Blockchain in Marketing: Do Smart Contracts and blockchain technology have usecase in marketing?

Blockchain In Marketing

Over the past decade, the marketing sector has primarily relied on data. Currently, with the advent of Big Data, companies are collecting more than ever before. Of the four main aspects of Big Data (V’s- Volume, Velocity, Variety and Veracity), it has become clear how important the first three aspects are.

A larger volume of data has led to efficient decision making such as programmatic and customer-centric marketing. High-velocity data such as near real-time data from mobile phones has unearthed more information about customers. The wide variety of data has enabled companies to acquire all-rounded data from text, imagesand , videos to numbers for better analysis.

However, when it comes to the fourth V, Veracity, challenges associated with accuracy, reliability and transparency arise. In data-driven marketing, Blockchain technology delivers three unique characteristics that address these limitations; immutability, transparency and decentralization.

Before diving into how blockchain can be implemented in marketing, let’s start by understanding what Blockchain Technology is.

What is Blockchain?

Blockchain in marketing

According to Martechadvisor, blockchain is a decentralized distributed digital ledger. In simpler terms, the technology can be described as a database that stores data across various nodes as opposed to a single server. Data on the blockchain is stored in units known as blocks. Each block contains multiple transactions, a timestamp, and the cryptographic hash function of the previous block.

What is blockchain in marketing?

Despite being applied mainly in the financial sector, blockchain has a set of fundamental features that make it suitable for the marketing sector:


Unlike a client-server model where only one entity stores the information and users have to communicate with the server to access the information, blockchain has a peer-to-peer model. With blockchain, there is no single host for the data or any intermediaries. Instead, the data is spread to all participating nodes in the network. Therefore, the data can be shared without the need for any middlemen.


The second aspect is the assurance of security through immutability. Once a block has been verified and appended to the blockchain, it cannot be altered. If a malicious party tries to modify a block’s data, this would, in turn, alter the hash values of the block and all previous blocks since the blocks are “chained” together using hash values. Since the other nodes have a different ledger from the one presented by the malicious party, the block is considered invalid and therefore rejected.


Since blockchain is a distributed ledger, all users in a network have access to the transaction data. This might raise some suspicion for users who may want to remain anonymous. Blockchain alleviates this by issuing unique identity addresses that cannot be linked to any individual or organization—a key aspect for consumers who might want to share their data or views anonymously.

What are smart contracts, and how do they fit into marketing?

diagram of smart contract

According to IBM, smart contracts can be described as programs stored on a blockchain that run when predetermined conditions are met. They are typically used to automate the execution of an agreement so that all participants can immediately be sure of the outcome without an intermediary’s involvement or time loss. They can also automate a workflow, triggering the next action when conditions are met.

The marketing sector is an active sector that requires constant interaction between marketing teams, companies and consumers. It also involves numerous repetitive processes and analysis. With smart contracts, companies can automate some of these processes.

However, the impact of blockchain on marketing spans beyond just smart contracts; let’s look at how blockchain will disrupt the marketing sector.

How Blockchain technology will disrupt marketing

Marketing has changed a lot in the past decade. Much of this change can be attributed to AI, Big Data and analytics, which have helped marketing companies efficiently gain access to consumer data and draw valuable insights.

However, despite these changes, the marketing sector is set to go through another revolution, thanks to blockchain technology. The following are some of the ways blockchain is revolutionizing the digital market for the better.

Through empowering digital marketing security

Over the past decade, information security has grown to be a significant barrier in online marketing. This is because online shopping and transactions are primarily based on individuals’ credentials and sensitive information such as credit card details, home address, Identity card detail and contact details. Most consumers are reluctant to provide this information due to the ever-growing risks of identity theft, data loss, credit card information theft, content manipulation and unauthorized account access.

Moreover, tracking consumer behaviour on a website requires cookies, which are highly susceptible to cloning and misappropriation by malicious entities and may end up being used to steal the consumers’ data. Therefore, marketing companies must integrate technologies that help close these existing loopholes.

In this respect, blockchain technology provides unprecedented levels of security. The potential of blockchain lies within its decentralized and distributed nature. The technology uses several security mechanisms such as asymmetric and cryptographic encryption, digital signatures, and access control to secure the storage and transmission of data between consumer, marketing companies, and e-commerce stores.

The decentralized nature of blockchain also ensures that all parties are economically well-off and better secured. For instance, consumers and brands will always have a single and consistent ledger of information regarding transactions. This also enables consumers to have better control over their personal data. Since data is also spread out to all participants, this eliminates a single point of failure, making it almost impossible for malicious parties to alter any information, thus achieving resistance from attacks such as DoS.

Eliminating intermediaries and middlemen

The advent of the internet eliminated traditional intermediaries and led to the emergence of new online intermediaries that provide various services such as; online search capabilities, advertising, trust provision and communication. As a result, online businesses heavily rely on these intermediaries to recognize their consumers’ needs, wants and attention and advertise their products to the consumers.

However, to perform this seamlessly, brands are expected to rely entirely on the intermediary’s decisions and even pay a premium fee for these services. For instance, many e-commerce stores rely heavily on social media platforms to identify their customers and thereafter advertise a brand’s product.  

In order to address these issues, blockchain technology provides a platform that allows brands and consumers to interact directly and in real-time. Since blockchain technology ensures trustless transactions and interactions, brands can build a strong relationship with their customers as they receive first-hand feedback from consumers.

Consumers are also able to provide their views to brands securely without the need for any intermediaries. Additionally, blockchain’s ubiquitous and interactive nature allows marketers to reduce costs by bypassing the middlemen and eliminating all non-value expenses in the intermediary layer.

Reinforcing trust and transparency

Trust is a very crucial factor when it comes to B2C e-commerce. However, over the past decade, trust in brands has severely been eroded. According to the 2018 Edelman Trust Barometer, most online brands witnessed a significant drop in consumer trust in 2017. To a large extent, trust is determined by the availability of a technological infrastructure the enables transparency in the absence of face-to-face marketing in digital marketing. 

In order to empower trust and transparency in digital marketing, blockchain provides a platform that allows entities to interact in a transparent space. Building on blockchain’s key features, decentralization, immutability, consensus mechanisms, and transparency, blockchain ensures that consumers and marketing brands are operating with integrity and honesty. Blockchain also ensures that marketing brands match their claims since consumers can validate any claims made by marketers.

Blockchain-enabled transparency also builds trust since it allows consumers to have total control over their data. Therefore, they can only share the data with companies they trust. On the other hand, marketers benefit from this since they get access to data from consumers who have a high probability of making a purchase. Furthermore, blockchain, through smart contacts, ensures all the set conditions are met. With smart contracts, code is law.

Therefore, consumers can be confident that marketers have to meet the predetermined processes laid out in the smart contract; otherwise, they will be categorized as fraudulent parties. On the other hand, brands can efficiently compensate marketing teams since payments are only released once a milestone is achieved and specific marketing goals are achieved.

Enhancing privacy protection

Privacy is a growing concern to consumers using online technology services. Most consumers are very anxious and worry about their anonymity when making online transactions. Recent improvements in data collection technologies and new data mining techniques have enabled brands to track and collect data from their online customers easily. As a result, this creates new challenges with excessive intrusiveness in the privacy of customers. Although this allows brands to acquire insights on consumer behaviours, it greatly violates the privacy of customers.

Blockchain technology solves this challenge by providing consumers with unique addresses. This ensures that their identity is private, and they can only be identified by the address; a large number (1BvBMSEYstWetqTFn5Au4m4GFg7xJaNVN2) that cannot be traced to the consumer. However, although the identity is anonymous, the blockchain allows other users to verify the transactions as the information is available on the blockchain.

Allowing companies to get higher quality consumer information

Today, most of the ads on the internet require a user to sign up or provide some personal information to access a service or product. Since most people want to control their contact information and don’t want to always sign up with companies, most customers provide false information.

This information does not have any value to marketing brands and, in most cases, ends up misleading them, which may result in huge losses due to misguided marketing strategies. With the advent of the token economy in the blockchain, blockchain allows consumers to charge for their data or receive an incentive every time they use their data. For brands, this creates a unique opportunity to obtain accurate and precise market information regarding their products and consumers’ behaviour.

Avoiding the fake factor

Most of the products advertised on the internet are likely fake, from fake likes, products, and services. Most malicious parties claim to deliver high-end services and products for a hefty price. Since digital marketing does not involve face-to-face interaction, it is challenging for consumers to identify trustworthy brands.

This creates a negative perception across digital marketing, and most brands do not even get a return on their investment in marketing since consumers are highly skeptical. Since blockchain is decentralized and distributed, consumers can verify the claims of the ads through the blockchain. Using the blockchain, consumers can also verify the authenticity of a product or service. In turn, brands can ensure that their funds are directly allocated to their target audience as there are no intermediaries involved.

By providing more efficient loyalty programs

Customer loyalty programs and engagement can make or break companies, and as such, loyalty programs represent a strategic investment for all types of brands to maintain their customers. These loyalty programs act as a way for brands to reward their customers for repeat business and incentivize them to return or even refer an organization to other people.

However, as the loyalty program grows exponentially, numerous challenges arise; fragmentation, low redemption rates, high cost to set up and maintain the loyalty programs, few customer incentives and data security concerns.

Blockchain technology can solve some of these issues by connecting brands and consumers. Blockchain, through smart contracts, allows brands to develop an open token-based ecosystem that rewards consumers using tokens.

This ensures there is less clutter in the programs, and consumers can now use the token provided, which can be redeemed for a product across various stores in the same sector or even redeem the token for crypto assets. Moreover, this reduces the set-up and maintenance cost since multiple organizations can use a single token platform with loyalty program functionality.

Companies at the forefront of using Blockchain Technology to re-shape marketing

Although blockchain is in its infancy when it comes to marketing, numerous companies are already exploring how best to leverage blockchain. For instance, brands are exploring whether blockchain can help solve transparency issues in marketing and advertising since privacy and data security are growing concerns among consumers.

Numerous companies realize the potential blockchain technology has; here are three examples;

Rebel AI

Rebel AI combats fraud with a blockchain-enabled cryptographic verification system for advertisers and marketers. The marketing teams involved are issued with unique identities that help prevent domain spoofing- unverified ads or fraudulent websites that intercept marketing traffic. The assigned IDs are immutable and are stored on the blockchain. This ensures their marketing activities are transparent, and users can view ad players and their activities on the network.


Lucidity platform uses blockchain to store and verify all marketing transactions. The platform uses smart contracts to ensure market teams have access to real-time data on current campaigns, payment processes, ad publishing and prevent fraud by identifying and flagging fake bot views.

Toyota is one of the clients of Lucidity. After using the Lucidity platform, Toyota saw a 21% rise in campaign performance. By flagging websites with high levels of discrepancies, Lucidity provided Toyota with a list of high performing sites; thus, eliminating wasteful spending.


Tech giant IBM uses its blockchain platform to verify the advertising supply chain. IBM partnered with advertising and analytics company, Mediaocean to offer an end-to-end ledger that provides marketing teams with better insights. The aim is to eliminate wasteful marketing spending on unnecessary third-party platform and expose potential fraudulent data.

Final thoughts

The marketing sector has always been an early adopter of new technologies, whether it is applied to understanding customer needs, serving more client-centered content, or relationship management. While blockchain is in its early stages, there are several ways marketers can benefit from blockchain. One of the most significant benefits of blockchain is cutting out intermediaries. This means that brands will have direct access to consumer data and, as a result, reduce the cost of marketing and data collection. Another benefit is transparency; with blockchain, both brands and consumers have access to marketing data, which builds trust between the involved parties.

In the end, blockchain is poised to disrupt digital marketing as we know it. Therefore, marketers should be prepared to reevaluate their current marketing models and processes to better leverage blockchain technology.

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