Understanding Blockchain – What Does It Mean for Native Advertising?

The Blockchain is enabling the evolution of the internet to the next level. But what is it? And what does it mean for native advertising?
blockchain

Rickard Lawson

By Rickard Lawson
Head of Publisher Relations at Strossle
Oslo, Norway
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As more and more of the web’s traffic, data and purchasing are centralizing around “the four” (Facebook, Google, Amazon, Apple) – business, governments and technologists are looking at the idea of a more decentralized web structure. How can technology even the playing field and support a more diversified and rich structure for companies to thrive in?

The true potential and meaning of decentralization are only beginning to surface. The European e-privacy laws coming into force, the changing control of our personal data, the way we choose to pay for the content we trust – these are no longer simply abstract concepts of a distant future, these are real and tangible technologies that are having an impact on the future of products and services.

This article will try to illustrate how technology built around the idea of a decentralized internet will impact advertising – welcome to the blockchain.

The blockchain is a decentralized network of many, many computers (or “nodes”) that is always running and cannot close down because of power failure or a server breakage in one location.

Oh god – what the hell is Blockchain?

The Blockchain is enabling the evolution of the internet to the next level, but let’s keep it simple for now… Here are 3 things you probably already knew – but when related to the blockchain it’ll help put the idea into context:

1. It’s decentralized.

Most digital information is stored in databases. Some are bigger than others, some have been made accessible by the web (i.e. «the Cloud») and some are connected to you by a wire from the machine in the basement of the building where you work. If you need to access this database it better be up-and-running, because if it’s down – the data there is not available.

RELATED: Why True Native Can and Needs to Be Scalable

The blockchain is a decentralized network of many, many computers (or “nodes”) that is always running and cannot close down because of power failure or a server breakage in one location. Whenever something is changed or added on the blockchain, this information is stored in a «block» and saved. Every block refers to the one before it to be valid. This way – it’s impossible to change information on a block after it’s been made. If something happened: it was recorded and stored on the chain – no doubt about it.

2. It’s encrypted.

Like your Credit card transactions, the stuff on the blockchain is encrypted and immutable. The encryption method varies between blockchains, but in general, it is super strong, so getting access to, or changing the data stored there would require that more than 50% of the computers in that blockchain was hacked and re-coded. Can’t be done!

3. It can be programmed.

Because we’re talking about computers here, we’re also talking about code. So if something is written in the code, the computer will do it – without discussion. Much like how you’d wish your kids work, (don’t worry – they never will. None of them do!)  So if you write «IF this happens, THEN this next thing should happen» in the code – it simply will, there’s no options or debating.

On the blockchain this is often called a «smart contract» and the parties know that the code cannot be changed or altered by one party. This way we don’t need a «middleman» to keep a copy of the contract, or to verify that something happened. In other words, no bank, realtor or auditor required. That saves time and money for the parties involved in the contract.

If you combine the factors: decentralized + encrypted +immutable you get a pretty powerful tool for creating a recorded version of the truth.

So what does this mean?

Consumers are growing increasingly critical to the impact of brands on the environment, and corporate citizenship in general.

We are all living in a world where world leaders and companies get away with blatant lies, disinformation or question the quality of the press that is there to report the facts.

As Content Marketing, or «Brand Publishing» is growing, The Truth with a capital «T» is something that is told consumers through the power of spending. The bigger the budget, the bigger the truth – and if an inconvenient truth is uncovered about a brand, company (or president), that story is smothered by another campaign or story with a bigger reach and budget or obfuscated by saying «fake news» over and over.

Well, this is where the blockchain comes into the equation.

If you combine the factors: decentralized + encrypted +immutable you get a pretty powerful tool for creating a recorded version of the truth. Something happened, it was recorded and it cannot be hacked or changed. We often say that the blockchain enables Transparency by design.

Now ask yourself, as a consumer – what brand would you trust? The one with the proven, transparent and documented supply chain as the one above, or the one with George Clooney smiling coyly at the camera in the adbreak?

Enter brands and services.

Let’s pretend I’m the CEO of Coffee Corp. My mission is to provide great coffee at a great price with a sustainable production ethics.

Here are some things I’d like to be associated with: Ethical production methods, carbon-neutral shipping, quality control and traceability.

You can probably see where I’m going with this, but let’s spell it out:

First, I make sure my farms are certified and that the workers there truly have ethical conditions. I make films, record standards and store certifications on the «Coffee Blockchain» I’ve created.

I make sure the carbon footprint of my shipping partner is offset by carbon neutral initiatives that are being recorded on the blockchain, I ensure the shipping containers I use have sensors reporting route, conditions and temperatures on regular intervals to my blockchain program and then I develop an app that lets consumers access the whole A-Z journey of my product from farm to retailer, enriched with coffee-making tips and expert insights.

RELATED: 6 Tips to Succeed in Native Advertising and Content Marketing

Furthermore I create a «Coffee Token» on the chain that means for every package sold, an instant kick-back is created to a named, local initiative in the origin country, empowering consumers to choose what they want to support, safe in the knowledge that every package sold actually equals a contribution – because it’s in the code!!

Not only is this entire story enabled by the blockchain technology, the automated recording of it is created on the same system. Now you could argue that you don’t need the blockchain to do this, and that would be fair. But: the blockchain is open source and immutable, I cannot create a fake truth and sell it off as the real thing. Furthermore, this system enables me to identify weak links in my manufacturing process and ensure all my partners are up to speed on compliance and quality.

And remember – this is a very basic example. Systems and tools like this is where it starts.

Now ask yourself, as a consumer – what brand would you trust? The one with the proven, transparent and documented supply chain as the one above, or the one with George Clooney smiling coyly at the camera in the adbreak?

RELATED: Can Native Advertising Save the Media Industry?

As multiple systems like in the case above become connected to each other (the shipping company in the example above buys automated, driverless trucks, the sensors in containers become «smart» and create changes in shipping routes based on weather and forecast delays to the recipient’s systems etc) the scalability of the platforms we use become an issue.

Autonomous systems are vulnerable if they are not connected, much like businesses are exposed if they are unable to collaborate up and downstream in their value chains. Open source technologies like Blockchain enable this collaboration and interconnectivity between systems and objects. It’s fair to say that the Internet Of Things LOVES blockchain and vice versa.

For tomorrow’s consumers, the story of how something is made, shipped, priced or dismantled will be one immersive tale.

So what does that this mean for Native Advertising?

As advertisers we must ask ourselves this:

Are we ready for ubiquitous transparency? Not just 1:1 communication with our customers through social media – but a full-fledged recorded and indisputable recording of our actions, our products, and our impact on our society. If the answer is «no» then consider the impact on your ability to compete when this becomes the default requirement of your audience.

What would be the immediate impact on your marketing budget if your company was exposed to 100% accessible scrutinization by your customers – and every aspect of your affairs was recorded history, available to everyone by simply pointing your phone’s camera at your product?

RELATED: “Everyone Seems Lost on How to Best Use Their Data”

Great Content Marketing is about creating something that is of value to the person consuming it. More often than not, marketeers fall into the trap of making their product the centre of their stories and forget about the role of the audience. When the audience demands transparency, and competition dictates that companies clean up their act – the stories told will gravitate towards the elements that have the biggest impact on the people we want to touch.

Focusing away from the consumer and inward will be counter-intuitive in a decentralized service, but looking at the greater good or individual’s benefits will be at the heart of how the service is perceived

For tomorrow’s consumers, the story of how something is made, shipped, priced or dismantled will be one immersive tale. This creates amazing opportunities for marketers willing to shift the focus away from simply WHAT they do, to WHY customers should care.

Documentation, practice, governance and quality will be the cornerstone of tomorrow’s storytelling and thereby also tomorrow’s native advertising. Showcasing WHY your brand cares about its consumers’ interests, and the willingness to be transparent about this paves the way for a deeper and more lasting relationship between brands and users. Blockchain technology enables these connections at a scale.

The Blockchain is enabling the next generation of web-based services – the implications of that are way too big for one article

Endnote:

If you read an article in 1996 outlining the amazing impact this new thing called the internet would have on your business, you probably would have shrugged it off. Don’t be that person in 2017.

I hope this article has tickled your curiosity about the potential yet to be unleashed through decentralization and the blockchain.

I hope it inspires you to go deeper and investigate this concept further. The Blockchain is enabling the next generation of web-based services – the implications of that are way too big for one article, enjoy the journey and thanks for reading!

 

DOWNLOAD: Native Advertising Trends 2017 – The News Media

 

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