The digital age has slowly yet persistently changed the entire marketing game over the past two decades. Where brands used to determine how and where customers came to them and what products they could buy, e-commerce and the evolving technology behind it has placed more and more control of the interactions and relationships in the hands of the customer. That means brands have to adapt or fade away, and one of the main concerns for both brands and customers is security.

Data breaches are happening more often, and they’re getting bigger, with larger numbers of customer records falling into potentially dangerous hands. Hackers continue to find ways into databases, and the brands who manage these records show little confidence in their ability to protect their single most valuable asset: first-party data, as shown in the following survey results:

This is a terrible set of circumstances for marketers. As if building trust with potential customers wasn’t hard enough already, now you’ve got to do it in the face of serious data security issues.

Wouldn’t it be reassuring if there was a way to address this issue once and for all? A way to make data significantly more secure so that customer confidence never becomes a deciding factor in whether they interact with your brand, let alone buy something from you?

There is a way. Blockchain encryption.

If you’ve heard of it, it was probably in relation to cryptocurrencies, like Bitcoin and Ethereum. However, don’t confuse Bitcoin with blockchain. Bitcoin is only an application of the big idea behind blockchain, which is the most secure way yet to encrypt sensitive information.

With its General Data Protection Regulation (GDPR), Europe is way ahead of the rest of the world by making it a law that customers are the ones who have control of their own data, but if you think blockchain is something you’ll only see on a wide scale in the distant future, think again. A recent study from Market Reports Center found that the global blockchain market was worth $708 million in 2017 and is expected to rise to $60.7 billion by 2024. The tech itself has been around for a decade already, and after a slow start with a detour into cryptocurrency trading, blockchain is on the verge of upending markets and industries around the globe.

Let’s take a look at how blockchain technology will impact marketing and the way you’ll connect with your customers.

We Don’t Need Cookies Anymore to Know Who You Are

Cookies have been around for over 20 years and are still the primary way brands can track traffic and behavior on their websites. While cookies are good for this kind of data collection, they do expire, making them a temporary tool. A bigger problem is that cookies only gather the data of a customer when she is on that brand’s website. This is just a small part of the customer’s bigger picture. To make the most effective decisions in engaging customers, the marketer needs more data from other touchpoints over a longer period of time. With cookies, that’s just not possible.

A 2017 Viant survey of U.S. digital marketing executives found that over 60% believe cookies will be gone in the next 2 years and over 85% think they’ll be extinct in 5 years.

Industries have already started to migrate away from cookies. In the summer of 2017, Apple made it more difficult to track users through their Safari browser by making third-party cookies expire after only 3 days. In Europe, the soon-to-be-enacted GDPR further constrains third-party cookies by making it law that a brand must have clear and explicit consent from the consumer to market to them.

The key to solving the cookie dilemma is establishing a reliable way of identifying customers wherever they may browse and shop. The most common identification method in use today is the email address.

Think of how many times you’ve bought a product, signed up for a newsletter, or responded to a discount offer and you were asked to provide your email address. As a digital ID, it’s the best thing we have at the moment to provide a unique piece of specific customer identification. There are, of course, limitations to this. For example, email addresses can be hacked and falsified, yet an email address is a good supporting piece of ID. We just need to couple it with something more secure. Something like blockchain encryption.

What’s So Great About Blockchain?

At its simplest, blockchain is a kind of ledger that will record and time-stamp every transaction and online interaction between one party and another (by the way, don’t be surprised if you hear blockchain sometimes referred to as a distributed ledger technology, or DLT.)


For example, a customer or a brand whom the customer gives permission to can add information to the customer’s blockchain. After getting logged in the ledger, the data cannot be deleted, but it can be accessed by users or brands who have the customer’s permission to do so.

The strength of blockchain’s security is in large part due to its decentralized data storage structure and is exactly why blockchain has played such a big role with cryptocurrencies. To hack into the data, one would have to hack into every place where the data is kept.

Blockchain’s decentralization not only makes it harder to crack an individual account, but it also makes it much harder to bring down an entire network. Centralized systems have obviously worked up to a point, but they do have one inherently weak design flaw: a centralized system is a single point of failure. When part of a one-site network goes down, the whole thing can fall.

Venture capitalist, entrepreneur, and co-creator of the Blockchain Summit, Bill Tai sums it up best here:

“The blockchain [is] a distributed ledger where the recording of all those transactions isn’t just happening in one place. It’s written in thousands and thousands and thousands of places. It can’t go down, and it’s always transparent. You can always look it up. So it’s hard to hack because to try to replace or erase and change the information, you’d essentially either have to take over every single one of those computers around the world, writing it down at the same time, or you’d have to double the whole network all at once, which [is] really kind of impossible at the scale it is today.”

Just to be clear, decentralization does not mean that the records are disconnected from each other. What makes blockchain revolutionary for the marketer is that every transaction recorded in the blockchain will be linked with the other transactions around it (all the transactions in this thread make up the “block”), and this will provide you with a more definitive view of the customer.

One would think that using blockchain for the buying and selling of a digital cryptocurrency around the world would be endorsement enough of blockchain’s most attractive feature: security. And considering that it’s now possible to get a Bitcoin IRA, that’s a pretty big green flag. But when you apply the technology to other industries and think about how blockchain could answer a business or customer need you have now, the possibilities start to stack up.

Not only will blockchain affect anything that generates a transaction, from trading on the stock exchange to entertainment and travel, but anything that would require a form of identification will also be impacted. That could include job recruitment, taxes, voting, real estate, and education. Some of this is already underway.

Here are just a few examples of companies who are currently investing in blockchain tech and in some cases offering Blockchain-as-a-Service (BaaS):

  • Microsoft is building a decentralized ID system on top of blockchain technology similar to Bitcoin, Ethereum, and Litecoin, and they’re supporting it through their Authenticator app. Microsoft is also offering blockchain storage for banks, healthcare, and ledger startups.
  • Online colossus Amazon, through a collaboration between Digital Currency Group (DCG) and their own Amazon Web Services, are providing their own BaaS to tech-based companies like financial organizations and insurance agencies.
  • Not to be excluded, IBM also has a BaaS platform designed to streamline operations for companies with a lot of e-commerce transactions.
  • Blockchain has immediate impact on supply chain management, and companies like Walmart and IBM have already applied the technology to their own inventory replenishment programs. This is particularly advantageous for grocery chains who can significantly reduce the amount of food that’s wasted (for more on how the leaders in AI can solve supply chain management challenges, check out “Using AI for Marketing: How Machines Optimize Decision-Making”).

While blockchain will probably change the way a range of industries operate, from banks and government agencies to utility companies and self-publishing rights, it will definitively change the way marketers interact with customers. And the brands who are first to take advantage of blockchain will have the most to gain over the next 5 years.

Blockchain + Marketers = What?

When the internet brought the people of Earth closer together regardless of geography, it had an equalizing effect (for the most part): Anyone (not just the rich) with access to a computer, an ISP, and electricity could benefit from the internet. The same thing is going to happen with data. Every individual on the planet will have rights concerning who uses their data, and the mechanism that will make this possible is blockchain encryption.

This coming democratization of data will not only give customers even more say about how their data is used, but it’s going to push marketers to come up with new ways to interact with customers that enhances the shopping experience in some way. Plus, you will still be able to gather more accurate data about each customer than you ever could with cookies.

Improved Cost and Operations Efficiency

Any CFO or COO will appreciate some of the ground-floor improvements blockchain has to offer. For instance, the speed with which transactions can be carried out digitally will greatly increase the number of transactions per second, from many thousands to many millions, and each of those transactions costs a brand something.

According to an Accenture report, adopting blockchain could cut infrastructure costs for investment banks by 30%. Perhaps more exciting is that blockchain removes the need for third parties to be involved in transactions, email, or other kinds of advertising. Blockchain gives brands a direct line to each customer, and budgets that used to be devoted to middlemen can now be applied to other areas.

Boosts for the Brand

Data privacy rights will force brands to treat customers with greater respect, and a huge part of this that blockchain will support is transparency. Brands will have to be explicit about getting permission to collect data and what will be done with all that data. This kind of transparency only breeds trust, and with data breaches being such a prevalent problem, brands need all the help they can get. Plus, blockchain can improve trust in other ways too. Case in point, blockchain would make it possible for a marketing brand to publish case studies in a way that makes all the data transparent and independently verifiable.

Innovations We Haven’t Thought of Yet

Any new technology brings with it a host of fears and doubts, but there is also great hope in blockchain, that, once it’s adopted, we will find incredible things to do with it. Just think back to 2007 when the first iPhone came out. Remember how it didn’t quite work well as a mobile phone all the time? Do you recall a time when there were no such things as mobile apps or location-based marketing? The same unforeseen innovation will happen with blockchain.

Smart Contracts

Already growing in use throughout the B2B environment, smart contracts use blockchain to vet and authenticate every contract, which is then linked to every transaction related to that contract. Brands can exchange cash, shares, or anything else of value in a fully transparent manner. Additionally, this opens the way for cross-promotional marketing between brands and would apply to channels like social media where influencers play such a big role.

Loyalty Programs

One highly probable blockchain application would be in a brand’s loyalty program where a retailer could create its very own branded currency for customers to use in claiming rewards. In fact, blockchain would make it possible for several retailers to use the same blockchain currency for each of their own loyalty programs, and the rewards from one brand could translate to others using the same currency, something called universal exchangeability in some corners of the world.

Imagine that you get points every time you buy a particular brand of coffee. You can cash these points in for more coffee, or you could put the points toward something distinctly not coffee, like a dishwashing machine, a widescreen TV, or a trip somewhere. This has been possible when staying within one brand or a family of brands, but imagine that you could exchange one retailer’s loyalty points for another’s. This is a definite value-add for the customer and would only incur greater participation and customer retention.

There is, of course, great cost associated with building a loyalty program on top of a burgeoning technology like blockchain, and other hurdles like adapting infrastructure and creating new consumer apps for simple blockchain use will have to be developed, but again, this is not a reason to resist data encryption tech. It’s a reason to get in now, build your systems, and start reaping the rewards in revenue and customer retention.

Incentives and Discounts

Related to loyalty program participation, many brands have ongoing challenges with figuring out how to get customers to respond to discounts as well as what the discount sweet spot should be. If the brand offers too little, customers won’t go through the trouble of trying to redeem a coupon through their app. Offer too much of a discount, and the brand takes a margins bath. And if no one’s responding to your incentives, your brand is not collecting any customer data.

Blockchain can also address this area. For instance, a company called GATCOIN plans to combine blockchain and mobile targeting to help retailers attract and keep new customers. Through an omnichannel platform, brands can issue “merchant tokens” to a giant audience of customers in a variety of flavors, from pre-paid cash tokens to discount, gift, and travel tokens.

Paying Users to View Ads

Since blockchain is so hard to corrupt and records accurate histories of online behavior, the technology is perfect for tracking all sorts of things, making it a prime candidate to solve one of the biggest gray areas in online advertising: How do you know that anyone is actually looking at your content?

Using blockchain, a brand could now actually pay customers to watch ads and thereby verify that the ad was delivered and viewed by a real person. This would include optimizing the frequency of ads to ensure that you’re not overdelivering them. Most likely customers would be paid in a blockchain currency that could be cashed in through a loyalty program.

Content Licensing

There are other customer-engagement applications, like securely paying customers for use of any of their content, such as photos or videos that include your brand. This is especially relevant to social influencers but could be extended to any copyrightable material used in a campaign to ensure that creators of video, images, or music have granted proper licensing rights to you and are compensated for their work.

Verification Services

In addition to identification confirmation services, a whole bunch of other types of verification services will pop up using blockchain to verify things like email deliverability or that social influencers are real people and not a bot armada.

The Big Boon for Marketers: True One-to-One Personalization

Because blockchain links all transactions and online behaviors for each customer, one of the biggest things marketers should be excited about is a more robust and rich unified profile for each and every customer. This is a goal that AI technology is already making possible, but blockchain takes direct-to-consumer digital marketing a step further with even greater accuracy in targeting and personalization, finally enabling marketers to deliver on the promise of marketing and achieve truly one-to-one interactions.

What Marketers Can Do Today

Exploring the technology now will grant those companies with being the first in the marketplace to really expand service and engagement in ways that we haven’t quite thought of yet, but over the next few years, these discoveries are going to be made. Even if you aren’t on the leading edge of tech adoption, your company can do things to be prepared and show that you’re looking ahead to the future.

Make sure you understand what your first-party data strategy is and that you can answer these questions:

  • Where do you interact with customers? Which channels?
  • How are you collecting data from your customers?
  • Where do you store that data?
  • How are you leveraging that data?

One of the central ideas behind gathering first-party data in the near future will be that brands must be very clear about their consent policies, and that might mean establishing a double-opt-in method to ensure that you have clear consent from individual customers to collect their data. You will also have to specifically state what you will do with the data, and depending on the scope of your business, you may need to appoint a data protection officer. For more on data protection regulations, check out “Addressing FAQs about the General Data Protection Regulation (GDPR).”

Final Thoughts

The demand from consumers to control their own data will grow in the next few years, and blockchain is an excellent option with its permission-based access and hard-to-crack security. But blockchain alone won’t be enough. It’s one part of a technological solution. Compatible systems and applications will have to be built to make it universally possible to use blockchain encryption, but consumers (particularly in the US) will also have to be educated and demand it.

The potential of blockchain encryption is no myth, nor is it merely hype, and when you marry technology with a consumer demand on a global scale, massive change can take place. In the next 5 years, blockchain encryption is going to rise up as a global security solution and as a way for individual customers to have control over their digital profiles. But even more than that, blockchain has the power to transform society in terms of brand transparency and the individual’s power and say-so over one’s own identity and all the data associated with that customer.

► For a greater discussion of the emerging trends we’ll see in the next 5 years, download “5X5: 5 Marketing Predictions for the Next 5 Years.”

New Call-to-action