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More customer trust with blockchain

Cybersecurity and data protection are coming into focus in the digital world. The blockchain supports digital marketing

February 11 2022Björn Radde

Building consumer trust with blockchain

Concerns relating to cyber security, data protection and transparency are becoming central, especially in marketing, as commerce increasingly moves to digital channels. Blockchain provides marketing organizations with new options that allow them to operate more autonomously in the advertising market, and to increase the authenticity of their product and corporate communications.

Gain highest customer trust

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The turbulent start to the 2020s, especially in the face of the coronavirus pandemic, is helping digital technologies – including blockchain – to gain ground. Most people know blockchain as the bedrock for cryptocurrencies such as bitcoin. Yet it is also used as a permanent database of auditable (trans)actions in a peer-to-peer network. In digital marketing, this means more trust, more transparency and more security. Essentially, the blockchain stores data on decentralized servers at several locations rather than in one centralized repository. These distributed data records (blocks) are inseparably linked into a chain. Every computer (peer) in the network receives the same copy of the unalterable data. This has the advantage of no more central repository that all market players have to trust – and therefore no central point of attack for cybercriminals or vulnerability to technical malfunctions. The principle is akin to an online document stored at a decentral location that can be simultaneously updated across several computers.

More trust in the digital world

According to a Bitkom survey, six out of ten German companies believe that blockchain technology will play an important role in the future competitive framework. Blockchain’s importance in the realm of digital marketing is also growing. It has ‘the potential to create more transparency, trust and efficiency in the digital advertising ecosystem’ according to a Blockchain study of publishing, agency, technology, and brand experts conducted by the German Advertisers Association (OWM) in 2019.

High costs, the failure of real-time apps to achieve commercial viability, and the lack of sector-wide initiatives are (still) preventing widespread adoption. Sooner or later that will change because blockchain technology makes marketing processes more transparent, improves consumer confidence and, as computing resources continue to grow, it will be able to handle even larger volumes of data in the future. The monopolies of large online platforms pose challenges to many market players. Data scandals have additionally fueled skepticism about the digital advertising scene, and insecurities among users and advertisers, who feel that control over their data is slipping out of their grasp. The blockchain can help to regain trust.

More online ad authenticity 

It’s almost impossible to tell whether website visitors are humans, or whether click bots are being used to drive up impressions. A 2019 study by Juniper Research forecasted that advertisers would lose more than EUR 37 billion of ad spend globally in 2019 to fraudulent online advertising activities. Although the blockchain cannot prevent all kinds of fraudulent activities, it can help to improve transparency. 

The adChain Registry is a blockchain-based protocol intended to prevent bots from manipulating advertising data. It replaces the ‘cost per thousand people reached’ performance metric by keeping a cryptographically secure record of publisher domain names that are accredited as non-fraudulent. Publisher domains that wish to be included in the adChain Registry pay a certain number of adTokens. If the domain doesn’t meet adChain Registry standards, it is not registered and the adTokens are not refunded. The idea is that advertisers pay registered publishers on adChain because their websites have been verified by people, not bots, and they can be sure of their quality. 

Customer rewards for data sharing

Another digital online marketing challenge is how to identify customers without third party cookies, according to two out of three experts surveyed for the Digital Dialog Insights 2019 study. One possible solution is GDPR-compliant identities in single sign-on processes and the blockchain is ideal for creating them. The advantage for advertisers is that instead of having to obtaining customer data from several sources, which was necessary in the past, the customers create their own profiles.

The lack of a secure blockchain infrastructure is a key hurdle to its success – in both the public and corporate spheres. This is the reason why T-Systems is investing in the German Blockchain Ecosystem (GBE). It is T-System’s blockchain-as-a-service platform offering a full set of features and capabilities to anyone who wants to execute a blockchain project or participate in a blockchain or consortium. 

Boosting brand transparency

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Sustainability is a defining element of every marketing agenda – and blockchain can serve sustainability-focused brands. An increasing number of enterprises are discovering the merits of blockchain technology in supply chain management. For example, it can be used to verify that products have been sustainably packaged or transported; two key criteria when your products are organic. In combination with specially protected Industrial Control Systems (ICS, e.g. T-Systems) it ensures business continuity and guarantees higher data transparency by writing all data into a blockchain that is synchronized for all participants. 

This process makes reality checks on brand value propositions possible. Business process data can be prepared to deliver product origin and tracking information to the consumer. Solutions such as the cloud2cloud integration of the Cloud of Things (T-Systems) and the SCP (SAP Cloud Platform) use IoT, blockchain and machine learning to monitor supply chains, such as the supply chain of the apples that are used to make a smoothie (Use Case, T-Systems). IoT data, supply data and origin data confirming that the organic apples really are organic are in one single block, allowing companies to market their products as sustainable with far more credibility.

T-Systems' consulting and implementation expertise

T-Systems is doing pioneering work with its blockchain-as-a-service, offering solutions to help its business customers gain a foothold in this area. So far, the lack of a secure foundation has held back the widespread adoption of blockchain technology - both in the public and corporate sectors. Deutsche Telekom AG's subsidiary is the first major telecommunications company to support blockchain networks, benefiting itself and enabling other less familiar companies to enter.

The subsidiary has its own Blockchain Solutions Center (BCSC) to explore blockchain technology and its potential applications in different industries. It has already landed big-name partners - blockchain networks - including providing infrastructure for Polkadot and Celo. It also operates validators and invests in various networks by acquiring tokens and earning returns from their validation. Soon, BCSC will even offer a white-label non-fungible token (NFT) platform where business customers can deploy NFTs to their end-users. From an idea to its implementation, T-Systems will accompany and advise business customers through professional workshops and years of expertise. The possibilities of blockchain technology are very diverse - many pilot projects already exist - and are being explored further and further by T-Systems.

The next important step would be an industry-wide exchange of experiences to further advance the  technology’s adaptation. In these digital times, marketers should also keep a close eye on how blockchain technology can simplify or even monetize certain processes and tools. This step is the only way they can remain competitive.

About the author
Björn Radde

Björn Radde

Vice President Digital Experience, T-Systems International GmbH

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