I think that the world is suffering from cryptomania where everyone is talking about cryptocurrency and blockchain technology. It is a storm that has affected every business niche but for good. Every day we get to hear some new developments in this field, whether it is about aiding the startups via ICO or streamlining the business process by enhancing the tracking and tracing, blockchain finds application in all the domains.
The blockchain is still evolving, and we have a lot to explore. It won’t be wrong to claim that we are sitting on the tip of the iceberg where a massive chunk remains hidden. Blockchain in affiliate marketing is yet another unexplored area which is receiving attention from the researchers and developers.
Did you know that more than 80% of the online publishers and brands make use of affiliate marketing, yet it accounts for only 5% of the spend on digital marketing? Like all other industries, affiliate marketing also relies on intermediaries. But, now we have the surge of new platforms which are based on blockchain and are culminating the need for intermediaries and thus creating a robust, transparent platform which is free from intermediaries.
What is Affiliate Marketing?
Before heading further, it is essential to understand what is affiliate marketing and why it is necessary? In simple words, affiliate marketing is the way in which companies promote their products and services online. In an era where the internet has penetrated globally, and we are working on 4G and 5G network, affiliate marketing becomes an essential aspect for business promotion. The publisher puts a link on their website, whenever the customer clicks on the link of purchases the product, the publisher gets a commission on the sale. You would have often seen pop-up windows and ad banners present on the website. All these are part of affiliate marketing.
Well, if it’s a win-win situation then what is the problem area and why do we need a change in the current system. Let’s analyse the problem areas or area of concern:
Tracking of the leads – How much traffic, you are getting from your digital partners.
Transparency issues– The network is not making the payment to the affiliates although the client is sending the payment.
Tracking of conversion– How many leads are converted from a particular channel.
So basically we have three significant areas of concern when it comes to the current affiliate marketing system, transparency, tracking, and payment. If all these issues get resolved, the affiliate marketing system can become more productive and profitable.
What role will blockchain technology play in this?
It would not be wrong to say that blockchain technology is being looked upon as a panacea for all the problems. It’s an elixir that will resolve all the issues. Although it’s too early to make such claims, for now, it looks like the probable solution.
Blochain is a digital distributed ledger which stores all the information in chronological order. You can easily trace it and track all the changes thus making it easy for people in the network to determine all the changes and also helps in validation.
Let’s see how blockchain resolves the queries:
Here I will be highlighting how blockchain can solve some of the significant issues of affiliate marketing:
Transparency– As mentioned above transparency is the biggest concern in affiliate marketing. With the help of this technology, you can track every transaction and show the records to everyone. BAT or BASIC ATTENTION TOKEN, it measures the attention publishers or brand gets from the customer and pays them back in transferable tokens. The only drawback is that you need to use browser Brave for the same.
Speed– Another major problem which the affiliate marketers face is the speed issue. It takes weeks or sometimes months for the affiliates to get paid. There is also the problem of minimum payment threshold With the help of blockchain we can automate the payment system. It allows payment to be made in real-time. You can schedule the payment and put in the conditions for the amount to be paid via smart contract. Once the work is done, the smart contract initiates the payment. Hoqu and RefToken which are blockchain based platform create smart contracts. These smart contracts are automatically generated when there is a lead or sale.
Under-reporting – It is one of the significant problem of affiliate marketing, many publishers complaining that their sales are not reported accurately which further affects their payments. Well, here blockchain can come as a solution, it provides permanent payment record of transactions. Moreover, every information is present on blockchain is readily visible to everyone in the network. Any kind of change or alteration is also easily detectable. Thus, in case of any fraud or misrepresentation, the publishers can easily track it and claim it. Hence, reducing the chances of under-reporting or no—Here we have seen how blockchain has evolved as a system for change; it is the driver for new beginners which will create a transparent and secured system. Moreover, with the decentralisation, immutability features, it becomes effortless for everyone in the network to be aware of the changes and track them as and when required.
It is too early to say that blockchain is a sure solution for everything, but for now, we can say that blockchain holds a promising future which will streamline business process, enhance transparency and at the same time it will create a system where everyone in the network can reap the benefits.