The power of the Libra alliance — Part 1
We keep hearing speculations on how Facebook’s Global Coin may or may not work. By having a quick look at the members of the ’Libra’ alliance, we can already observe how they want to help millions of unbanked and poor people by collaborating with NGOs such as Kiva and Mercy Corps; yet, they also feel the need to help wealthy millennials shopping on Farfetch and using Lyft and Uber to spread their payments and share bills on a night out.
Nonetheless, I want to take a more holistic view on this and a less evident one to people who have not dealt with data-driven marketing before. Google, Facebook, big agencies, and tech players have already tried, for several years, to create a Universal ID to track the consumer journey and unlock the holy grail of attribution modelling. Walled gardens, such as Google, Facebook, Apple, and Amazon, in one way or another, have prevented this from happening. They know that having access to a single piece of data that you, as a consumer, may or may not share with the single advertisers and/or publishers is important, but not transformational to their businesses. The key to unlocking this Universal ID is in the power of alliance. This means sharing information amongst the top apps/publishers, get this information in a Data Lake or Data warehouse accessible by these players and make sense of this data at an aggregate level, so that each part of the alliance can benefit from this and use it as they see fit. Data, being a commodity, could be tokenised and exchanged with the use of smart contracts. This guarantees traceability and will enable these players to monitor fraud (fairly common in e-commerce), frequency of use of an app, tenure, monetary value of a user…you know where I am heading with this.
I hear people talking about ’the power of data’, without knowing much about the complex and clunky adtech and martech industry, and the various data sources available to advertisers. It is a malfunctioning industry that, pre-GDPR, was driven by data acquired in dubious ways and stored in silos. Post-GDPR, advertisers and publishers have somehow rediscovered the power of 1st-party data, which is free, but also scarce; and the most important 2nd-party data, coming from partnerships that are difficult to form and negotiate. However, structuring these partnerships (both dyadic and plural) is not always an easy job, especially when it comes down to measuring success for all the parties involved, and determining the long-term value of the partnership.
If we take a look at the alliance put together by Facebook, a famous and less famous clique of brands who will spend $10 million to manage their own node and access information, we can already spot a few similarities amongst the players part of this coalition. Farfetch, Ebay, Spotify, Booking.com, and Uber are all marketplaces, or platforms used by members to exchange a product or service, with an audience skewed towards younger and wealthy demographics.
In her new book, Shoshana Zuboff introduces the concept of ‘surveillance capitalism’. She explains how the world has changed. She says ’it is not simply about tracking us and selling ads, it is the business model for an ominous new marketplace that aims at nothing less than predicting and modifying our everyday behavior — where we go, what we do, what we say, how we feel, who we’re with’. This is quite spooky when looking at the ecosystem Facebook is building.
As Facebook releases its Global Coin, does it mean that our accounts will associated with a permanent ’Libra ID’ that will enable these players to track us in the same way blockchain can track the provenance of a bottle of wine? In exchange for what? Ease of use / ease of pay, discounts, universal subscriptions that will lock us in multiple services? Are we implicitly accepting to be traded as a token on a private exchange in the same way our data has been traded (ironically) in a more private way with the current tech infrastructure? And last but not least, with so many incumbents seizing the opportunity to develop their blockchain capabilities, what will happen to the dream of a fully decentralised society?
Part 2…coming soon!
