Blockchain Isn’t Just a Buzzword Anymore. How Advertisers Are Testing Its Applications

Dunkin', American Express, Anheuser-Busch InBev among companies adopting the tech

Beyond building an engaged and loyal fan base, Dunkin' hopes blockchain can improve its media spend.
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Perhaps Dunkin’ should change its tagline to Running on Blockchain. Early next year, the company, using blockchain technology from a startup called iPowow, will let TV viewers who have watched a commercial enter a code online to get discounts and prizes. Beyond building an engaged and loyal fan base, Dunkin’ hopes blockchain can improve its media spend, as the tech can give marketers a more concrete way of tracking who sees an ad based on who redeems tokens.

Dunkin’ isn’t the only brand dipping its toes in blockchain technology. American Express, Anheuser-Busch InBev and even a Brooklyn coffee company—with the help of IBM—have dabbled in blockchain. Agencies and television networks like Horizon and Fox have signed nonbinding letters of intent with iPowow (although some companies touted by iPowow have no plans to test in the immediate future) to determine its applications. And CMOs across a variety of industries are joining councils and consortiums designed to explore and set standards for blockchain.

While the use of blockchain technology across almost every industry is still new, the increased frequency of tests are being seen as a way for startups to tout their technology, propping it up long enough for the more hesitant players to sign on. (At a blockchain dinner a few months ago, one startup founder said he worried it might be seen as “vaporware” without enough buy-in.) The hope is to explore blockchain technology for a variety of uses ranging from advertising transparency to logistics to membership benefits. In the past two weeks, for example, the French grocery chain Carrefour announced plans to track food shipments using IBM’s blockchain, and Forbes became the first major publisher to test writing stories to a blockchain.

Alongside the pilot programs, other blockchain companies have been creating organizations that aim to foster the burgeoning space through dialogue and education, attracting key brands and their marketers as a means of gaining traction. Kiip, a mobile marketing platform, has created an Executive Blockchain Council—a group of brands and agencies interested in exploring the technology alongside the companies creating it. The council, which plans to meet twice a year, already has several big names on board, including the CMO of Kraft Heinz and head of media for L’Oréal.

Following a playbook

Educating an industry is part of the challenge facing both companies selling the tech and those interested in using it. However, players who stand to benefit from confusion find it’s easy to misdirect. All they need to do is follow the playbook of previous industry-changing technologies: social platforms and programmatic buying. Obfuscation, it seems, is a cottage industry.

“Even in the early days of mobile you were forced to do free tests—people were unable to understand what you’re serving and what you should pay attention to,” said Kiip CEO Brian Wong. “And over time when you have enough use cases, then you’re going to have a sense of trust.”

While brands are increasingly eager to test, the ad industry’s feelings are more mixed. According to a May survey by Advertiser Perceptions and Kochava, just one in seven said they thought blockchain technology was “very likely” to solve their efficiency and transparency problems, while 40 percent said it was “not very likely” or “not at all likely.” Meanwhile, 41 percent said they do plan to implement some sort of blockchain technology in the next two years.

Campbell Harvey, a professor of finance at Duke University, believes the use of blockchain technology in the marketing industry has been under-hyped over the past few years—partially because of confusion around whether it’s related to the volatile cryptocurrency markets. Even if activity is slow to start, he recommended companies create a strategy now, and even designate someone to be the “blockchain czar” to lead training within an organization.

“The wait and see [approach] is a dangerous strategy,” Harvey said. “You wait and see and you’re gone.”

Brands teaching the market

American Express jumped on blockchain, creating a lab to explore how it can use a blockchain framework called Hyperledger Fabric to let third parties use their own data and marketing channels to reward AmEx cardholders.

By setting up a private blockchain, AmEx and its third-party vendors can both see data securely and also more easily reconcile data after running a campaign. The five or six brands running pilots are also able to offer more than 100 products that give members additional rewards points when they buy them. For example, one partner, Exxon Mobil, gives customers three times the membership points when they buy premium fuel.

“I feel like we’re just scratching the surface on what we can do,” said Chris Cracchiolo, AmEx’s vp of global membership rewards. “As we launch these pilots, we’re thinking about the next 10 things we can obviously use blockchain for.”

Jason Kelley, IBM’s gm of blockchain services, said the company has been training its workforce to explain the technology in a “clear, concise way.” Kelley said 73,000 IBM employees have now participated in some sort of internal education program to help with the 500 clients that are now testing or considering testing blockchain for their businesses.

IBM is no stranger to the challenge of educating a market on new technology. The company has been betting heavily on blockchain over the past couple of years, but it wasn’t too long ago that the firm was creating high-profile marketing campaigns for artificial intelligence. And while its blockchain marketing hasn’t been as ambitious as years of campaigns for Watson, this summer IBM partnered with Brooklyn Roasting on a test to track coffee beans from where they’re grown to where they’re served. Walmart has also recently begun using IBM’s technology to test tracking the origins of leafy greens.

“I don’t carry around a bucket of blockchain,” Kelley said. “You can’t spread it around on anything.”

This summer, AB InBev ran a six-figure test campaign on a blockchain with Kiip that recorded data for beer ads, including impressions, engagement, time spent and price. Lucas Herscovici, AB InBev’s global marketing vp of consumer connections, insights and innovation, said he expects more advertisers will spend millions over the next few years. However, growth of the space still depends on who actually spends on it.

“It will depend how fast advertisers will drive this and also how fast other players in the industry will adopt this,” he said.

That need to drive adoption is part of what’s prompting blockchain companies to take it upon themselves to educate their would-be clients. And that requires marketing of their own. As a result, Ogilvy Consulting has begun working with blockchain companies to develop brands and messaging, including separating the technology from the cryptocurrencies.

“One of the things that’s important is simply presenting the humanity of it and show the way it solves problems for the world,” said Laura Masse, global consulting partner for Ogilvy Consulting.

But will all this education and testing work? For example, despite IBM’s years of marketing, Watson has by some measures failed to reach its potential in terms of revenue or solutions for clients.

Other groups and coalitions are forming as well to create standards, ideas and dialogue over what the future of blockchain could or should be for the marketing industry. The Interactive Advertising Bureau (IAB) is periodically putting out guidances from its blockchain working groups to guide conversation before the current power structure of the ad-tech landscape is threatened. Meanwhile, IBM, IPG, Meredith and Omnicom have all joined the board of a blockchain consortium called AdLedger in hopes of setting standards for the space.

Meredith CMO Alysia Borsa said the publishing powerhouse hasn’t begun testing yet, but it’s in talks with various companies about how it might test in 2019. However, she borrowed a phrase from a peer at another company that saw the potential without a growth spurt that everyone’s hoping for.

“If you think about crawl, walk, run, we’re having a baby,” Borsa said.

This story first appeared in the October 15, 2018, issue of Adweek magazine. Click here to subscribe.

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