The global advertising industry was valued at $534B in 2017 and the number is set to jump to $557.99B this year. In the global advertising industry, digital advertising is gradually crowding out all other forms of advertisements as people begin to spend more time on digital devices across all its different form factors. Interestingly, affiliate marketing is one of the biggest drivers of the global ads industry. Researchers posit that the Affiliate Marketing market is worth an estimated $13B this year as the size of the online marketing continues the track to be worth $260B.
However, the current set up of the affiliate marketing industry is not exactly favorable to advertisers, publishers who display the ads, and the end users that make decisions based on the ads. The frustrating flowchart of the current affiliate marketing industry is particularly perplexing because the so-called affiliate networks are adding an unnecessary layer of complexity to the advertising process.
Here’s the statement of the problem
In an ideal affiliate marketing set up, a merchant places an ad about a product/service on the website of a publisher. If someone clicks on the ad and goes on to purchase the product, the publisher gets a commission from the sale – pay per click. However, the current setup doesn’t allow the merchant and the publisher to interact directly – they must go through intermediaries known as affiliate networks. The affiliate network adds some mystery to the ads-sales process and they get a cut out of sales commission.
The centralized and opaque nature of affiliate network make it difficult to track and attribute ads and clicks in relation to sales – maybe the buyer uses multiple devices before deciding to buy. Affiliate networks also charges network fees averaging 10-25% of total commissions – these fees can go all way to 45% in some instances. The current set up is also frustrating because the payment process is slow and complicated – the publishers need to wait for the merchant to first pay the affiliate network, and then wait for the affiliate network to pay them – sometimes, merchants don’t get paid until many months have elapsed after the sale.
The more challenging part of the current setup of the affiliate marketing industry is that publishers and merchants don’t get to interact; hence, they miss opportunities to unlock strategic synergies. Publishers and merchants can create mutually beneficial relationships if they are able to collaborate on layouts that will optimize ads placements for increased conversion.
Here’s how blockchain is fixing the affiliate marketing industry
Blockchain technology is a decentralized global network on computers on which records are cryptographically encrypted in blocks to ensure that they can’t be retroactively altered without altering the following blocks and getting the consensus of the network. Attrace is a blockchain project that wants to provide a purely decentralized platform to ATtribute and TRACE every individual click in affiliate marketing irrespective of whether it leads to a sale or not.
Attrace is the first completely decentralized affiliate marketing platform with a blockchain protocol built entirely from the ground up. Attrace is designed to aid the registration and auditing of ad clicks in an immutable data trail that delivers an unprecedented level of transparency in the ads industry.
The key selling points of Attrace’s value proposition is that the peer-to-peer interactions that it fosters between merchants and publishers can significantly reduce the sky-high fees that Affiliate Networks charge by as much as 95%. Attrace could also eliminate fraud detection headaches that accompany the current inability to attribute clicks. The decentralized nature of Attrace’s platform also makes it easy to provide inclusion for merchants in niche markets and emerging markets – these merchants are usually ignored by affiliate networks in the current setup.
The best part is that Attrace is opting to take the slightly longer route of building its own blockchain from the ground up instead of relying on existing blockchain networks. The firm submits that current networks might not be able to process the transaction loads of 500 to 2000 transactions per second that it envisages. More so, Attrace doesn’t want to subject itself to unnecessary third-party operational risk.
Other players in the blockchain affiliate market space
Mainstream digital media platforms are being cautious about advertising cryptocurrency and ICO related projects. In fact, Google’s ban on ICO and crypto ads will become effective this month as the company clamps down on activities “including but not limited to initial coin offerings (ICO), cryptocurrency exchanges, cryptocurrency wallets, and cryptocurrency trading advice.”
AFFILICHAIN is coming to the market with an innovative ICO marketing tracking solution that will help the blockchain industry advertise in much the same way that traditional companies market their products and services. With AFFILICHAIN, merchants can promote blockchain projects and pay for results only. Affiliates also get to convert their traffic into revenue through multiple offers such as cost-per-sale, cost-per-lead, and cost-per-acquisition. However, AFFILICHAIN is not a core blockchain product; rather, it is a marketing solution for the blockchain industry.
Tokentarget is another interesting blockchain marketing solution on a mission to help blockchain projects succeed in a market filled with fear, uncertainty, and doubt. The firm believes that leveraging branding and marcoms across channels to create targeted exposure can yield valuable analytics that can be exploited to discover and optimize results.