Blockchain & Its Application in Marketing - Part 3

This is the third and the last post in the series of three posts on Blockchain Technology and its application in the field of Marketing. While in the first post, we discussed the concept of Blockchain in a very simplistic way along with examples, the second post elaborated the concept of Blockchain while also listing the areas in Marketing where Blockchain can be implemented.

This post takes that application scope further and looks at the application of Blockchain to areas which indirectly affect Marketing. As mentioned earlier, these are not the applications for the year 2100, hence may not be fairly imaginative. The idea is to see what can be done tomorrow!
If you have not gone through the earlier two posts yet, please take time and read them before you come back to this post.

First post: Blockchain & Its Application in Marketing - Part 1. Read time is 10mins.
Blockchain & Its Application in Marketing - Part 1

First post: Blockchain & Its Application in Marketing - Part 2. Read time is 15 mins.
Blockchain & Its Application in Marketing - Part 2

So in this post we straight away jump into the applications of Blockchain in areas that influence Marketing in some way or other.

Area	Application
Supply Chain	Inventory Management  What? – Inventory issues like duplication, dead stock, inventory ghosting and incorrect stock update have resulted in lost sales as well as unwanted inventory carrying costs, which inadvertently affect the top-line as well as bottom0line for any company. How? – Blockchain technology, with its consensus based updates as well as decentralized systems ensure that no change can be made in isolation and hence any incorrect manual update is not possible. This would mean that all the involved computers on the system will show the same inventory and there will be no miscommunication at any point regarding the storage, ordering and stock of any product. Also, the transaction trail will ensure that none of the inventory goes unaccounted for. Asset –Traceability in Value Chain What? – Despite all the innovations and development in the field of asset traceability, it is still very difficult to exactly pinpoint the initial source of the product. Issues like in-transit damage or incorrect delivery as well as a precise understanding of the actual location and state of the asset is difficult. For example, where did the diamond that you are going to buy in a ring, actually come from (previous post) and where is a specific diamond you are supposed to receive right now. How? – Each unit of the asset is assigned a traceable ID or identifier and a block (additional piece of information) is added to it as it passes through each step. Also, the Blockchain technology, with its consensus based mechanism as well as decentralized system ensure that no change can be made in isolation and hence any incorrect manual update is not possible. This would mean that all the involved computers on the system will show the same inventory and there will be no miscommunication at any point regarding the storage, ordering and stock of any product. Also, the transaction trail will ensure that none of the inventory goes unaccounted for.                          Blockchain for Asset Management - IBM
Legal	Artist collaboration and Right-Incentivisation What? – Purchase or license rights from content creators (musicians, videographers, photographers) to use their work in campaigns has not been an easy process. It is generally the artists that loses the battle due to difficulty in proving ownership of their work once it is uploaded in the public domain.  How? – Just like a piece of data or a financial transaction that can be tagged with an identified, piece of art like music can also be stored securely. Unlike a centralized system where the powerful parties can manually play and manipulate the system, with the help of Blockchain, the decentralized ledger helps in the record being present on multiple systems and can only be updated through consensus mechanism. This helps artists to be able to claim their work without interference from the industry biggies.  Employee Background Check What? – Background checks of employees is an ongoing process in any organization for all the new employees as well as for the existing ones in case of special circumstances. A lot of money is spent on the process but the information hence retrieved is seldom accurate and as desired. Also, the companies have to go through external agencies and consultancies to be able to manage this essentially internal function.  How? – Blockchain is known to preserve the history of information through identifiers and create a trail for the information by adding ‘blocks’ to make it traceable. Hence, records that are stored and managed using Blockchain technology are easily retrievable and as accurate as it gets. Hence, Blockchain technology will help in making it easy to retrieve correct records and that too in a much simpler way which will be quicker as well as cheaper. The best part will still be the control organizations can have on the process by internalizing it.
Contracts	Smart Contracts What? – Programs that manage and execute an agreement automatically based on certain pre-set conditions and constraints  How? – Blockchain technology brings in security into the traditional contracts and also reduces the cost to verify and execute contracts since its algorithm based which and it aids in automatic execution without any middleman to execute it
Data Security	Identity Protection What? – Identity protection while being a legal and common issue across countries. It does have its implication on Marketing. The fear of data leak makes people aversive towards sharing information and also restricts them to be more open and engaging. That is dangerous for any brand.  How? – If personal data of consumers could be collected, stored and managed in a more secured way that would not only help in enriching the customer profile information, but will also help customers to be more forthcoming. Blockchain technology has a way out. Its distributed ledger makes it extremely difficult for fraudsters to manipulate or steal personal data without leaving an obvious digital trail. The digital trail makes it easy for the network to identify an erroneous record or an attempt to manipulate data. It can them be easily corrected. Hence the record created on the blockchain concept is as good as immutable, securing the data effectively.

Like any new technology or invention, Blockchain has its own challenges which need to be addressed for it to be viable, relevant and scalable. Blockchain is a revolutionary technology which has the ability to transform how businesses are done. However, before jumping in to the fan-fare, top leadership at any organization needs to understand the scope and strength of this technology and be able to map its objectives clearly against the adoption of Blockchain.

In any case, we are set to transact, but not notice may be, with lot of businesses in future which will be using Blockchain as the fundamental concept for much of their operations. Behold!

Cheers,

Blockchain & Its Application in Marketing - Part 2

This is the second post in the series of three posts on Blockchain Technology and its application in the field of Marketing. While in the first post, we discussed the concept of Blockchain in a very simplistic way along with examples, the next two posts including this one, are intended to use that knowledge about Blockchain and understand how the concept can be used in the field of Marketing. 

This post will first explain the Blockchain technology again with a little technical detail since we need to know what the technology can bring in for the Marketing areas. Later we bring out the possible applications. Mind you, these are not the applications for the year 2100, hence may not be fairly imaginative. The idea is to see what can be done tomorrow!

If you have not gone through the first post yet, please take time and read it before you comeback to this post. Read time is 10 mins.

Blockchain & Its Application in Marketing - Part 1

In the previous post we saw that Blockchain is a concept which at its core has ability to create, process, store and manage data efficiently. It does this with the help of three of its inherent properties:

• Distributed ledger: Multiple entries across different systems (‘Distributed Records’ across various machines, hence the name)
• Records changed on one system will be easily identified and corrected
• Consensus mechanism: Any update that has to be made to a record must have consensus of all the machines in the network for it to be updated
• The changes cannot be made by any one of the record holder but has to be done based on the consensus
• Decentralized storage that helps in creating an indelible trail of transactions which makes the system transparent, shared, secured and watertight. 
• The ownership of data is distributed among various systems and users

Hence, Blockchain technology (while many argues it is a ‘concept’ not a technology in itself, we would not get into that debate in this post) has ability to manage issues like data security, data transparency, data manipulation, real-time tracking and ownership of data, for any given business scenario.

Without going into much technicalities, let us understand the above points through a simple example:

A data unit is stored on a system under the “Name” tag as ‘Tapish' in a bank.

Case without Blockchain: Someone, by mistake or intentionally writes the name into a document as Tapishh, with an extra h at the end.

Now, the data storage is not on the basis of distributed ledger, hence there is only one data set where the name has been updated as Tapish’h’. After this, nobody knows what was the real name?

Since the updation worked on a non-consensus mechanism, that one person was allowed to change the record all by himself.

Fig 1: Three Blocks of Information

Fig 2: Data Manipulation in Case of Blockchain

The data was kept at in a centralized manner at one place with a clear ownership lying with the bank. Hence, no one but bank can change it again, which gives bank the power to collect, record and store without any restrictions.

Fig 3: Applications of Blockchain in Marketing

Case with Blockchain:  Due to consensus mechanism, that one person will never be able to make change on his own as every change needs consensus between multiple parties.

Due to it being distributed ledger, any change made on data on one system which does not reflect in other systems, will not be accepted.

Since the data is decentralized, the bank does not have the authority to unilaterally change the data hence democratizing the right for updating information.

Now we quickly see the concept on which this works in a very simple way. The core of this concept is how the data is stored and managed. The data is kept in a block. Each block or data set has three parts:

• Data: Any piece of data unit. In this example, a name, Tapish
• Hash: Identifier of the block. In this example, AB12
• Previous Hash: Hash: Identifier of the previous block. In this example, For Block 2, Prev Hash AB12 , is actually the hash of Block 1.

As you see in the second picture, an intended manipulation in Block 2 (From Tapish to Tapishh) has ended up changing the Hash of Block 2 since the data is not the same anymore as it was. It is Tapishh instead of Tapish.

The moment this Hash changes, there is a mismatch between the Previous Hash Value of Block 3(CD34), which was nothing but the Hash Value of Block 2. Hence this change has been identified as being non-consensual, and is not reflected in various ledgers.

This manipulation can then easily be pointed out and corrected with Blockchain concept, which would either be impossible or difficult with high cost involved in case of earlier concepts without Blockchain.

Now, when we know of the clear advantages that Blockchain technology bring to the table, let us jot down where in the field of Marketing can this be used?

We now look at some of these areas where the introduction of Blockchain has the potential to bring phenomenal change.

Area	Application
Advertising	Delivery and Engagement Verification       What? – There is significant fake inventory that eats up major advertising dollars via domain spoofing. An estimated $16 billion of advertising dollars have been spent in 2017 on fraudulent sites. Brands are usually dependent upon a host of middlemen for making their product available to customer’s door through online channel. Then there is also a lot of opaqueness on whether and how many of the audience actually saw the ads and for how long.        How? – Blockchain can allow resellers to label their inventory as legitimate with public Blockchain (Public Blockchain are created when the data need not be private and cane viewed by others), that means it is easily verifiable and near impossible to fake. This is possible through decentralization and identifier tagging aspects of Blockchain technology. It can also allow to add information blocks to the specific ad piece with the audience information which will be then stored through decentralized system to various systems making it virtually un-hackable.  Partners Incentive Management         What? – Incentives to partners for advertising efforts is a key area in the advertising domain. To ascertain the attribution and its magnitude, in order to incentivize the partners and vendors, a marketer requires data on the performance of the advertisement. This could be a running ad or a campaign, and any leads or conversions it generates. However, this can be done only if there is sufficient integration and cross-platform collaboration across platforms and channels. This level of data is hardly available and even if it can be weaved together, requires expensive efforts and time with limited assurance of accuracy. It is often not clear as to who owns the data and who should be incentivized.       How? – Blockchain with the help of its identifiers (block added with every piece of data for every change made creating a chain of blocks, hence ‘blockchain’) helps in creating a trail of events which can be easily tracked for each source and each destination. So the advertiser/publisher knows which agency/middlemen should be paid what.
Consumer Engagement	Loyalty Program Management What? – Poor loyalty program integration not only costs companies dearly but they also are wildly unsuccessful in their single point objective of engaging with customers. This is caused by poor integration of reward programs, inflexible reward structures & lack of visibility of the transactions for the company as well the customers. Also that the loyalty programmed are company specific and at best alliance specific. This means that customers are bounded in terms of engaging only with the limited and pre-defined companies through the loyalty program.  How? – Blockchain with the help of its identifiers (block added with every piece of data for every change made creating a chain of blocks, hence ‘blockchain’) helps in creating a trail of each transaction and event(occurrence) which can be easily tracked for each source and each destination. So the advertiser/publisher knows which agency/middlemen should be paid what.  Customer Experience What? – Customer reach-out, engagement, relationship and bonding are some of the areas which have a strong need of record keeping of customer data which is not just collected and stored in a secured location, but can also be processed and managed to create real-time insights. This in turn should lead to positive customer experience. However, more often than not, companies find themselves in a tight spot while dealing with customers, some of them being associated with the company for a long time. This is due to poor record keeping, incorrect records and highly centralized information storage. How? – Blockchain with its impermeable record keeping mechanism with the help of identifiers, and its decentralized ledger helps in keep data not only up to date but also accurate resistant to any erroneous update. Each record is saved with an identifier block which not only stores the changes made to the data but also keeps the history of the record. Decentralized ledger help in maintaining the sanctity of the information with the help of consensus mechanism.
Influencer Marketing	Reach and Engagement Verification What? – Influencer marketing in the age of social media has adopted a whole different meaning. We have seen the rise of many influencers across the globe pan social media platforms who engage with their audience through their content. Brands piggy ride on their popularity, to achieve a ready-made set of target audience. However, there are various difficulties identified in this alliance such difficulty to ascertain if the claimed reach and engagement levels of an influencer are real. Is your dollar tagging with the right influencer? How? – Blockchain’s decentralized ledger would help in storing the correct information about the influencers and will also store all the related information like content publishing and magnitude and intensity of engagement with audience. This will not only bring out these details for each influencer in public, hence ensuring right fit that brands could find with influencers. This can also help in arriving at precise incentives that could be paid to the influencers. Authenticity of Followers What? – Bulging one’s audience list through unscrupulous measures including having bots as followers are some of the ill practices on social media platforms. In a list of thousands to millions of followers it is virtually impossible to find out how many of these followers are bots and how many are real. This has an effect on marketing strategy and marketing dollars that are paid for the influencer marketing, hence plays a critical role for the marketer. How? – Here again the decentralized ledger of Blockchain helps in identifying and segregating the genuine users from the bots. It is done by scrutinizing the activities conducted by the bots on the social media, which is identified by the means of the block or the identifier that is attached to it for every transaction or event. Consensus mechanism helps in ensuring that manual intervention is not possible and hence accurate details about bots is made available.
Sales	Online Sales What? – Brands are usually dependent upon a host of middlemen for making their product available to customer’s door through online channel. While online and direct channels have their own advantages, the overall management of the online channel is highly depended on the access, security and storage of customer and product information. Frequent data security thefts have opened fissures on this much touted channel of marketing.  How? – Blockchain will help companies manage a one stop solution for its product with secured document trail and integrated functions. Its consensus based decentralized ledger makes it virtually impossible to erroneously or otherwise manipulate the records making the online trail very secure and convenient. Sales Process What? – Companies and executives spend a lot of time in segregating leads and creating a historical data base for right focusing, which is still erroneous due to lack of veracity of data How? – Blockchain can ensure that the data available is verified and has a genuine source of each bit. This will help in reducing time in cleaning data and poor sales effort RoI.
Channel Management	Claims and Refund Management What? – A significant time of company executives and channel partners is lost in trying to resolve unsettled claims and refunds which are usually buried in tons of emails and excel sheets which are difficult to make sense of . These often lead to conflicts and poor performance and deteriorated relationships between the organization and the channel partners. How? – Blockchain with its strong trail mechanism with decentralized network architecture would ensure that all involved have the same information at all the time which is not only accurate but also consensual. Sales and Partner Incentive Management What? – Schemes and trade discounts are effective ways to push sales and increase channel demand. This also comes with a huge effort in terms of managing historical incentive payments, defining incentive payouts and managing records of all payouts. Many times this lead to issues and conflicts due to lack of transparency. How? – Blockchain technology will allow to store and manage the historical performance and payout to channel partners while also recording the transaction wise history of schemes performance, hence making it much easier and transparent for everyone.

That’s it for this post. However, we have just discussed a handful of areas here and pretty sure you can think up of a lot many if you have understood the basic concept of the Blockchain technology and where can it find its application. 

In the next post, we see some more applications of Blockchain technology which are indirectly related to Marketing, like Supply Chain, Legal Contracts and Identity protection for Marketing.

Cheers,