The marketing research industry is no stranger to buzzwords. Big data. IoT. Artificial intelligence. While some are short-lived, others stick around long after the first big splash. So when I began bumping into mentions of “blockchain and MR” last year, I made a mental note to pay close attention.
While many people still only associate blockchain with cryptocurrency, it’s proving to have a much wider reach. Steven Johnson wrote in an article for the New York Times in January, “In a way, the Bitcoin bubble may ultimately turn out to be a distraction from the true significance of the blockchain.” Blockchain has the potential to disrupt a variety of industries, from banking and health care to hedge funds, academia, voting and, yes, marketing research.
I connected with Isaac Rogers, CEO, technology, 20|20 Research, to discuss what blockchain is, how it could impact the way consumers (and brands) interact with personal data and what influence it may have on the future of the sampling industry and marketing research in general – including qual. In the interest of full disclosure, 20|20 Research was awarded the U.S. Patent 9,990,418 for establishing a system and method for creating an opinion and behavioral data economy.
Blockchain is so new to the MR industry. Could you provide a simple overview of what blockchain is and how it works?
I probably have three people a day ask me, “So what is blockchain?” In most cases, they’re looking for a technical explanation of how it all works. I always encourage people to focus not on trying to understand the technology but on understanding what it enables. Here’s why: I bet 99 percent of people have little technical understanding of DNS, TCP/IP protocol and H.264 encoding protocols and how they work together to create a media content distribution system, but everyone knows what this is in their daily life – YouTube. It’s the technical way for me to say, “Go to www.youtube.com and watch a funny cat video.” Many people seem to want to understand blockchain at a technical level but it’s really no more helpful than trying to understand DNS and media encoding technology.
So when I explain blockchain, I stay away from the technical aspects. Blockchain is not a single technology but a package of technologies that have come together – kind of like the YouTube tech stuff above – that invert the way we think of data and information on the Internet.
In a nutshell, blockchain creates a repository of data that is distributed on thousands of participating computers around the world, data that is all in sync and all validated, meaning there is a giant audit trail of transactions. Think of it like a giant, trustworthy database distributed on so many computers around the world. Some blockchain enthusiasts will take issue with my choice of words like trust vs. trustless but I’m trying to avoid a semantic debate.
Usually, we think data lives somewhere on a server; my bank account balance is at my bank’s server, my viewing history is on a server somewhere at Netflix, etc. My bank and Netflix own that data and I have to trust them to keep it all accurate. In a way, my bank and Netflix have a lot of control over me and my data because it’s on their server in their format and they let me, their user, kind of peek at it when I need to access something. If I want to transfer money to another bank, I have to ask my bank to do this for me. If I want to share my browsing history with another company, I have to ask Netflix to handle this. I am a customer of these companies but at the end of the day, they really control the access to the information and what I do with it.
A blockchain network can be built in a lot of ways but in many cases it’s like a giant database or transaction log – that again is completely trustable and transparent. Blockchain networks can be built for all kinds of purposes to store information that people want to share. We’re hearing a lot about cryptocurrency – where you share your virtual currency information and record who you send your currency to/from to create a coin balance – but there are also lots of great applications underway in the world of international logistics to digital music streaming and health care. Every transaction on these systems is decentralized, auditable and extremely trustworthy. No one party, like a bank or an advertising platform, has any way to control or tamper with the transactions.
Could you build these kinds of systems with a proprietary, company-owned database, like a single bank or a software company? Not really. The risk of someone getting in and tampering with the results in the single database is great. You also run the risk that the company will one day raise their fees or change what they allow you to do with your data, meaning you can’t really rely on a proprietary database in the same way you can rely on a blockchain network to be a long-term, stable platform for data exchange.
How will blockchain change the way we conduct marketing research?
It will have huge impact but it will take a few years to become part of our daily lives. Let’s face it, we’re in an industry that relies on moving vast amounts of data to different places and we reward respondents for providing that information. We have a lot in common with other industries being disrupted by blockchain.
I think there are three areas where we’ll see great impact from this technology. First, and probably most obvious, we’ll see access to validated respondent profiles and past study history made available as a way to shorten surveys and weed out bad actors. Second, we’ll see the adoption of cryptocurrencies as a way to pay respondents for their insights. Lastly, we’ll see blockchain applications that allow us to link various respondent data sources together and exchange data from various platforms in a safe, secure way. As an example, this might mean linking my frequent flyer activity and hotel stays to answers that I provide in surveys.
Will blockchain affect qualitative research?
There will be some impact in qual but I think it’ll come later than the impact in quant. As we saw with digital platforms, quant got about a 10-year head start on digitizing its processes because of the scale and transactional nature of the business. Qualitative will benefit by being able to rely less on reported behavior, in a journal or diary study for example, and instead be able to safely share actual product usage through a blockchain-linked Internet of Things sensor in their kitchen or living room.
What impact could blockchain have on the sampling industry?
I believe the sample industry will be completely disintermediated by blockchain. There is a growing chorus of buyers and suppliers who express concern at the amount of fraud and abuse in the sample they purchase. This problem doesn’t seem to be getting better on its own. There is an enormous amount of waste and friction in the value chain between brands and the consumers they want to learn from. To get the participant perspective, late last year we interviewed hundreds of survey respondents and found wide amounts of dissatisfaction in the survey process, from low compensation for their time to abusively long questionnaires and bait-and-switch payout methods. Over half were looking for a new way to provide their insights directly to brands.
Add up all these forces and you are left with a sample industry that’s ripe for disruption.
Blockchain holds the promise to drastically reduce the number of players and steps between brands and respondents, just as it’s done with cryptocurrency by creating a shortcut between people wanting to exchange goods and services and in the process completely bypassing the banking system. It’ll take two to three years but I believe the access-panel model will become largely displaced by blockchain-enabled marketplaces where consumers, brands and researchers can connect and exchange insights and rewards freely.
Where is the biggest opportunity for marketing researchers to leverage blockchain technology?
To disrupt the sample industry, eliminate fraud and abuse in the survey ecosystem and increase incentives to respondents as much as tenfold.
There is much talk about blockchain creating a personal data economy. What is your stance on this? How could this affect marketing researchers?
I am an absolute believer. I think the current model for extracting insights and compensating consumers for their time is wildly broken. Try explaining the value chain to someone in another industry – how many hands are involved in moving data from a consumer to a brand, how much monetary value is eaten up in the friction and middlemen – and see if this system makes sense to them. It’s a model that’s been around long past its usefulness and it’s time for a new way to gather insights.
In what ways will blockchain benefit consumers?
Our estimation is that a properly designed opinion marketplace should increase respondent incentives 10 times over their current payouts; this will turn surveys from, “Why in the world would you take 10 minutes out of your day for $0.50?” to a real value for consumers who want to share their thoughts and behaviors with brands. Also, we see potential to rank and reward high-value respondents with a greater earning potential and the ability to transparently rank survey companies for length of survey through a well-designed blockchain economy.
Could you share some tips for marketing researchers looking to stay up-to-date on advancements in blockchain technology?
If we look back at previous technological innovations and how they work through our industry, the model for information dissemination starts with industry publications and conferences. These are great places to interact with companies who are investing in these technologies and hear how early adopters leverage the new blockchain tools coming to market. Also, you’ll find early adopters are typically passionate about their work. Pick up the phone and call someone like me or others who are publicly talking about the innovations around blockchain and market research!