Blockchain, Commerce, and the "Right Person"

Will marketers be able to overcome or accept consumer anonymity?

Posted by Michael Bordash on Tue Jan 19, 2016


The best marketing engagement technology platforms aim to solve the (now hackneyed) pattern: right content, right time, right location, right person.   While the market leaders have figured out incredible ways to determine real-time and historical attributes describing current and target audiences (location, demographics, time-series events leading to attrits), we've been sort of blocked by the matrix of proprietary devices and web apps on that last little part... the "right user". 

We, as marketing technologists, are reliant on a single source, or several independent single sources, to provide the nugget of information that defines and identifies "a user".  We can track behaviors via cookies on owned sites, that are then linked up to global cookie pools, which form the basis of an anonymous user persona, with which we can use to book ads against.  We also have our customers that authenticate with commerce system directly, as well as those customers that come in via social login.  The conversations tend to mostly fall into the area of pooling these identities and tying all of these mostly independent sources of said identity together for the purposes of more precise ad/message targeting.

You see, we technologists are in charge of creating these relationships on behalf of users, so that we can orchestrate the precise moment to strike with an offer. Many consumers don't care or don't understand how this all happens, nor could they really evaluate the level of secure design principles inculcated in the brands they so blindingly trust.   As for me? I'm tired of getting pwned by incompetent brands that don't realize how damaging a lack of security-oriented design can be in the long term.  I'm pretty close to jumping over the chasm by looking for brands that accept bitcoin first (hello overstock).  Retailers will need technical solutions to solve for this quickly. Paper dragons like enhanced usage policies and end-user trust auditors are not equipped to evolve user and transactional security in an impactful way. 

For those security-conscious consumers, things have already changed big time.

The introduction of blockchain technology into the commerce/marketing industry will scare many and inspire few.  It has the potential for being one of the most extreme game changing inventions that will turn commercial transactions on its ear and reverse the polarity of control of sensitive personal information from the marketer to the consumer. Blockchain, most famously known as the core transaction ledger for Bitcoin and other digital currencies, has massively important applications for traditional commerce and marketing activities.  Whereas traditional commerce/marketing systems are required by design to control every aspect of a transaction (whether purchasing something or tracking user initiated events like geo-fence breaches or logins), blockchain breaks that model allowing for multiple independent systems to each record and verify the action and vote on whether the event actually happened as observed (aka decentralized consensus). DBAs, sounds like zookeeper, right?  If voting was successful, the transaction is persisted and locked in place forever. In the case of Bitcoin, having a distributed "golden" database of all transactions that ever occurred was critical to it's use and success. Without it, trust AND scale would have been hard to obtain. 

(paraphrased from Bitcoin wiki) Blockchain is the underlying protocol technology powering bitcoin's distributed anonymous transactions. Without a central transaction gateway required by traditional currency, bitcoin needed to solve the problem of maintaining a golden ledger of all anonymous transfers of the currency. Blockchain solves this as a distributed database with voting node members. Each node can have either the entire historical ledger or part thereof.  Why is it called "blockchain"?  Every block contains a hash of the previous block. This has the effect of creating a chain of blocks from the genesis block to the current block. Each block is guaranteed to come after the previous block chronologically because the previous block's hash would otherwise not be known. Each block is also computationally impractical to modify once it has been in the chain for a while because every block after it would also have to be regenerated. These properties are what make double-spending of bitcoins very difficult. The block chain is the main innovation of Bitcoin.

So, what's it mean for martech people?  Well, we're at the early stage in practical applications outside of bitcoin, but let's take a stab at some ideas.  Here are a few thoughts for starters, and would be really happy to hear from others as I too am still new to use cases:

  • Payment system integration with bitcoin exchanges
  • Blockchain address integration with existing ID pools (through user opt-in only)
  • Blockchain address as replacement for email communication
  • Adopting core blockchain concepts to create decentralized user-event stream analysis for real-time engagement & personalization

Perhaps the first two bullets are all linked up to create an extended "alt chain" that allows the end user to include other information about themselves within the chain. This may be especially useful for a commerce brand that would like to engage in anonymous transaction, but would like to offer incentives that could only be certified if additional meta-data is included in the transaction, like an email address.  There is a nuance here that may need to be rectified over time as non-transaction data, like this aforementioned meta data, is kept out of the main chain. However, since user controlled anonymity is the primary concern, the user will need to have complete and unabashed control over what actually gets into their block. If the incentive is compelling enough, then the user will elect to give up some info.

It's pretty clear to me that the "right person" will get murkier and murkier as this transaction scheme gains momentum in the main stream. I'm still pretty new to the material and my assumptions above may be wrong, so I'm looking to be corrected. My intention here is to link up with other conversations in my linkedin professional network to refine a cohesive PoV. Let's hear what you have!

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