You’ve probably heard about Bitcoin, and maybe you’ve heard about blockchain, the underlying technology that makes Bitcoin possible without any centralized authority. But have you considered how marketing will be upended by this technology?
Bitcoin is the tip of the iceberg, with the decentralization that lies below the surface having much more important ramifications for marketers. We are still at least a year away from this disruption, but marketers should start getting up to speed if they want to be prepared for the change decentralization may bring.
We’ve seen this movie before
In the mid ‘90s, marketers heard about email and the World Wide Web. Then they heard about the internet. Only after that did they start to understand how dynamic and interactive marketing could be thanks to these technologies.
In the mid 2000s, disruption happened again. Marketers heard about social networks like Facebook and Twitter. It took some time, but marketing efforts adapted to the new ways customers were connected and empowered.
Marketers who recognize that blockchains represent another seismic shift have a large opportunity in front of them. History may be repeating itself.
Why blockchains aren’t hype
As a 20-year veteran of technology marketing, I’ve seen plenty of headlines like (these are all real):
- “Six Ways that Google Wave is Going to Change Your Business, Career, and Life”
- “How Vine, Twitter’s New Video Service, Will Change Your Business”
- “5 Unexpected Ways Meerkat Will Crush It For Sales and Marketing People”
We’re used to overhyping things. Heck, as marketers, part of our jobs is generating excitement. We’re naturally a bit cynical of a claim from any marketer other than ourselves.
The case for blockchains and decentralization comes down to 3 points:
- It’s already happening
- The pace of life requires it
- The future needs it
In the “it’s already happening” category, you have Bitcoin. Nine years old and it’s still going strong, admittedly with some volatility, but it has never been hacked and is recognized as a store of value.
Then, you can add in the fact that the DTCC plans to use blockchain to settle its $11 trillion in derivatives trades, Homeland Security is looking at blockchain to track goods and people across borders, and the FDA is looking at blockchain to help with population health management. And that doesn’t even touch on the numerous efforts within the Financial Services industry.
As for the “pace of life” argument, it’s simple: If you want to email, text, share a picture, file or video with anyone in the world, you can do it instantly. Yet, if you want to transfer something of actual economic value, say… money, the title to a car, apartment, or house, rights to a song or a painting, or stock, it can take days or weeks. Time is money and these slow systems are costing us. Blockchains will solve many of these issues.
Finally, the internet of things requires it. The billions of devices that are coming will share information with each other and pay/get compensated for doing so at the micro-transaction level. The volume of transactions demands an internet-friendly way of making payments, and blockchain-based cryptocurrencies make the most sense. Your smartwatch isn’t going to make a credit card payment to a charging station for 2 cents worth of power, given the overhead fees involved, but a blockchain-based system can and will facilitate such a transaction.
And if that isn’t enough, Marc Andreesen provides additional reasons.
What all this means for marketers
Many of the “givens” of marketing as they currently exist could come under pressure.
- Individuals, not brands, will control access identity and personal information through services like uPort, MetaMask, Blockstack, or Keybase.
- Brand affinity will align to decentralized protocols that represent a set of core values. For example, the people who choose to participate in a censorship-resistant marketplace like OpenBazaar instead of eBay.
- Value will get created not by owning customer data, but by how companies help customers use, interpret, and interface with data. This is how Coinbase competes with BitGo, Jaxx, and LedgerWallet to interface with the addresses you control on the Bitcoin blockchain.
- A marketer’s claim will never be accepted as is. As Jack Trout wrote, “Claims of difference without proof are really just claims.” The supply chain, for example, will become a key part of the value proposition. Witness how Walmart plans to blockchain to track pork provenance in China.
- Assets like loyalty points and coupons may become freely tradable and interchangeable via services like ShapeShift. Loyalty points alone won’t be enough to lock customers into a relationship.
- Attention won’t be free. Customers will use social media platforms like Steem where attention and participation are rewarded and earned. Marketers will need to engage in a meaningful way to warrant engagement, and they won’t be able to buy attention. (Note: This will likely impact email as well.)
This is just the beginning and doesn’t even touch on factors such as:
- asset programmability which could impact budget tracking and management,
- prediction markets like Augur and Gnosis which could impact forecasting,
- anonymous currencies like Zcash and Monero that customers will want to use, and
- the fact that companies like Microsoft and IBM are “going big” in blockchain solutions already.
Much like how few people could imagine the business models of Spotify, Uber, Seamless, or Hulu back in the ‘90s, few can currently predict how blockchain will evolve. However, the data points are amassing that blockchain technology is for real.
What you can do now
Companies and marketers often ask me what they can do now to begin preparing. They want to “future-proof” their businesses and their careers. They also want to know what leading startups such as OpenBazaar and Storj are doing. (Disclosure: Both are clients of my company.)
After pointing them to the free e-book, “Blockchains in the Mainstream,” which features 33 of the biggest names in the industry offering their prognostication, I suggest the following exercise:
- any asset can now be digital,
- all customer transaction data is shared among all the competitors in the industry,
- business and legal rules could be “hard-coded” into asset itself,
- you have to pay for customer attention at every touchpoint, and
- there are no third-party intermediaries.
How would you build a business, a marketing function, and a customer relationship in that environment?
Doing this now is like taking out an insurance policy against disruption or disintermediation: It’s worth the premium. As William Gibson put it: “The future has arrived — it’s just not evenly distributed yet.”
Jeremy Epstein, CEO of Never Stop Marketing, has 20 years of international marketing experience in helping to bring innovative technologies into the mainstream. Most recently, Jeremy was VP, Marketing at Sprinklr which grew from a $20 million valuation and 30 people to $1.3 billion valuation and 900 people in 3 years. Jeremy currently works with some of the leading and most innovative companies in the blockchain/decentralization space including OB1 and OpenBazaar. In December of 2016, he edited and published a collaborative eBook with 33 of the top influencers and thought-leaders called “Blockchains in the Mainstream: When Will Everyone Else Know?”