Author | Campbell R. Harvey

Source | Shiji Business Review (ID: efuture555)

In the marketing and advertising industry, blockchain technology has more However, the survey data of "CMO" shows that only 8% of companies believe that blockchain technology plays a medium or important role in marketing.

Although the concept of blockchain has received a lot of hype, the obvious result is that blockchain technology is not well understood. Such "conceptual hype + lack of in-depth understanding" has caused certain obstacles to the in-depth application of blockchain technology, causing marketers to adopt a "hesitant and wait-and-see" attitude towards this technology.

Blockchain technology has the characteristics of transparency, stability and security, which makes this technology widely used in supply chain management (SCM, SupplierChainManagement), smart contracts (Smart Contracts), and financial reporting (Financial Reporting). It has reliable and trustworthy advantages in information management such as IoT (Internet of Things), private medical treatment, and even power grids. At the same time, the data transfer model of blockchain technology greatly reduces transaction costs, enables verification and effective exchange of ownership, and opens the door to real-time micropayments. This information exchange model reduces payment friction, some intermediaries and intermediate links that make a living disappear, and it becomes possible for consumers to own and control personal information. All of the above allow us to see the disruptive potential of blockchain technology in information management, transactions, marketing and other fields.

Today, financial transactions have considerable transaction costs. Retailers need to pay a 3% payment processing fee to credit card companies (Translator's Note: 3% is the US processing fee standard), and payment processing fees at gas stations are even higher. Sellers who open stores on eBay and Shopify need to bear payment fees and transaction fees, transaction fees for paying with PayPal, etc. All of these fees add to the cost of goods and are often passed on to consumers. Therefore, with the widespread use of credit cards and debit cards, many merchants have set consumption limits to avoid loss of profits caused by excessive fees.

Blockchain technology will significantly reduce financial transaction costs, even approaching "zero transaction costs." Even small transactions will enjoy this profit. In the financial field, financial giants such as Mastercard and Visa are already using blockchain technology to handle local currency remittance business. The entire process is safe and transparent, which brings more choices and benefits to merchants. Cost comparison opportunities instead of relying solely on credit card transactions.

In the field of marketing and advertising, blockchain technology also has a profound impact. Currently, marketers are already using shared information purchased from third-party social media (such as Facebook) to obtain customer marketing data. This move undoubtedly illustrates the marketing value of data and also points to the trends and potential of digital marketing. .

However, using blockchain technology, merchants can use micropayments to incentivize consumers to share personal information without the need for intermediary merchants. For example:

A grocery chain can pay consumers $1 for installing their APP;

If consumers agree to enable location tracking, they can get another $1 Rewards;

If consumers open the APP "1 time per day" and spend at least 1 minute on it, retailers can pay them a few cents or store points to reward customers for their loyalty Spend.

During this period, merchants will push promotions and special offers to consumers.

In fact, consumer customization opens up some legitimate marketing mechanisms, such as providing personalized marketing or prices. This is one of the main values ??of consumers voluntarily providing various data.

This method of marketing estimation derived from real consumer data will not only reduce the risk of fraud caused by anonymous promotions, but also reduce the various risks of promoting APPs due to incomplete and inaccurate consumer information. Application troubles.

The same method as the above method of promoting the use of APP can also be used for "smart contract" (a virtual agreement that, due to the support of blockchain technology, does not require a middleman to confirm, audit and verify identity) marketing middle. Based on the support of blockchain technology, consumers will activate this "smart contract" when they subscribe to emails or bookmark registration reward programs. After that, whenever consumers interact with emails or advertisements, small incentives will be automatically saved. into consumers’ wallets. This brings us to our next topic.

A similar model can be used in website promotion advertising business, that is, motivating consumers through compensation to drive page views for each advertising page.

In 2016, a study released by HubSpot showed that most Internet users do not like pop-up advertising windows and mobile window ads, believing that online advertising seriously interferes with vision and has certain intrusive and damaging negative effects. For this reason, more and more users are installing ad blocking tools. This widespread trend of distaste has had significant punitive consequences for the advertising industry. It is estimated that ad blocking will cost publishers a whopping $35 billion in lost revenue by 2020.

With the support of blockchain technology, marketers can rethink their advertising, marketing promotion and revenue models, that is, consumers who pay attention to marketing and advertising can directly pay them "small incentives" "Of course, this method will also get rid of the middle layer of advertising distribution, Google or Facebook.

It is believed that the “duopoly” of Google or Facebook in the Internet and digital advertising will soon be threatened by the application of blockchain technology. Although keyword-based search will not completely disappear, its advantages will no longer exist. Ultimately, individuals will take control of their own private online profiles and manage their own social networks.

With the help of blockchain technology, companies can bypass some of the current social media “giants” by interacting directly with consumers and share the rewards of browsing ads with consumers. In 2016, Google reportedly generated an average of $73 in revenue per active user through advertising. Of course, $73 is just the average return for more than 1 billion active users, and we can reasonably estimate that the revenue Google brings to some highly valued people will be far more than $1,000. Just imagine, when companies use blockchain technology to implement "voluntary browsing advertising" and deliver effective product consumption value to consumers, how effective will the marketing be?

With the help of blockchain technology, advertising delivery and the degree of consumer participation can also be confirmed to avoid excessive advertising and the abuse of email advertising. Because excessive advertisements and flooding of email advertisements will not only make consumers bored and lose motivation to purchase, but will also aggravate consumers and create resentment, thereby blocking advertisements. For example, consumers who have already purchased the product will not be willing to receive it anymore. Any advertising placed by the Company.

Blockchain technology can also be used to verify the source of marketing information. Micropayments will effectively destroy large-scale phishing spam emails, weaken the interference of ineffective marketing on people, and purify the Email environment.

Approximately 135 billion spam emails are sent to users every day, accounting for 48% of all emails sent. With only one reply for every 12.5 million emails sent that are considered "junk," the waste and disruption are staggering.

Using blockchain technology, as long as the recipient is paid a small marketing fee, spam can be filtered or blocked through these small marketing costs. With the help of these marketing costs, companies can help identify the target emails. Marketing or trading to consumer groups with independent wishes.

A similar situation is that on the Internet, every time a user clicks on a link, a small micropayment transaction may be generated.

In most cases, users only need to pay a small fee, for example, it only costs one cent to read a news article. This kind of micropayment will be a powerful weapon in defeating "denial of service attacks". (Translator's Note: Denial of service attacks, referred to as Dos attack. Dos attack is a type of network attack. This attack has always been a problem that cannot be reasonably solved. For example, an attacker recruits a robot to attack a website, Sending millions of requests causes the website to crash due to full cache, slow response or even outage).

Blockchain technology can also prevent robots from setting up false media accounts, sending a large amount of false information to users, and stealing the online advertising revenue of big brands. Online authenticity is indeed baked into blockchain technology.

Keybase.io is a company dedicated to solving the problem of social media fraud, using blockchain technology to allow individuals to prove that they are the legitimate owners of various social media accounts. This makes marketing impact easier to track and marketing spend easier to demonstrate, both of which represent major breakthroughs for the marketing industry.

As of 2016, fraudulent or deceptive display advertising resulted in a loss of $7.6 billion, and this loss accounted for 56% of total display advertising revenue. In the next few years, this number is expected to increase. will rise to $10.9 billion.

Using blockchain technology to track advertising display activities, marketing organizations can monitor the execution of the entire automated advertising campaign to ensure that marketing support is used to promote return on investment (ROI), and can directly quantitatively analyze marketing The input and output of activities generated by each user and each email.

By associating small marketing behaviors with micropayments, blockchain technology solves these attribution problems in industry operations and management that have troubled marketers for decades.

In addition, ordinary people who create popular new media content, such as some highly sought-after viral videos or social posts, can receive "rewards" every time they are clicked, which will all be attributed to " Blockchain Technology”. But the current situation is that unless their work is published on a subscription-based online platform or channel, they are not paid a penny.

In all these blockchain application scenarios, content creators have the right to create and manage their own successful works.

Coupit is both a cryptocurrency (Coupit Coin) platform and an open market where businesses and individuals can sell their products and services. The difference is that Coupit is an e-commerce platform powered by blockchain technology, and Coupit is preparing to maximize the use of blockchain technology to improve the impact of its marketing content.

Based on the support of blockchain technology, the company’s marketers can intervene in the development process of consumer loyalty programs and group buying alliance programs. Consumers can exchange their own rewards and offers with each other, and marketers can easily differentiate between dormant and loyal customers. This visible, transparent, and easy-to-operate means helps marketers create personalized marketing prices and promotions for customers, thereby expanding their marketing effectiveness.

Even if aggregator analysis or intermediary analysis is necessary, micropayments allow businesses to bypass ad blocking tools, and individuals will have control over the amount of personal information they share and will be served ads directly. With the rewards brought by views, many privacy issues will also be completely resolved due to legal protection.

Take the Brave browser as an example. This new web browser developed by Brendan Eich, co-founder of the Mozailla project and creator of the JavaScript language, in addition to providing a new level of privacy and security protection, Brave enables a blockchain system designed to transform the relationship between users, advertisers and content creators. Its “Basic Attention Tokens” (BATs) are tokens of the blockchain-based advertising platform.

The project aims to improve online advertising by eliminating third-party ad exchanges, protecting user privacy, reducing ad fraud, and rewarding users for their attention by sharing revenue with them. _ Translator's Note) will allow publishers and advertisers to monetize value-added services to capture part of the growth associated with advertising, 73% of which is led by Facebook and Google.

As blockchain becomes mainstream, all intermediaries will need to adapt their business models. The decision-making chain changes structurally:

Individual consumers will be able to better control how they share their private information;

Consumers will decide how to spend their time Interact with advertisers;

Spam and phishing scams are blocked, and from a cost perspective, the more spam they send, the less sustainable their business will be.

From an enterprise perspective, this may mean a higher level of control over the traffic quality of all marketing promotions, as well as a better understanding of consumer behavior based on data management.

On the other hand, ads cannot run without a transactional fee being paid to each affected individual. Consumers will also be motivated to post real and accurate social information online, such as describing content of interest, etc., and they will also pay for it. Instead of paying marketing fees to social media middlemen, marketers will pay directly to the end consumer. When the target consumers are high-value customers, the incentive mechanism will also increase, and the marketing will directly hit the bull's-eye.

Blockchain technology has great potential in reshaping social trust, making social trust more powerful, increasing visibility, connecting multiple resources, and rewarding individuals for their contribution to transactions. Marketing activities and the advertising industry have will be fundamentally affected by these changes. Not only for the company's top marketing leaders (CMO, chief marketing officer), but also for decision-makers such as corporate strategic planning, finance, and technology decisions, pushing them to design and implement blockchain as a priority business matter. From an operational perspective, companies may establish new high-level trust models with consumers and ultimately connect consumers with products through credible marketing campaigns.

Marketing managers and technical managers are likely to use blockchain technology to reshape corporate customer relationships. Early introduction of this far-reaching technology will help companies seize market opportunities and benefit from this technology. Benefit in advance from technologies that will be widely used in the future.

About the original author:

Campbell R. Harvey is currently Professor of Finance and J. Paul Sticht Professor of International Business at the Fuqua School of Business, Duke University. He served as the 2016 U.S. President of the American Finance Association. Professor Harvey is an investment strategy advisor to Man Group, PLC, and a partner and senior advisor to Research Affiliates, LLC. For the past 5 years, he has taught blockchain courses at Duke University: Innovation and Crypto ventures.

Christine Moorman is T. Austin Finch, senior professor of business administration at Duke University’s Fuqua School of Business and the Journal of Marketing 》 (Journal of Marketing) Editor-in-Chief.

Marc Toledo, a senior associate focusing on blockchain and digital transformation at PwC, graduated from Duke University with an MBA and worked at the World Bank and Apple During this period, he led large-scale projects related to cybersecurity, machine learning, and artificial intelligence.