Riding the blockchain

A mention of blockchain immediately brings two things to the mind - cryptocurrencies and transactions. But businesses are rapidly adopting the technology and using it in innovative ways. With this, marketing and brand managers are again staring at a metamorphosis. While it was infiltration of social media that unsettled them almost a decade ago, now it is blockchain that is keeping them on their toes. 

Brands have to embrace this new technology considered “disruptive’’ and “innovative” and that too at a quick pace, or else they face oblivion.

Blockchain, as defined by Gartner, is a distributed ledger in which value-exchange transactions are grouped into blocks, with each block getting chained to the previous one through assurance mechanisms.

Santhosh Palavesh, chief innovations officer at blockchain development company Belfrics, says, “Though the branding and the advertising industry has been a little naïve towards blockchain, there is a lot that blockchain can offer.”

The global blockchain market is expected to grow from $0.4 billion last year to $7.6 billion by 2022, as per a forecast by market research firm MarketsandMarkets. And it is high time that brands adopt blockchain to reap the rewards, say experts.

Trust and transparency is a crucial requisite in enhancing brand-customer relationship and loyalty. Blockchain effectively increases trust and transparency in multiple ways, feel experts. 

Chaitanya Hiremath, founder of Scanta, an augmented reality (AR) platform, says blockchain allows for transparent ways through which brands can connect with their target audience. “Authenticity is a key concern for both brands and consumers alike, especially in the world of online marketplaces. Blockchain allows companies to protect their brand and their intellectual property, as well as prove that what they are marketing is truthful.’’

Brands, especially luxury brands, have for long faced the onslaught of counterfeit products, which cost the global economy up to $250 billion a year. With blockchain, the entire lifecycle of a product can be effectively monitored, negating any scope for counterfeits to thrive. Moreover, blockchain can provide ample proof of whether or not a brand is indulging in ethical and sustainable practices as is being claimed during the production and delivery of goods. Experts say brands are aware that consumers today scout for ethically produced products. “Companies that are able to do this have an advantage over competitors who rely merely on marketing gimmicks without any evidence,” says Hiremath.

According to Parveez Nasyam, CEO and managing director, Xenium Digital, an experiential marketing agency, originality will thrive and as brands will be able to keep the outflow of the products in check, customers will be able to verify the legitimacy of a product. “If a brand sticks to its core values and releases genuine products, marketers will have a great time promoting them on innovative platforms.” 

Nasyam says another benefit that blockchain holds is that it eliminates the need for a centralised server that hackers can meddle with, and “this implies that there cannot be any targeted attacks towards a single user or a brand.”

Moreover, blockchain can also be used to organise the advertising/marketing industry, which is largely unorganised today, feel experts. “It can organise media houses, media buyers and sellers, advertisers, etc while standardising prices to a large extent,” says Palavesh.

Coming to supply chain, blockchain can help brands to shift from an inventory-based model to a demand-driven model, thus de-stressing the supply chain, minimising an overstocking of inventory and optimising costs.

Experts say almost 80% of global brands have, or are planning to invest in blockchain.

According to Hiremath, diamond behemoth De Beers uses blockchain to track gems and their supply chain to ensure they do not originate from conflict zones.

“Unilever is utilising blockchain in partnership with IBM for their media buying duties. Samsung has invested in blockchain to create a decentralised network for the internet of things,” says Nasyam.

APPLICATIONS GALORE

• With blockchain, the entire lifecycle of a product can be monitored, negating any scope for counterfeits to thrive
   
• Blockchain also provides ample proof of whether or not a brand is indulging in ethical and sustainable practices as is being claimed during the production and delivery

$7.6bn – Global blockchain market by 2022

80% – Of global brands have or are planning to invest in blockchain