A more efficient model for extracting and handling insights?
The 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 research’ during season five of Silicon Valley, I made a mental note to pay close attention.
So based on my experience, here’s an investigation of what Blockchain is capable of, and how I think this will affect the research industry.
We get this question a lot… “So what is Blockchain?” In most cases, the individual is looking for a technical explanation of how it all works. I always encourage people to focus not on trying to understand the underlying technology but to understand what it enables.
Here’s why… I bet 99% of people have little technical understanding of DNS/IP protocol and server encoding protocols and how they work together to create a media content distribution system, but everyone knows what this is in their daily life – it’s YouTube. It’s just an overly-technical way for me to say, “Go to 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 want to stay away from the technical aspects. Blockchain is not a single piece of 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.
SO with that in mind…
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.
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. 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.
Blockchain is designed to give power back to the individual.
In the same way that the internet was designed to liberate the way users share information, communicate and exchange services, Blockchain can now secure their data during these processes.
I am vastly simplifying a very complicated topic and technology here, but that’s it in essence. In the new Blockchain world, individuals will decide which ‘blocks’ of their data ‘chain’ they would like to share, with whom and at what price.
The problem of personal data privacy is therefore resolved.
Like many other industries, the research industry (whether market research or user research) can possess less than optimal operating processes, data silos, and transactional inefficiencies. Some of the most recognized pain points include:
Blockchain technology is uniquely qualified to address all three of these major pain points.
Here is an overview of what emerging companies are doing to shape the research industry:
Market research technology companies are creating platforms to issue Blockchain tokens that represent consumer data as an asset. Instead of consumers providing their data for free, they are compensated with tokens proportionate to the quantity and quality of data they provide. Personal data is now owned by the consumer in the form of tokens and placed in accounts accessible only by the consumers – instead of data aggregators.
The goal of such a platform is to make consumers feel like they gain a greater benefit for providing their insight and personal data and are therefore more likely to participate in market research studies.
Research technology companies are working on different solutions to poor quality research data. One solution is a better compensation framework combined with a validation process that will approve payment using Blockchain smart contracts. Payment is only disbursed when the smart contract detects that all prior agreed upon conditions, such as filling out a survey correctly, are met.
Another approach being worked on entails KYC or (know your consumer). Sample buyers want to eliminate duplicate respondents when they purchase from different sources. One technology company is engaging the industry to pilot universal IDs for research participants.
Research companies that own a database of consumer information would act as ‘nodes’ of a decentralised ledger system. Universal IDs would be utilised among the nodes as a way to share their ledger of consumer data in a matched and coordinated way. These universal IDs would also be tethered to data repositories, providing the industry with more complete demographic and consumer insight into uniquely identifiable respondents.
As with other industries, data security has become a priority for the research industry. News of hacks into databases that contain sensitive personal data is reported on a daily basis. Like a front door with a cheap lock, the centralised data stores of consumer information are inviting to data thieves.
Technology companies are looking to use decentralised solutions to break databases into separate pieces and distribute them across an entire network of computers. Such a decentralised database would lack a central control point making it a good deterrent to intrusion.
Because Blockchain solutions are decentralised, encrypted, and cross-checked by the whole network it would be more difficult to hack. Look for the market research industry to implement decentralised ledger technology to protect its data assets.
I think there are three areas where we’ll see major impact from this technology.
Firstly, and probably most obvious, we’ll see access to validate 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 Netflix activity and Amazon purchases to answers that I provide in surveys.
Furthermore, every entity from commercial to non-profit will feel the impact of a mass Blockchain adoption but as data is at the literal route of the business of the insight, our industries will be affected even more so.
Here are just a few considerations…
Whilst the big data revolution has only just begun, Blockchain WILL disrupt it. At the heart of big data’s success is the explosion of readily available passive behavioural data; precisely the thing that Blockchain is set to manage.
If surveys do survive they will have to adapt. Firstly, they will have to connect to the Blockchain data available – participants will not have the patience to answer questions about their devices or their use of them when they can give you access to their Blockchain records.
Blockchain with crypto-currency alignment will incentivise all participants to contribute in a meaningful and honest way, as dishonesty will affect their Blockchain reputation.
The large data warehouses will no longer have control, and neither will the client in terms of respondents data. Every insight agency, regardless of size, will have equal access to exactly the same personal and behavioural data via Blockchain.
In last year’s GRBN Trust Survey, the market research industry ranked below mobile phone operators, search engines and online stores with only 26% of participants saying they trusted the industry, many of their concerns related to how personal data is collected. By decentralizing the data and giving control back to the respondents Blockchain can establish trust among participants in market research.
I am an absolute believer in Blockchain. I think the current model for extracting insights and compensating 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.