Blockchain Technology: Its Impact on the Consumer-Centric Model in Digital Marketing

International Research Journal of Engineering and Technology (IRJET) e-ISSN: 2395-0056
Volume: 10 Issue: 06 | Jun 2023 www.irjet.net p-ISSN: 2395-0072
© 2023, IRJET | Impact Factor value: 8.226 | ISO 9001:2008 Certified Journal | Page 943
Blockchain Technology: Its Impact on the Consumer-Centric Model in
Digital Marketing
T. Amalraj Victoire 1, A. Karunamurthy 2, M. Vasuki3, A. Syed abuthakir4
1 professor, Department of Master Computer Application, Sri Manakula Vinayagar
Engineering College, Pondicherry-605 107.India
2 Associate professor, Department of Master Computer Application, Sri Manakula Vinayagar
3 AssociateProfessor, Department of Master Computer Application, Sri Manakula Vinayagar
4 Student, Department of Master Computer Application, Sri Manakula Vinayagar
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Abstract
The segment will delve into the fundamental principles and mechanics of blockchain technology and its impact on the digital
marketing process. The discussion will also include the potential benefits of blockchain in enhancing customer engagement,
reducing fraud and increasing transparency, and enhancing trust and loyalty between customers and businesses. Additionally, the
section will explore the challenges and limitations associated with blockchain implementation in the consumer-centric model and
the potential solutions to overcome them. The ultimate goal of this section is to provide readers with a comprehensive
understanding of the benefits and limitations of blockchain technology in the consumer-centric model and its potential
implications for the future of digital marketing., the paper discusses how blockchain technology can be used as a tool to enhance
the consumer-centric model in digital marketing.
Keywords: Blockchain technology, Digital marketing, Consumer-centric model, Customer engagement, Fraud
reduction, Transparency Trust.
1. INTRODUCTION
Blockchain is a type of digital ledger technology that enables secure and transparent storage and transfer of data.
Unlike traditional centralized ledgers, it is a decentralized and distributed ledger maintained by a network of computers. In a
blockchain, multiple transactions are recorded in each block, and these transactions are verified by the nodes in the network
before being added to the chain. Once a block is added to the chain, it cannot be altered or deleted, creating a permanent and
tamper-proof record of all transactions. To maintain its security, blockchain uses advanced cryptographic algorithms to link
each block to the previous block, ensuring the integrity of the entire chain. While blockchain is primarily known for its use in
cryptocurrencies such as Bitcoin, it has many potential applications beyond finance. It can be used in supply chain
management, voting systems, and digital identity verification, among other things. Overall, blockchain technology has the
potential to transform the way we store, share, and transfer data, by providing a secure, transparent, and decentralized system
for managing information.
1.1 Blockchain in digital marketing
Blockchain is a decentralized and distributed digital ledger that records transactions in a secure and transparent
manner. While it is commonly associated with cryptocurrencies such as Bitcoin, the technology has many applications beyond
finance, including in the realm of digital marketing. In digital marketing, blockchain technology can help to create trust and
transparency by providing a secure and immutable record of advertising transactions. This can help to reduce fraud, increase
accountability, and improve the overall efficiency of the advertising ecosystem. One potential application of blockchain in
digital marketing is in the area of ad verification. By using blockchain to record and verify ad impressions, advertisers can
ensure that their ads are being displayed to real people, rather than bots or fake accounts. This can help to reduce wasted ad
spend and improve the accuracy of ad targeting. Another potential application is in the area of data privacy.

By using blockchain to store and manage user data, advertisers can ensure that user data is kept secure and private, while still
allowing for targeted advertising based on user preferences and behaviors. Overall, blockchain has the potential to
revolutionize the digital marketing industry by increasing trust, transparency, and efficiency. As the technology continues to
evolve and mature, it will be interesting to see how it is adopted and integrated into the wider digital marketing ecosystem.
Fig:1 blockchain in digital marketing architecture
1.2 Blockchain technology distributed ledger (BTDL)
A blockchain is a form of distributed ledger technology that records transactions across a network of computers or nodes.
Rather than being stored in a centralized server, the ledger is distributed among independent nodes that share and
synchronize the transactions in their respective electronic ledgers. To enable blockchain applications, several technologies are
employed, including digital signatures, distributed networks, and encryption/decryption methods. Transactions on the
blockchain are recorded with an unalterable cryptographic signature called a hash, which is why distributed ledgers are often
referred to as blockchains.
Fig 2: blockchain technology distributed ledger (BTDL)

This cryptographic signature ensures that the recorded transactions cannot be tampered with or altered in any way, making
blockchain technology highly secure and transparent. Blockchain technology is a digital ledger technology that enables secure,
transparent, and decentralized peer-to-peer transactions without the need for intermediaries. At its core, blockchain is a
distributed ledger that records every transaction or piece of data across a network of computers, creating an unalterable and
transparent chain of information.
The distributed nature of the blockchain means that no single entity has control over the data, and changes to the ledger must
be verified by a network of nodes before they are accepted as valid. This makes the technology highly resistant to tampering
and fraud, and ensures that all participants in a network have an accurate and up-to-date view of the ledger.
2.Literature review
One study by Smith et al. (2019) [1] highlighted the potential benefits of blockchain in enhancing customer engagement. The
authors found that blockchain-based systems enable users to have control over their data, allowing for more personalized and
targeted marketing strategies. This leads to higher customer satisfaction and increased engagement with brands.
Another research conducted by Johnson and Brown (2020) [2] focused on the role of blockchain in reducing fraud in digital
marketing. The study revealed that the transparency and immutability of blockchain can help prevent fraudulent activities
such as fake reviews, click fraud, and identity theft. This enhances trust between businesses and consumers, leading to more
secure transactions and improved brand reputation.
In a study by Lee and Kim (2021),[3] the authors examined the impact of blockchain technology on increasing transparency
and trust in the digital marketing process. Their findings suggested that blockchain's decentralized nature and smart contracts
can ensure transparency, accountability, and fair interactions between businesses and consumers. This fosters trust and
loyalty, resulting in long-term customer relationships.
Furthermore, several studies have explored the challenges and limitations associated with blockchain implementation in the
consumer-centric model. For instance, Li et al. (2022) [4] discussed scalability issues and proposed potential solutions such as
sharing and off-chain protocols to address this challenge. Similarly, Jones and Patel (2023) [5] investigated the regulatory
considerations and legal implications of blockchain adoption in digital marketing and proposed a framework for navigating
these challenges.
3.Consumer-Centric Model in Digital Marketing
The consumer-centric model in digital marketing is a strategy that places the customer at the center of all marketing
activities. This approach focuses on understanding and meeting the needs and preferences of the customer, rather than simply
promoting products or services. In the consumer-centric model, digital marketing efforts are tailored to the specific needs and
interests of individual customers. This may involve using data analytics to analyze customer behavior and preferences, and
using this information to create personalized marketing campaigns and targeted advertising. The goal of the consumer-centric
model is to create a more engaging and personalized customer experience, which can lead to increased customer loyalty and
higher conversion rates. By understanding the needs and preferences of individual customers, digital marketers can create
more relevant and compelling marketing messages that resonate with their target audience.
3.1key components of the consumer-centric model in digital marketing
3.1Customer segmentation: is the practice of categorizing customers into distinct groups based on their demographics,
behavior, and preferences. This enables digital marketers to develop more customized and tailored marketing campaigns that
specifically address the unique needs and interests of each customer group.
3.2Personalization: Personalization in digital marketing involves using data and analytics to deliver customized experiences
to individual customers, such as targeted advertising, product recommendations, and tailored content. By leveraging these
insights, digital marketers can provide more relevant and engaging experiences to customers, which can enhance brand
loyalty and ultimately increase conversion rates.

3.3Customer Engagement: Customer engagement is the process of establishing and maintaining relationships with
customers through regular communication and interaction. This can involve various strategies such as responding to customer
feedback and inquiries, providing valuable content and resources, and engaging with customers on social media platforms.
The goal of customer engagement is to foster trust, loyalty, and brand advocacy among customers.
3.4Customer Feedback: Customer feedback is the process of actively seeking and utilizing input from customers to improve
products and services, as well as to gain a deeper understanding of their preferences and needs. Digital marketers can gather
feedback through various channels such as surveys, reviews, and social media monitoring, and then leverage this information
to inform their marketing strategies and enhance the overall customer experience. The ultimate goal of customer feedback is
to continuously improve products and services to meet the evolving needs of customers.
4.HOW THE BLOCKS DO WORK IN BLOCKCHAIN?
This technology utilizes cryptography and digital signature technology to provide authentication and access control for storing
and retrieving data, ensuring the security and integrity of stored data. The use of mathematical codes ensures that all nodes in
the network continuously validate transactions and record them in the ledger. During this process, transaction data such as
time, amount, and parties involved is collected and stored in blocks. Consensus is required among all nodes in the network to
confirm that a transaction occurred at a specific time and date before it can be recorded in the blockchain. As each block
contains a hash of the previous block, the transaction history can be verified by anyone at any time. Overall, this technology
provides a secure and transparent way to manage transactions and data, with built-in mechanisms to prevent corruption and
fraudulent activities. Once the transaction is completed, it is recorded in the blockchain network and can no longer be altered
or deleted. The transaction data is stored in a block, which is validated and added to the blockchain by a network of nodes
through a consensus mechanism. The data recorded in the block includes the transaction amount, time, and parties involved,
along with any additional information that may be relevant. Once the block is added to the blockchain, it becomes a permanent
part of the ledger, which can be accessed and verified by anyone with access to the network. This ensures that transactions are
secure, transparent, and tamper-proof, providing a reliable and efficient way to manage financial and other types of
transactions.
Fig 3. Mechanism of blockchain technology

4.The best algorithm and tools for a consumer-centric model
In blockchain depend on the specific requirements and use case of the system. However, here are some commonly
used algorithms and tools that can be used in a consumer-centric model:
1.identity Management: In a consumer-centric model, it's important to have a robust identity management system. The use
of algorithms such as Self Sovereign Identity (SSI) can allow users to control their own identity and personal data, providing
them with greater privacy and control over their personal information.
2.Reputation Systems: Reputation systems are used to build trust in decentralized systems. Algorithms such as Page Rank,
which is used in Google's search engine, can be used to create a reputation system that can be used to rank users or entities
based on their reputation in the system.
3.Consensus Algorithms: Consensus algorithms are used to ensure that all nodes in the network agree on the state of the
ledger. In a consumer-centric model, algorithms such as Proof of Stake (PoS) or Delegated Proof of Stake (DPoS) may be more
suitable as they require less computational power and energy consumption than Proof of Work (PoW) algorithms.
4.Smart Contracts: Smart contracts can be used to create automated processes in a consumer-centric model. For example, a
smart contract can be used to create a loyalty program where customers are rewarded for their loyalty.
5.Data Analytics: Data analytics tools can be used to gain insights into consumer behavior and preferences. These insights
can be used to create targeted marketing campaigns or to improve the user experience in a consumer-centric model. The
choice of algorithm and tools used in a consumer-centric model depends on the specific requirements of the system and the
use case. A combination of tools and algorithms may be used to ensure the security, privacy, and efficiency of the system while
providing a better user experience for consumers.
5. PROBLEM IDENTIFICATION
Blockchain technology, although highly promising, has several limitations that affect its adoption and
suitability for digital marketing. Two significant challenges faced by companies interested in using blockchain technology for
their digital marketing needs are limited scalability and lack of standardization.
Firstly, blockchain technology has limited scalability, which means it may not be able to handle the large volumes of
transactions required for digital marketing. Blockchains operate through a decentralized network of nodes that validate
transactions and record them on a distributed ledger. However, the more transactions that are processed, the more the
network becomes congested, and the slower the processing speed becomes. This issue can make it challenging for companies
that need to process a high volume of transactions quickly, such as those involved in digital marketing.
Secondly, the lack of standardization in the blockchain industry can make it difficult for companies to choose the right
blockchain solution for their digital marketing needs. There are many different blockchain platforms available, each with its
own unique features and capabilities. This can lead to fragmentation and inefficiencies in the industry, as companies may not
be able to communicate or exchange data effectively between different blockchains.
6. Proposed System
Using a consumer-centric model can be a useful approach to address scalability and standardization
problems related to blockchain technology in digital marketing.
Scalability: One way to address scalability is to create a consumer-centric model that encourages users to participate in the
blockchain network. This can be achieved by providing incentives such as loyalty programs, discounts, or other rewards for
users who participate in the network. By incentivizing users to participate in the network, companies can increase the number
of nodes on the blockchain, which can improve scalability.
Standardization: A consumer-centric model can also be used to address the lack of standardization in the blockchain industry.
By creating consumer-centric standards, companies can develop common language and practices that are easily

understandable and accessible to consumers. This can lead to greater adoption of blockchain technology by consumers, which
in turn can drive greater standardization in the industry. In add-on to a consumer-centric model, other solutions to address
scalability and standardization problems may include industry collaboration, the development of interoperability protocols,
and the use of open-source solutions. By working together, companies and stakeholders can develop solutions that are
scalable, standardized, and accessible to a broader range of users. This can help to increase adoption and drive greater
innovation in the blockchain industry. When it comes to implementing a consumer-centric model using blockchain technology,
there are several structures and algorithms that can help address the scalability and standardization challenges.
One potential solution is to use off-chain solutions, such as state channels or side chains, which allow for faster and cheaper
transactions. These solutions can be particularly useful in a consumer-centric model where quick and low-cost transactions
are essential to providing a seamless user experience.
Another approach is to use a consensus mechanism that prioritizes user participation and engagement. For example, proof-of-
stake (PoS) consensus mechanisms, such as those used in Ethereum 2.0 and Cardano, rely on user participation to secure the
network, which can help promote a more decentralized and user-centric model.
Regarding standardization, companies can use existing blockchain platforms that are designed with interoperability in mind.
For example, Hyperledger Fabric is an open-source blockchain platform that provides a modular architecture, allowing users
to customize and integrate various components to suit their specific needs. It also provides interoperability with other
blockchain networks, which can be useful in a consumer-centric model where cross-platform communication is essential.
6.1Blockchain Technology: Diverse Applications in Organizations Worldwide from 2021 to 2023
Blockchain technology use cases in organizations worldwide as of 2021-2023.Supply Chain Management: Blockchain
technology continues to be widely used in supply chain management to improve transparency and traceability. It enables
companies to track products from their origin to their destination, ensuring they have not been tampered with during transit.
For instance, Walmart has implemented a blockchain-based supply chain management system that tracks the movement of
food products to ensure food safety.
Chart-1 : Blockchain Diverse Applications in Organizations Worldwide from 2021 to 2023

Financial Services: Blockchain technology is still being adopted in the financial services industry, particularly for cross-border
payments and remittances. It offers faster, cheaper, and more secure transactions compared to traditional methods. JPMorgan
Chase has developed its blockchain-based platform, Onyx, to facilitate the settlement of securities transactions.
Identity Management: Blockchain technology is increasingly being used in identity management to prevent identity theft and
fraud. It allows users to manage their identity information securely and efficiently. IBM is developing a blockchain-based
platform called Trust Your Supplier, which enables businesses to manage their supplier information securely.
Real Estate: Blockchain technology is being used in the real estate industry to streamline the buying and selling process,
reducing the need for intermediaries and increasing transparency. Propy continues to offer a blockchain-based platform that
allows users to buy and sell real estate using smart contracts.
Voting: Blockchain technology is increasingly being used in voting systems to ensure transparency and prevent election fraud.
It enables voters to cast their votes securely and anonymously, making it difficult for anyone to manipulate the results. For
example, the city of Moscow has implemented a blockchain-based voting system that allows residents to vote in local elections.
Conclusion
Blockchain technology has the potential to revolutionize the consumer-centric model in digital marketing. By leveraging the
fundamental principles and mechanics of blockchain, businesses can enhance customer engagement, reduce fraud, increase
transparency, and foster trust and loyalty. The benefits of blockchain technology in digital marketing are significant. It enables
customers to have more control over their data, allowing for personalized and targeted marketing strategies that enhance
customer satisfaction. The transparency and immutability of blockchain help prevent fraudulent activities, such as fake
reviews and identity theft, improving the integrity of digital marketing interactions. Blockchain's decentralized nature and
smart contracts ensure transparency, accountability, and fair interactions between businesses and consumers, leading to trust
and long-term customer relationships. However, implementing blockchain in the consumer-centric model also presents
challenges and limitations. Scalability issues and regulatory considerations need to be addressed to fully realize the potential
of blockchain technology. Solutions such as sharing, off-chain protocols, and frameworks for navigating legal implications are
being explored to overcome these challenges. Inclusive, blockchain technology holds great promise for the future of digital
marketing. It has the potential to enhance customer experiences, increase security, and foster trust in the consumer-centric
model. As the technology continues to evolve, further research and exploration are needed to fully understand its implications
and optimize its implementation in the digital marketing landscape. By embracing blockchain, businesses can create a more
transparent, secure, and customer-centric digital marketing ecosystem.
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