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Will GDPR and blockchain live up to their hype in 2018?
The only thing we know for sure is that marketers will definitely keep these trends top of mind as we head into the new year.
Sure, General Data Protection Regulation (GDPR) and blockchain have been a hot topic for the past several months. But is either of them more than just a buzzword? I spoke to some marketers to see what they had to say about what 2018 holds for these two trends.
Blockchain could solve all our problems — or not
Seems like everyone is talking about blockchain, the distributed shared ledger that promises to keep transactions secure and anonymous. Most know it as the technology behind bitcoin. Yes, bitcoin itself is arguably caught up in some hype, but the future for blockchain looks promising.
Blockchain will break out of its fintech persona
Though wildly popular, bitcoin is just the beginning of what’s sure to be widespread blockchain adoption. In 2018, we will likely see blockchain backing more and more technology solutions.
Chaitanya Chandrasekar, CEO and co-founder of data platform QuanticMind, says that marketers need to think of the technology beyond its most famous offspring.
“The 10x price spike of bitcoin after the December news that it would be listed on CBOE and CME is exciting news, but the cryptocurrency is showing the telltale signs of a bubble, and it’s not clear how much more growth will be sustainable long-term,” Chandrasekar said. “That said, blockchain as a technology approach may still have the ability to be transformational, given that it, in theory, enables an efficient, two-sided market with no intermediaries, and with instantly verified transactions. This is probably why we’re seeing anecdotal examples of the technology being adopted to speed efficiency and cut down on fraud, such as UPS joining the Blockchain in Trucking Alliance (BiTA) to attack the extremely significant issues of cargo theft (estimated to cost $30B annually), fraud and massive inefficiencies caused by third-party players.”
Chandrasekar says to expect challenges.
“That said, there are still significant hurdles between blockchain and widespread adoption, including user experience, interoperability, privacy questions and regulation. Even the recent ruling on net neutrality might affect adoption as internet service providers may, hypothetically, throttle access to key blockchain hubs online,” Chandrasekar said.
Neal Sharma, CEO and co-founder of digital marketing agency DEG Digital, agrees.
“Blockchain’s rise has been associated with bitcoin for good reason, but to me, blockchain’s story will stretch well beyond bitcoin or other cryptocurrencies,” Sharma said. “This technology powering the transparency and decentralization of data has the potential to affect how we use the Internet in ways we haven’t considered yet.”
“In the coming year, you will see blockchain’s impact in the ‘back office’ more so than the ‘front office’, handling certain data transfer, contract execution, intellectual property protection and so on. Despite the majority of people having used the internet for banking, shopping, file sharing and handling sensitive information for years, there’s still widespread hesitancy when it comes to the validity of data online. Blockchain is the closest we’ve come thus far to a truly credible system and without a single point of failure.”
John Bates, director of product management at Adobe Analytics Cloud, says that blockchain technology will be applied in many different ways.
“This past year, we saw the rise of blockchain applied to cryptocurrency financial services,” Bates said. “In 2018, we will see blockchain-based distributed applications solving non-financial use cases. This includes secure, distributed data storage, verified advertising and media, identity and data privacy management, as well as verified digital asset rights. On the contrary, non-financial applications will be solidified for both B2C and B2B use cases. The blockchain incumbents with the largest market cap (e.g., bitcoin, ethereum, etc.) will be challenged by blockchain-based cryptocurrencies that solve many of the scalability issues of these first-to-market technologies.”
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The jury is out on GDPR
Although GDPR is European Union legislation, it applies to any company that handles European citizens’ data. Still, no one really knows how US companies will comply or how breaches will be dealt with. But whether you believe that GDPR is Y2K again or that it doesn’t apply to you, one thing is for certain: On May 25, 2018, it will be enforced.
Many marketers we spoke to over the year told us that the legislation will absolutely affect how their companies handle data, and some even suggested it will cause an attitude shift in business owners.
Companies will need to rethink…
Peter Reinhardt, co-founder and CEO of customer data platform Segment, says that GDPR could cause companies to reconsider how they use data.
“Consumers are going to be thinking about security and privacy of their data, and this increased awareness has given rise to new regulations like GDPR,” Reinhardt said. “The increased privacy in Safari and GDPR is part of a larger trend where companies and regulations are moving to protect consumers from third-party data brokerages — which make the ad tech world go round. This will continue accelerating the demise of the ad tech ecosystem outside of Facebook and Google.”
Judd Marcello, EVP of global marketing at Cheetah Digital, says that GDPR will create marketing opportunities for companies who want to show that they care about their customers’ data.
“GDPR is a crucial data protection regulation that marketers covering Europe must comply with, but it also represents some positive opportunity for marketers for a few reasons,” Marcello said. “First, contact without consent can lead to a bad customer experience, and it can be expensive. By requiring consent, your marketing data may see an uptick in cleanliness, accuracy and engagement. Second, garnering the consent necessary to comply with GDPR gives your brand an opportunity to gather more information about your customers and their preferences, and re-engage with dormant or inactive subscribers. It allows you to more clearly segment customers based on their needs and wants, while also being more transparent with customers about what they can expect. By allowing customers to opt-in to specific mailings or campaign types, you can increase the effectiveness of those campaigns. Reactivation campaigns (also sometimes called win-back or re-engagement campaigns) can prove profitable for brands, too.”
Chandrasekar says that companies will look for solutions that allow them to still use third-party data while complying with the new regulations.
“Unfortunately, by the end of next year, of all companies expected to be affected by GDPR, fewer than 50 percent are expected to be compliant,” Chandrasekar said. “While the regulations are absolutely an important development to protect personal data for EU citizens, I don’t believe data security measures of this sort must necessarily cost businesses operational flexibility. Consider the case of digital marketing, where companies are drowning in data overload — corporate data production has been predicted to increase 4,300 percent by 2020, and mismanaged data will cost businesses $3.3 trillion. It’s crucial for digital marketers to centralize data to give them full visibility across their sales funnel and pull genuinely data-driven insights from it, but also possible to keep that data completely secure. Unfortunately, there doesn’t yet exist a solution on the market that can do both. Yet.”
Paul Wright, CEO at media buying platform iotec, says that ad tech will continue to be consolidated due to GDPR, pressure on the ecosystem and business models predicated on parasitic business practices.
“GDPR will place significant pressure on the ad tech industry to rapidly reform its current practices,” Wright said. “The impending regulation will place the power of data back into the hands of [the] consumer, enabling end users to take control of where their private, personal and identifiable data is held, and by whom. The requirement to audit what data is being collected will bring to light business models predicated on parasitic business practices, enabling regulators to challenge bad practice more readily.”
Our prediction: dunno
The only thing we know for sure is that blockchain and GDPR will remain buzzworthy well into the new year. And we know that companies are hard at work creating blockchain solutions and making changes to comply with GDPR as we speak. But how it will all shake out is anyone’s guess.