Consolidation
The Big Four (really, increasingly it’s the Big Two) have eaten up the online advertising market. Google and Facebook now control more than 60 percent of online ad spending the U.S.
As blockchain solutions emerges, you will see money flow back out of these systems – particularly if the blockchain can aggregate smaller ad platforms into a shared model. Again, I see private ledger solutions arising in the next couple year to act as the “trust broker” middleman between ad buyers and consumers. These companies won’t own the data; they’ll just ensure it’s accurate and safe.
This is an existential threat to the Big Four, and they know it. They are tackling the threat posed by blockchain hard, and they are leaders for a reason. Still, this kind of disruptive innovation usually comes from the outside, not the established power structure.
Third-Party Marketing Data Quality and Simplification
I also think blockchain solutions will dramatically improve the quality of third-party data available to B2B Marketers. Again, it boils down to the core issue of trust – if business decision-makers trust that their personal data is going to be safe, and used only in ways as they’ve consented to, they will be far more likely to share accurate info. And accurate, recent info is the key to successful ABM.
Private, middleman blockchain platforms will allow participating third-party data collectors to validate against the distributed consensus – in the most simply use case, “we know that that email address’s job title is Director, not CEO.” They can also enforce defined privacy and use rules, as well facilitate a standard format for ease of integration to Marketing Automation Systems and other key tools.
Some tech futurists suggest that public blockchains might eventually allow consumers to opt-in directly to what amounts to a “smart contract,” where marketers will simply transact directly with the blockchain to access data. But I think that’s a long way off. Third-party data sources, like True Influence’s InsightBASE intent signal monitoring service, will continue to play a key role in collecting meaningful data in a purposeful, targeted manner for B2B marketing.
Blockchain solutions will just make third-party data more trustworthy and even more valuable.
Trust is the Key
Look, we are living in an era where we can’t even trust the news we read online.
Untrustworthy ad performance and targeting data has reached a critical level for B2B Marketers, and current technology and market dynamics just don’t offer a real solution.
Blockchain is going to change that, and it’s shift that will bring a new level of credibility and success to B2B Marketing campaigns.