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How marketers will use blockchain technology and NFTs in 2022 for identity, branding and engagement
Blockchain technology and NFTs aren’t going anywhere, and some big brands have already dipped their toes in and demonstrated that they can generate real engagement.Marketers are always in search of new strategies and technologies to gain a competitive advantage, so it’s not surprising that in outlooks for the upcoming year, there’s been a lot of talk about how NFTs and blockchain technology can give brands a lift. The digital landscape has expanded to include 3D AR and VR environments. Meanwhile, Meta (the company formerly known as Facebook) has gotten out front with the concept of a connected metaverse.When weighing all of the options that appear on the horizon, marketers should set clear goals and expectations instead of chasing the next flashy gimmick. But they also shouldn’t miss out on the transition to blockchain and virtual environments going on right now in some marketing channels.Blockchain’s benefits for identity“The industry has known for a while that blockchain’s transparent, decentralized nature, and immutability have valuable applications in preventing ad fraud and securing the ad supply chain,” said Mel Bessaha, Senior Vice President of Demand for video platform Connatix. “Those same benefits also deliver great value for brands that are dedicated to building strong first-party data strategies. Those strategies will naturally require as much first-party data as possible.”Because the location of all data in a blockchain is recorded in a decentralized, public ledger, this makes the blockchain much more transparent to consumers when it comes to their data’s provenance. Companies using blockchain technology for data also have a number of security options in handling and storing the data, either on or off the chain.The advantage concerning transparency of customer data is that the data isn’t being managed privately out of view on a company’s database, or shared with a third party without a customer’s permission. This way, there’s no disconnect between how a business uses customer data and how a customer expects it to be used, regardless of how customers interpret a particular data-sharing agreement when they check the box to grant permission. Sharing their data by way of blockchain is a way for brands to build trust with customers who fear that their customer data is being exploited in other transactions and lengthy permission agreements.“Consumers want to be able to opt out of data sharing, and they want transparency into what data is being collected,” said Bessaha. “Brands that can offer that transparency – which blockchain offers – will win consumers’ trust, and incentivize them to continue engaging with the brand and sharing data. Businesses in digital need to prove consumers are getting a fair trade when they share their information, and blockchain provides that proof.”If companies gain more trust with consumers by using blockchain technology, this sweetens the deal for acquiring more first-party data, which every brand needs now more than ever.NFTs in the metaverseNon-fungible tokens are digital objects that use blockchain technology to make sure that they are unique. Anybody who acquires an NFT can prove their ownership because the transaction is recorded in the decentralized, public ledger.This is important, because the visual representation of the NFT on a computer screen can easily be copied with a screenshot. It’s the blockchain itself that designates who owns this rare digital gem.For brands, NFTs can generate brand value and brand love in a number of ways, but as a virtual souvenir it makes the digital object more personally significant to the customer. It’s not a Burger King crown that any BK fan can pick up at a store. Instead, it’s a unique object that a customer jumped through specific hoops to acquire, and they can prove it on the blockchain.There is already an environment where consumers can show off their NFTs, provided by blockchain vendors who mint NFTs and provide digital wallets and trophy cases where users can keep them. But when operating in a virtual environment, those NFTs can follow a user wherever they go. This makes NFTs essential to VR experience, and a reason why they would grow in importance as a VR metaverse takes shape.NFT responsibilityOne thing marketers should pay attention to is the bad rep certain blockchain technologies get for using up lots of energy. To update the ledger for each unique token or coin, computers in a decentralized network are put to work generating a new chain. Many blockchain venders have gotten out ahead of this concern by pledging their sustainability practices.When marketers introduce an NFT promotion or other blockchain strategy, they will want to let consumers know that the technology they are using is environmentally responsible.“Consumers will be thinking through the impact of carbon emissions released by the creation of NFTs and other digital tokens,” said Libby Morgan, Senior Vice President, Chief Strategy Officer for the digital media and marketing trade association IAB.Marketers in the metaverse“Marketers are going to begin exploring branding opportunities in the metaverse,” said Stephen Hoelper, President, North America, at programmatic messaging company Doceree. “Brands that deliver an engaging and less invasive experience than the current digital marketing landscape will gain the greatest impact out of the gate in the new space.”“Brands are being put on notice: prepare for the metaverse,” said Sanjay Mehta, Head of Industry, e-commerce at cloud-based experience company Lucidworks. “This is a chance to reimagine virtual experiences and find better ways to do all the things we’ve been trying to do in the real world, including building community among customers, experiencing physical goods virtually, understanding shopper behavior, and creating more personal (AI-powered) concierge-style services.He added, “There are a million directions retailers could go, but those with clear intentions and a desire to enhance the total experience with the metaverse (versus building something from scratch just because) will be able to pull ahead.”With a lot of publicity generating the idea of the metaverse, it still remains largely conceptual, according to Jack Smith, Chief Product Officer for ad verification company DoubleVerify.“It’s early days for both the technology – hardware and software – and the content required to meet the ‘meta-opportunity,” Smith said. “Interoperability is also key. For the metaverse to function like the physical world, virtual environments must be interconnected. It can’t be a series of individual walled gardens. While the metaverse will take years to be realized, it’s not as far away as we might think given the rapid advancements in VR and AR amid the pandemic.”Brand theft in the metaverse?When taking their first dive into a virtual environment like the promised metaverse, marketers should understand that some of the strategies and logic on traditional channels might not carry over. That’s because laws protecting intellectual property are rooted in the real world, aka “meatspace.”“The most significant difference in IP and licensing issues between the metaverse and meatspace is clarity of ownership,” said Aron Solomon, Chief Legal Analyst for attorney lead gen company Esquire Digital. “If we look at a Nike sneaker in our tangible world, we know that a counterfeit pair of bred toe Jordan 1s from Sneaker Street in Hong Hong is inauthentic because we can accurately trace its provenance – the original licensed Nike shoe.”He cautioned, “Tracking ownership on the blockchain-based metaverse is going to be impossible by traditional legal measures because of uncertainty of ownership and the potential for (otherwise very cool) infinite alterations of the thing in issue, here, lets say, an NFT of a pair of bred toes.”As the metaverse becomes more connected with greater participation, a cat and mouse game might likely develop, possibly resembling ad fraud in the advertising landscape or other forms of deceptive digital scams.Marketers should be pay close attention to how they might release NFTs, selecting proven partners in this emerging space.As with any new digital channel, there is an excitement for discovery among consumers that marketers can also share. But eventually the buzz will need to lead to revenue.New on MarTech About The Author Chris Wood draws on over 15 years of reporting experience as a B2B editor and journalist. At DMN, he served as associate editor, offering original analysis on the evolving marketing tech landscape. He has interviewed leaders in tech and policy, from Canva CEO Melanie Perkins, to former Cisco CEO John Chambers, and Vivek Kundra, appointed by Barack Obama as the country’s first federal CIO. He is especially interested in how new technologies, including voice and blockchain, are disrupting the marketing world as we know it. In 2019, he moderated a panel on “innovation theater” at Fintech Inn, in Vilnius. In addition to his marketing-focused reporting in industry trades like Robotics Trends, Modern Brewery Age and AdNation News, Wood has also written for KIRKUS, and contributes fiction, criticism and poetry to several leading book blogs. He studied English at Fairfield University, and was born in Springfield, Massachusetts. He lives in New York.
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2022 Predictions: Data strategy and privacy
In the year ahead, successful marketers will be using data to initiate more communications while respecting consumers’ privacy. In many cases, one of the most important messages the brand will be communicating is how they are honoring a commitment to privacy.If a message is of real value to a consumer, however, it will be easy to tell based on the actions that follow from it. In 2022, the deep analytical dive will occur before those messages go out. These data insights will embolden the marketers who wield them, fueling a larger number of precise communications, many of them automated.Proactive approachIn the new year, it won’t be a question of whether to communicate manually with customers one at a time, or to put your marketing efforts on autopilot. Instead, automation will be a must, and it will be driven by data analytics and AI.“2022 will require brands to use AI and analytics to acquire insights and learn more about their customers before they even reach out,” said Andy Traba, Director of Product Marketing for cloud-based experience platform NICE CXone. Marketers will have to do their homework ahead of time (because, of course, if they don’t, their competitors will). They should be analyzing the data points that tell them what service or product their customer might be looking for and what the preferred channel is to reach out to them.“[This] will be the driving force for brands to better control the conversation – and have more meaningful interactions outright,” said Traba. “And, in order to build trust, appreciation and loyalty, brands must move away from ‘spamming’ and use more proactive communication to add value. This will mean using automated systems like smart, proactive AI-driven conversational chatbots to guide users through searches and early troubleshooting.”Team adjustmentsThis doesn’t mean that communications with customers will be completely automated. Instead, it will be more important than ever to have service reps and other brand personnel at the ready and skilled in using new CX software.“Businesses understand the value of a positive customer experience in order to maintain brand loyalty,” said Traba. “Brands will tap into AI and analytics to guide employees during interactions and recommend next-best actions, as well as to automate the more basic tasks so agents can focus on providing better, more empathetic experiences. Brands will invest more in training for front line employees, using AI and analytics to ensure they are well-prepared to resolve even the most complex queries.”Just as the pandemic became a global force fundamentally changing how customers interact digitally with brands, global forces are also affecting workers at all levels in the org.“With the pandemic upending labor market dynamics leading Americans to early retirements, career changes and what’s currently known as ‘The Great Resignation,’ brands must evolve in order to hold onto workers in the face of an acute labor shortage,” said Traba.Using data in real timeIn assembling a team of front line customer service professionals and sales staff, brands don’t have to be flying blind. Data on staff interactions with customers, online or in-store, is an important layer that helps deliver better CX and customer messaging. And it’ll be in real-time, according to George Shaw, CEO and Founder of Pathr.ai, an AI-powered platform that provides insights into human behavior in physical spaces.“Real-time human behavior analytics will help retailers achieve higher in-store sales through improved employee training,” Shaw said. “Real-time human behavior analytics in physical locations allows companies to address if staff is interacting effectively with customers. This could include anything from ensuring customers are being helped in a timely manner to making sure the proper number of cash registers are open and employees are focusing their efforts on high-margin items.”Prioritizing first-party dataGoogle’s announced deprecation of third-party cookies rocked the boat enough in 2021 that marketers were left scrambling for alternative data sources to keep their future campaigns afloat.“In 2022, the marketers who depend on third-party data, from cookies and other sources, will need to consider and prepare for the inevitable ‘death of the cookie,’” said Tracey Ryan O’Connor, Group Vice President at personalization technology company Qubit, which was recently acquired by AI-powered experience platform Coveo. “The retailers who prioritize first-party data sources from customer journey data, CRM platforms, POS systems, retail apps, affiliate marketing programs, etc. will be well-positioned. For the brands that use a mix of first-party and third-party data, they will face a myriad of challenges as they lose access to cookie data.”Marketers will also find that “renting” data in expensive advertising environments like Facebook is more costly than building your own first-party customer data resources, according to Michael Osborne, President of messaging and notification engine Wunderkind.“Take advantage of your brand’s own consumer data before turning to rented data (Google, FB Ads, etc), as this can be a more cost-effective and bespoke solution,” said Osborne. “Analyzing your own customers’ shopping habits and implementing it towards a greater purpose is the solution.”More loyaltyOne benefit of a more regulated exchange of data between consumers and marketers is that consumers feel like they will be in more control of their data. This, in turn, might lead to more confidence in sharing data with trusted brands. 2022 will be a pivotal year in this evolution.“Loyalty programs will be in the 2022 spotlight,” said Nikki Baird, Vice President of Retail Innovation at retail technology provider Aptos. “This new take on loyalty won’t be the pay-for-data schemes of old. A term that we’ll hear more and more is ‘zero-party data.’ This is the information that consumers intentionally share with a retailer.” She added, “Armed with this insight into shoppers’ preferences, purchase intentions, and context, optimally, a retailer can deliver a better and more personalized experience. But retailers need to be mindful – when a shopper freely gives you their information, they expect you to put it to good use and provide value in return. ‘Clean rooms’ and publisher dataRobust loyalty programs of the future will help marketers grow value from existing customers. To acquire new customers, the advertising ecosphere will have to be more data-driven than ever because of rising consumer expectations for relevant ads.So, in 2022 this balancing act between harder-to-come-by data and relevant ad experiences will become more challenging, and the full value of data collaborations will manifest.“As we face a cookie-less future, clean rooms will emerge as the answer to providing more advanced analysis around attribution and measurement,” said Libby Morgan, Senior Vice President, Chief Strategy Officer for IAB. “Clean rooms are where the walled gardens are able to share aggregated data with advertisers while still adhering to privacy laws and data restrictions. Whether used for transactional audience matching and segment building or for advancements in how data is shared, clean room solutions will continue to grow and mature as true cross-platform opportunities associated with the promise of ‘right ad at the right time’ continue to evolve.”“One of the most promising solutions for a cookie-less future lies in publisher first-party data, and in 2022 I believe we will see an increase in its value to buyers,” said Ashley Wheeler, Vice President, Seller Accounts for independent SSP Magnite. “While the true value in publisher first-party data as a replacement to the third-party cookie lies in its ability to scale to the open marketplace, in the near term, I think buyers will start to increase their reliance on publisher first-party data and publishers will lean into first-party data as a key point of differentiation to drive revenue from the open marketplace into private marketplaces.”“The future of data collaboration will rely on secure, data matching services that can allow agnostic collaboration and not require data to be moved,” said Kristen Williams, Magnite’s Senior Vice President, Strategy Partnerships. “There won’t be one solution that will provide the answers to all of the industry’s identity needs, so tools will need to be able to reach across service providers.”Proactive accountabilityThe confidence that successful marketers take into their new data-backed communications with customers in 2022 will give them an edge against competitors. Being proactive about consumer privacy and data transparency will also help establish a trusting relationship that can only add to the marketers’ swagger.“With all the news about protecting, and being transparent about consumer privacy, it only makes sense for consumers to want more clarity on how their data is being used,” said Shubham A. Mishra, CEO and Co-Founder of Pyxis One, a codeless AI infrastructure company. “More information on what consumers are saying ‘Yes’ to when they click on the ‘I Agree’ button of privacy policies is a huge potential story.”Just as marketers bring more data into the fold for consumer messaging and staff support, they should expand the conversation around privacy. The more they know about how the customer feels on these issues, the more trust and loyalty they can earn in the coming year.Read next: 2022 Predictions: Customer Experience & Digital ExperienceNew on MarTech About The Author Chris Wood draws on over 15 years of reporting experience as a B2B editor and journalist. At DMN, he served as associate editor, offering original analysis on the evolving marketing tech landscape. He has interviewed leaders in tech and policy, from Canva CEO Melanie Perkins, to former Cisco CEO John Chambers, and Vivek Kundra, appointed by Barack Obama as the country’s first federal CIO. He is especially interested in how new technologies, including voice and blockchain, are disrupting the marketing world as we know it. In 2019, he moderated a panel on “innovation theater” at Fintech Inn, in Vilnius. In addition to his marketing-focused reporting in industry trades like Robotics Trends, Modern Brewery Age and AdNation News, Wood has also written for KIRKUS, and contributes fiction, criticism and poetry to several leading book blogs. He studied English at Fairfield University, and was born in Springfield, Massachusetts. He lives in New York.
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What Brands Can Do When the Cookie Crumbles
People who aren’t familiar with how digital marketing and advertising work behind the scenes may not know it yet, but a big change is on the horizon as third-party cookies are phased out. The post What Brands Can Do When the Cookie Crumbles appeared first on Hawthorne Advertising | Brand Response TV + Digital + Media + Mobile + Social.
