As blockchain matures, the market research industry is in a particularly strong position when it comes to understanding its promise, as well as taking advantage of greater transparency and efficiency. By Paul Neto.
Blockchain and cryptographic techniques are getting a lot of play on the airwaves, especially with the buzz surrounding Facebook’s Libra. This new cryptocurrency is coined (pun intended) by Facebook as a “new decentralised blockchain, a low-volatility cryptocurrency, and a smart contract platform that together aim to create a new opportunity for responsible financial services innovation.”
But Libra is just the latest in the short history of blockchain, which really began with Bitcoin as an implementation that first raised awareness of the technology itself. Beyond cryptocurrency there are several other high profile uses, including Walmart’s employment of blockchain for food safety. The retail giant has been working with IBM on the project, and will require all suppliers of leafy green vegetables to upload their data to the blockchain this year.
As the marketplace starts to mature, and blockchain is seen less as a disruption and more as a mainstream practice, understanding consumer behaviour in this ecosystem will become more vital. I don’t believe that asking consumers what they think about blockchain is useful. However, if you ask them if they want the benefits provided by blockchain, the response will be positive. Consumers don’t necessarily care about blockchain, nor do they understand it, but they do understand privacy, data ownership, transparency and better compensation for their data.
The role of the market research industry
The industry is in a particularly advantageous position when it comes to understanding the promise of blockchain. This industry has the most intimate knowledge and understanding of the consumer, and an intrinsic understanding of data integrity, populations, sampling rigour and representativeness.
The other advantage for market research is that there is an existing ecosystem where consumers engage in a marketplace to share data with brands through surveys, focus groups, and general feedback. Blockchain is particularly efficient at disintermediating middlemen, making this a prime industry to have a positive impact and bring the brand closer to the consumer. Much of the activity in market research involves the use of data brokers, panels, platforms, and other intermediaries that blur the supply chain. Blockchain is poised to help provide more transparency, accountability and efficiencies in this process, similar to how it is being deployed within advertising.
What better way to find out if our theory was true than by employing blockchain in a real-life research setting? Our recently completed pilot project set out to demystify the application of blockchain within market research, illustrate the technical workflow, display the transparency provided by the blockchain, and understand the user behaviours and attitudes in this environment. Results were surprisingly positive, with participants showing high levels of engagement and responsiveness. One illustration of this was the finding that 78% of participants, when asked directly, were willing to enable and share passive behavioural data sources.
Expansion into other industries
When you couple all the benefits of using blockchain in market research with increased data quality, transparency and data integrity, there is a clear opportunity for peripheral spaces such as advertising, AI and brand engagement.
- Digital advertising is in the midst of an upheaval: privacy-focused regulation such as GDPR, more restrictive browser support for third-party cookies and cross site tracking, and consumer attitudes towards techniques such as retargeting. Advertising is using blockchain to clean up its supply chain, alongside taking advantage of the same benefits for market research: transparency, accountability and fraud mitigation
- AI systems are particularly sensitive to poor and incomplete data, thus are using blockchain to build data integrity into their models. Because AI is based on the premise of learning from data, it is very sensitive to poor data as it can lead to wrong conclusions and quickly becomes biased. When you look at the increased adoption of AI across industries, the need for better research-level quality data is clear. Most AI algorithms require massive quantities of training data to function, at least some of which is person-based (such as passively collected behavioural data)
- Brands are using blockchain to address supply chain and transparency in their processes to position themselves as responsible companies, create accountability and ensure quality. The Walmart mandate is a good example of this practice, and FedEx is using blockchain on a practical level, incorporating it into the supply chain management process.
The foundational premise of market research is an understanding of the consumer. It’s clear that consumers are waking up to the value of their data and the increasing need for privacy. This new level of awareness will drive demand for new solutions, such as blockchain, to address these concerns head-on. Its intrinsic characteristics of transparency and accountability go far beyond hyped cryptocurrencies like Libra. Blockchain lends itself well to research and can also solve prevailing consumer data concerns in related industries.
Paul Neto is chief marketing officer at Measure Protocol