Editor’s Note: The use of blockchain technology in market research has started to gain traction. We heard multiple talks about blockchain at this year’s IIeX in Austin. Last Fall, GreenBook hosted a panel discussion on its potential and how companies are starting to use it. In this article, Laurent Rochat details some recent experiments he has conducted and articulates a vision for the benefits it can bring to the larger insights community.
We have been following very closely what is happening in the blockchain space for a few years now. In fact, Innovation Atelier was the very first Marketing Insights company to accept Bitcoin, back in 2014.
The main premise of the technology is to enable decentralized consensus. The consensus is an essential part of our lives, from simple agreements with friends, business decisions to policy-making and governance. Even social norms are unconsciously shaped by collective consensus.
Distributed Ledger Technology (DLT, of which Blockchain technology is a subset) is known mostly for Bitcoin, a peer-to-peer electronic cash system, where a dispersed network of free-willing participants authenticates who owns what amount of the cryptocurrency. The consensus mechanism validates transactions and accounts in an immutable way, with no central authority, and with no trust.
By extension, this consensus mechanism can be used to authenticate anything, ranging from property rights to smart contracts, which embed agreement into code in the form of conditional self-executing programs. Capital and talent are now flowing into building new economic systems and market places for about anything, ranging from energy to health and to consumer goods. We have seen a few teams working on the decentralization of consumer data and decided to pilot the technology.
As we have been among the first ones to use blockchain technology to run surveys, we wanted to report back on our experience to the insights industry.
We partnered with Insights Network, one of the leading Blockchain-Based Market Research Technology providers. Their technology is built upon the EOS blockchain, an enterprise-ready blockchain platform which is fast and scalable.
Insights Network enables consumers to share and monetize their data, from answers to surveys to digital data, with full control over what they share and with whom they share it. Monetization is done via a utility token called Instar, which data requesters (i.e. insight agencies) have to use in order to get the data from the network, and which survey respondents can exchange for fiat currency.
The data remains the sole propriety of the consumers and it is secured through military-grade encryption. On the other hand, data requesters get proof of key consumer information like age and gender through cryptography without having to get any of personally-identifiable data, in full compliance with data privacy regulation like GDPR in Europe. This is very important and one of the distinctive advantages of the technology developed by Insights Network.
We have conducted two quantitative studies using the Insights Network blockchain to learn how we can start applying this new technology to our insights needs.
First, we replicated an experiment we had conducted previously on the impact of context on purchase intention for a weather-related polarizing product. Results of this test are hard to interpret, but the test showed that it’s possible to collect 400 responses in exchange of tokens worth close to four dollars at the time.
Secondly, we conducted a study on privacy perception and technology and reported a few findings on our company blog. We learned that members of blockchain-based panels are skewed towards younger people who are internet or smartphone natives, and who are actively engaging with the nascent decentralized economy.
The evolution of the technology between the two studies, 10 months apart, has been tremendous. The first pilot we did was done on rudimentary software with just 1 question format and no targeting capability. The second pilot offered to target capabilities by gender, age, and geography.
A third version of the software is set to be released in the coming days and will include more question types, extra targeting capabilities and digital data like the location. With this upcoming version of the software, and with each upcoming upgrade, capabilities are expanded and the experience for data requesters becomes smoother.
We haven’t conducted industry-grade validations yet, but we have learned a few things that we consider promising about blockchain usage for insights.
- Data privacy can be hardcoded in smart contracts, making data collection GDPR compliant by default, and saving data requesters the worry of owning personal data they shouldn’t
- The technology has the potential to disintermediate the sharing of data between data providers (survey respondents) and data requesters, leading to industry-level productivity gains
- The technology is evolving fast; it becomes more complete and easier to use for insights players with each iteration
- The incentives given in the form of tokens can carry lower value than traditional incentives. We think this is because tokens are playful, easy to trade and exchange, and they offer an upside if the network grows
- Blockchain-based panels are currently skewed toward tech-savvy Millenials, an interesting target for many brands. This will evolve with adoption, but the skew can prove useful in the short term
- Adoption is on the rise, both among survey respondents and survey purveyors, suggesting that network effects are kicking in, and these can be massive in so-called ‘crypto’ projects
For these reasons, we believe that DLT and blockchain technology is going to create a revolution in the insights industry. We are at the very beginning of this journey; change won’t happen overnight, but it will happen faster than everybody thinks, and we will still be at the forefront of it.