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How Blockchain Is Creating a New Future for Digital Marketing The transparent nature of blockchain data will allow companies and customers alike to feel more secure.

By Andrew Medal Edited by Dan Bova

Opinions expressed by Entrepreneur contributors are their own.

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Advertising today is a multi-billion-dollar industry. And, according to market research company Forrester, digital marketing expenditures in the United States are on pace to reach levels near $120 billion by 2021. No wonder: Every day, companies like Google, Facebook and Amazon collect information about consumers nonstrop.

Related: Just What the Heck Is Blockchain? Watch This Explainer Video.

However, nearly 50 percent of all ad traffic is being generated by bots. Brands are paying huge amounts of money to reach potential customers. But this doesn't give them any guarantee that those ads will increase sales.

What's intriguing is that this scenario could well change once businesses have the ability to target individual customers directly.

Already, a number of technological advancements, like blockchain and smart contracts, are innovating the digital marketing industry to do just that.

I'm bullish on blockchain as an underlying technology that's going to spur disruption in more ways than we can think or dream. That's partly why I'm building an augmented reality platform that integrates cryptocurrency and rewards users for viewing augmented reality (AR) experiences. But, mine is just one simple use case.

What's yours? Let's look at how your business could utilize these innovations to more effectively market itself.

Direct-to-consumer digital marketing

Blockchain, the revolutionary technology that has recently taken the advertising industry by storm, allows information to be stored and distributed, but not to be changed or copied.

Because blockchain is a decentralized system, data stored this way has a high level of security. This technology is going to disrupt and overhaul the online advertising industry because it will negate the need for middle men. Currently, businesses run Google or Facebook ads, and both platforms make money off these ads. But blockchain companies, like BitClave, are focusing on search-data privacy, giving users full control over their data.

BitClave's search engine uses Ethereum blockchain technology and eliminates the need for ad service people, creating a direct connection between consumers and businesses. This is the hallmark of blockchain technology: It eliminates the need for middle men in all transactions.

When users perform a search, they can select the amount of data they want to be released to advertisers. Then, unlike what happens with other digital marketing services, users can be compensated for their data. So, instead of an intermediary selling your data to advertisers, you're selling it to them directly -- yourself.

Cross-promotional B2B contracts

Smart contracts assist in helping you exchange money, shares or anything of value in a conflict-free and transparent manner and letting you avoid additional players, like lawyers. These computer programmed contracts operate on blockchain technology that facilitates, verifies and executes the terms of an irrevocable contract that can only be replaced by a brand new contract.

Related: Why You Can't Afford to Ignore Cryptocurrencies and Blockchain Anymore

These contracts will make B2B cross-promotional marketing much more efficient, especially in the age of influencers and bloggers, who use platforms such as Instagram and YouTube to cultivate personal brands.

Digital marketing with this group of influencers can be fruitful but has its challenges since there is no third party regulating the terms of the agreement and each individual determines his or her own costs.

Smart contracts can automatically enforce obligations from all parties involved, to ensure that payments are made only after the terms are met. For example, if a blogger never publishes an article or social media post about a brand, the smart contract that's in place won't release the blogger's payment. Each contractual milestone has to be met in order for the next step of the process to take place.

"Digital marketing fuels the engine of global ecommerce today, and as such, it should rely on the most advanced and secure backbone, rather than the security risk-prone technologies of yesterday," Roger Haenni, cofounder of the blockchain-based data storage company Datum,, told Forbes last month.

Blockchain allows for a "new class" of services with smart-contract technology. This technology helps businesses focus on commerce and protect themselves, Haenni said.

Transparency in contracts and with consumers

Companies can use blockchain to show consumers whom they are selling their data to. And, since this information cannot be changed or copied, companies that use this technology to store their data can rest assured that their information will not be tampered with.

Related: Where Is Social Media Headed in 2018 and Beyond?

The transparent nature of blockchain data can also make consumers feel at ease because companies cannot manipulate their data. This tells consumers that the data and information they are viewing is factual and accurate. And that is something consumers want.

Andrew Medal

Entrepreneur & Angel Investor

Andrew Medal is the founder of The Paper Chase, which is a bi-weekly newsletter. He is an entrepreneur and angel investor.

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