Przemyslaw Koch/123RF
 

Blockchain in Marketing: 7 Possible Use Cases

  • 26 November 2018
  • Sam Mire

Marketing is a relatively broad concept that encompasses the tactics used to promote and sell a product or service, including advertising, market researchers, loyalty programs, etc. In the age of the internet and mass media, marketing is no longer as straightforward as it once was. Eyeballs are more dispersed, inattentive, and impatient as ever, and it can be extremely difficult to know where to run a promotion or to what demographic a marketing campaign will be best marketed to.

The perplexing nature of the marketing beast is evidenced by the fact that while 72% of consumers who did a local search visited a local store within the day, only 22% of businesses are satisfied with their conversion rates. In other words, we know that marketing works in general, but it can be difficult to achieve effective campaigns ourselves. And not everyone has adapted. 93% of B2B marketers rely upon email — the most popular method — while only 26% use Instagram to appeal to the younger demos.

The blockchain is seen by many as a means to flip marketing on its head by providing better metrics for a wider audience, reducing the influence of data and audience-hoarding intermediaries, and transforming potentially effective yet underutilized marketing strategies such as loyalty programs through innovative face-lifting approaches. These programs are critical to consumers’ shopping decisions, and revamping them through the blockchain’s interoperability is just one way marketing can get a lift from the promising technology.

Blockchain in Marketing - Practical use cases


Consolidating Gift Card Merchants on One App/Card

Blockchain use cases in marketing - Consolidating Gift Card Merchants

Gift cards are a great marketing tool for businesses, as over 59% of surveyed consumers tend to spend more than the gift card’s value once they get to shopping. Gift cards remain the most coveted holiday gift for eleven years running, with 61% of those surveyed requesting a little plastic store credit over the next most popular item, clothing and accessories. While gift cards are themselves a broad category, virtually everybody — a reported 91% of consumers — has purchased a gift card, either for themselves or somebody else.

One trend in the industry is the rise of open-loop gift cards, such as prepaid Visa gift cards. In 2014, the amount of purchases made with these open-loop cards topped $200 billion, or 5% of all retail spending in the United States. This is a telling statistic, especially considering that 29% of those surveyed said that they have received a gift card that they simply never used. The ability for greater choice in how and where gift cards can be used is becoming a norm, and restaurants and retailers would be wise to consider how they can alter their gift card programs to remain competitive with credit card merchants offering prepaid gift cards that can be used at virtually any consumer venue.

Gift cards are often applicable across the members of a parent company, such as Olive Garden and Outback Steakhouse. Taking this idea a step further, a system by which a greater number of businesses consolidate their offerings, allowing a customer to amass the sum of their gift card dollars on a single debit-like gift card, could result in greater earnings for all companies who join such a conglomerate. The blockchain could serve as a secure locker for these gift cards, utilizing unparalleled authentication methods to tie a single user to their gift card sum, creating a more versatile, seamless means to take advantage of their credits.  

Companies Trying to Solve This Problem

  • Tokky  Blockchain powered gift card platform.
  • Gyft Block – Popular gift card company Gyft is securing digital gift cards on the blockchain. 

Tokenizing Loyalty Rewards Programs

Blockchain use cases in marketing - Tokenizing Loyalty Rewards Programs

Loyalty programs are one of the most obvious differentiators that can compel a consumer to choose one place of business over another with similar quality of product and customer experience. In fact, one survey found that 69% of consumers allowed considerations regarding the value of loyalty programs to influence their shopping decisions. As of 2017, 3.8 billion Americans possessed membership in at least one customer loyalty program, a clear indication that saving money and being rewarded for repeat business is popular across demographic and class lines. Participation in customer loyalty programs grew by 15% between 2015 and 2017, though that rate has been as high as 26% in the recent past.

But still, even with these obvious signs that consumers are all-in on loyalty programs, too many businesses fail to fully flesh out their programs or take full advantage of a customer base eager for savings any way they can get them. At least half of loyalty programs suffer from low engagement. In 2015, consumers in the United States participated in only 50% of the loyalty programs that they belonged to. For some, the blockchain may serve as a means to incentivize engagement by providing more immediate rewards, and in doing so, putting forth an almost irresistible call to action.

This concept has to do with the idea of making rewards programs unified on the blockchain so that customers could redeem their points in a more immediate manner or even trade the points to other members on the chain marketplace if they so please. Further, such a blockchain-based system could employ smart contracts to automatically dole out rewards. For example, if Jane just flew her 5,000th mile and is due an upgrade to first class, a smart contract that registers her qualification for an upgrade could update the computer system in real time. Instead of potentially having to wait on her next trip to redeem her reward, Jane would be theoretically able to receive her free drinks and extra-wide seat in the front of the plane on her connecting flight. This is just one of the visions blockchain proponents have for the many forms of rewards programs that could receive a facelift from the promising technology. 

Companies Trying to Solve This Problem

  • Loyyal – Tokenized loyalty platform to increase liquidity and usefulness of customer rewards.
  • Sandblock’s Satisfaction Token  Platform for companies to create branded tokens for loyalty.  

Greater Anonymity and Control in Marketing Data Collection

Blockchain use cases in marketing - Anonymity in Marketing Data Collection

There is no shortage of headlines lambasting the plethora of marketers basking in our endless swathes of internet-derived personal data. From browsing tendencies to Amazon purchases to Facebook likes and dislikes to the articles we view, our internet personalities are essentially a glass house exposing our many interests and beliefs. While this is a treasure chest for marketers and retailers, it’s created quite a bit of controversy, especially for those naive enough to believe that a free platform is free because of its creators’ benevolence. Recent controversies have made it clearer than ever that if a product is “free,” then you (and your data) are the product.

Marketers are now using everything from license plate pictures to eye-tracking heatmaps to delve further into our lives, and while we all are aware of the hot water Facebook got itself into by being less than open about how it collects data, they are far from the only player engaging in questionable data collection practices. Chinese phone manufacturer OnePlus is (not surprisingly) collecting tons of your data, too. At this point, the more appropriate question is, who isn’t looking to monitor your every internet move to gain a competitive edge?

This rhetorical question has led blockchain practitioners to begin establishing systems that, at the very least, anonymize user data. While the data collected from users can be collected, the anonymity that the blockchain affords could ensure that the data itself is not tied to any specific person. Other ventures are seeking to establish networks that prevent a user’s data from being collected without their permission, as well as a peer-to-peer alternative to the internet in which user data is encrypted and secured. 

Companies Trying to Solve This Problem

  • Killi – Restoring control to users over their marketing data.
  • Hu-manity.co  Creating title ownership of personal data.  

Verifying Engagement

Blockchain use cases in marketing - Verifying Engagement

The internet has become plagued with bots posing as humans, muddying up engagement statistics and costing publications and retailers valuable advertising dollars. In fact, advertising fraud is nothing new. All the way back in the dark ages of 2013, Adweek published an article claiming that digital advertising fraudsters were siphoning $6 billion each year from brands seeking out customers through online campaigns. The article claimed that 20–90% of all clicks on online advertisements were executed by bots, not actual humans who might be inclined to visit an emergent news site or purchase the luxury patio furniture being advertised.

Since 2013, tools for detecting bots have gotten more sophisticated; unfortunately, so have the bots. In 2017, one executive representing JPMorgan Chase told the audience at the Masters of Marketing Conference that she anticipated $16.4 billion to be lost because of ad fraud in 2017, up significantly from $7.2 billion the previous year. The internet has proven unable to keep up with the pests that are bots, and metrics continue to misrepresent the realities of clicks and engagement.

The blockchain has a greater capability to weed out bots, ensuring that interactions with advertisements are conducted by humans with verified pulses. This opens the door for a new paradigm in digital advertising, creating the potential for engagement to be truly verified, whether in regard to social media followers, advertising campaigns, contests, or otherwise. 

Companies Trying to Solve This Problem

  • SocialMedia.Market  Decentralized influencer ad network for more transparent engagement metrics.  

Rewarding Consumers for Sharing Personal Data

Blockchain use cases in marketing - Users Monetize Personal Data

There’s virtually no limit to the gratuitous nature of documented internet privacy violations. In 2010, the Lower Merion School District in Pennsylvania was ordered to pay a $610,000 settlement after it was found to have captured 56,000 photos and screen captures from security software it had installed on computers taken home by students. These photographs included students in various states of undress. In 2010, a Wall Street Journal investigation discovered that several of Facebook’s most popular applications shared users’ names, and sometimes their friends’ names, with advertisers. Even beloved Disney — the borderline-mythical company that has given us the likes of Mickey Mouse and Sleeping Beauty — was sued after it was alleged that it had spied on children through 42 of its gaming apps. Its subsidiary Playdom was forced to pay a $3 million civil penalty, and all allusions of Disney as a benevolent purveyor of our childhood fantasies were immediately squashed. The primary element of concern in all of these instances is the fundamental lack of choice for users to share or not share their data.

The protections over a consumer’s own data and privacy that blockchain technology can afford could also provide the option of choice. This includes the choice to share usable data with advertisers and businesses in exchange for discounts or other financial rewards. Currently, this data is simply extracted by websites with the user gaining nothing in return. The ability for a user to voluntarily part with their data could provide the advertiser with greater insight and the consumer with extra savings and/or cash in their pocket. 

Companies Trying to Solve This Problem

  • Killi Creating compensation incentives for data sharing.  

Preventing Product Fraud Through Brand Verification

Blockchain use cases in marketing - Preventing Product Fraud

Consumers have become more in tune with how their products are made, placing greater emphasis on ethical practices, whether their concerns pertain to the environment, the conditions of a factory, or both. Regardless of consumers’ demands, companies are too resigned to relying on brand loyalty or misrepresenting their practices instead of making the real changes that customers want to see. While Nike has taken on a social justice bent with its latest advertising campaign, it continues to come under fire from protestors who allege its foreign workers suffer from wage theft, verbal abuse, and inhumane working conditions. Before deciding to increase its company-wide minimum wage to $15 an hour, Amazon was a frequent target for critics who claimed that its warehouse staff were overworked and left to suffer without reprieve when injuries on the job befell them.

But working conditions aren’t the only gripe consumers have. When it comes to their food, consumers want to know that it was grown or raised ethically and in an organic fashion. Too often, claims about organic methods are unfounded and misleading.

Blockchain is being used to track the provenance of a product, providing customers a verifiable guarantee that a product is legitimate, as well as made how and by whom it is claimed to. This type of information could become an integral selling point in advertising campaigns, with the authenticity and ethicality of products becoming a compelling feather in the hat of brands who take advantage of the technology.

Companies Trying to Solve This Problem

  • Project Provenance  Helping brands validate the source of products and tell the story of the product journey.  

Validating Email Delivery/Engagement for Marketing Purposes

Blockchain use cases in marketing - Validating Email Delivery

While new forms of communication, such as text messaging and social media, have emerged since the creation of the internet, email remains an integral part of staying in touch, especially for professionals. In 2017, 3.7 billion internet users relied upon email as a form of communication, and that figure is set to swell to 4.3 billion by 2022. By the close of 2019, it’s expected that an average of 246 billion emails will be sent every day.

This tremendous mass of digital communications makes it inevitable that countless emails get lost in the weeds with spam boxes and lack of oversight accounting for the immeasurable number of transmissions that go unread. For marketers, this is a problem. While 89% of marketers reported that email was their primary means of lead generation, metrics for accurately gauging consumer interaction with email marketing campaigns remain lacking.

With email campaigns remaining an integral part of the advertising landscape, better metrics for how effective these campaigns are or are not would be very useful. The blockchain, with its ability to collect metadata and track engagement, could provide the framework for the collection of these metrics, which in turn would mean greater insight into how campaigns can be tweaked to better connect with the target audience.

Companies Trying to Solve This Problem

  • John McAfee’s SwiftMail – Early mover blockchain powered email platform from crypto leader John McAfee, SwiftMail confirms email delivery on the blockchain.
  • Snov  Cold outreach platform built on the blockchain. 
About Sam Mire

Data journalist and market research analyst focused on emerging technology, trends, and ideas.

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