The Affiliate System
A blogger who
educates young mothers about baby care can decide to recommend favorite baby
care products and get paid for it by the brands being recommended. According
to a study by Extole, customers who are referred to a brand are up to five times
more likely to convert than customers who aren’t.
Even when this
marketing strategy is widely used and has a high success rate, it is not
without challenges. Many of the issues emanate from centralization, where
brands and content publishers have to go through third parties to interact. A
typical affiliate marketing model includes at least four parties, namely the
merchant, the affiliate network, search engines and the content publisher.
networks act as an intermediary between the merchant and the content
publisher by bringing them together, tracking link clicks and conversions and
facilitating payments. Simply put, the merchant pays the affiliate network to
identify and engage content publishers, track their performance and make
payments. This model is not only costly but ineffective, given that it depends
on the legitimacy and expertise of the affiliate network.
traditional affiliate marketing model, there is no clear way for merchants to
track how their money is being used by the affiliate network. It is not
uncommon to hear complaints about how merchants have paid affiliate networks
and the affiliate networks then underpay or refuse to pay content publishers.
instances, the affiliate networks choose to work with cheap but disreputable
content publishers, a thing that does more harm than good to the brands being
marketed. Additionally, most affiliate networks lack proper tools to track link
clicks and conversions, which means that many times they give inexact data to
The Blockchain Solution
Just like in
other industries, decentralization is one of the main solutions blockchain
technology is bringing to affiliate marketing. The technology seeks to make it
possible for merchants and content publishers to collaborate directly, tracking
link clicks and conversions
project known as Attrace, for instance, is
introducing a platform where merchants can directly engage content publishers
and track link clicks and conversions from them. This means that with the
Attrace platform, merchants can tell with certainty the contribution of a given
publisher toward marketing their products.
The project also
applies smart contracts to settle payments, meaning that content publishers are
only paid when they meet the predetermined objectives. Without the
intermediaries, the merchants are able to get maximum value for their money and
the content publishers get paid directly, with no added expenses from
blockchain project, known as RefToken, is underway with the same goal of bridging the gap
between merchants and affiliates. The best thing about this project is that it
will allow these parties to interact and rate each other. With the rating
system in place, each party will be motivated to offer the best effort to
maintain a good reputation.
technology continues to grow, there is no doubt that more solutions to the
digital marketing sector are yet to come that will change the face of marketing
and create a better user experience for all.