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Blockchain Technology and Affiliate Marketing

Life happens and things can get messy, which is where blockchain technology steps in to save the day (and the team). Because of its unique features, blockchain can become an essential player in the affiliate marketing industry.

The Definition of Blockchain

In summary, blockchain is a form of transactions that are decentralized (doesn’t belong to any particular company), transparent (anyone can find transaction data) and permanent (see image below) It uses different types of currencies, and Bitcoin is just one of them. Some other examples include VeChain, used for protecting the legitimacy of luxury items (think Louis Vuitton), KuCoin for improving Artificial Intelligence transactions via DeepBrainChain, and others.

How does blockchain work?

 

Blockchain and Affiliate Marketing

Think of the biggest issues affiliate programs encounter:

  1. How much traffic are you actually getting from your digital partners?
  2. My networks are not paying my affiliates, even though I sent them the payments.
  3. Are my networks tracking my conversions correctly?

Life happens and things can get messy, which is where blockchain technology steps in to save the day (and the team). Because of its unique features, blockchain can become an essential player in the affiliate marketing industry.

    1. Transparency

Transparency is a big issue in the affiliate marketing industry, especially when there are so many middlemen in the publisher – brand relationship. Networks, Ad managers, Search engines, they all take the cut. Not only does this abundance of services take a cut (the 10 leading ad-selling companies accounted for 73% of total revenues in Q4 2016, according to Business Insider) , there are also issues of fraud, unguaranteed agreements, and a generally vague idea of what publishers are paying the networks for in terms of numbers.

Remember that blockchain technology takes track of every transaction and shows undisputed records to everyone involved. The Basic Attention Token (BAT), for instance, measures the attention publishers and brands get from users, and pays them in transferrable tokens according to those numbers. The downside of this is all three parties have to use a browser called Brave. It was built with digital advertising in mind and has relevant features like ad blockers, faster loading time (because the ads are gone…) and protects everyone’s privacy.

     2. Finding the real leads

When a publisher sends its readers to make a purchase on the advertiser’s website – aka converts them – this information gets tracked and used to pay the publishers accordingly. Unfortunately, issues of fraud are too common. No matter whose side this happens on (the advertisers’, publishers’, or networks’), it is important to record all incoming leads and conversions in order to reward all parties honestly. With Blockchain technology records, transparency will be a given. Every conversion would be tracked on a 3rd party ledger and everyone would be able to access it to check the legitimacy of transactions.

    3. Guaranteed Payments

Needless to say, transparency significantly increases the guarantee that payments were processed. In addition to that, there are services that literally guarantee that the payment and service are exchanged simultaneously and thus satisfied the parties’ agreement. Take Smart Contracts, for instance. Smart Contracts are self-executing contractual chains, stored on the blockchain (ChainLink). “By providing smart contracts secure access to these key resources, ChainLink allows them to mimic real world agreements that require external proof of performance and need to make payment in widely available payment methods e.g. bank payments.”

That being said, it will take some time before blockchain technology becomes widely accepted form of transactions in affiliate marketing. We see it entering the industry already, via decentralized affiliate channels like RefToken and Affchain. We have high hopes for what they bring to the affiliate market.

More info about Blockchain and affiliate marketing:

Understand the Blockchain in under two minutes

The Basics of Blockchain Technology, explained in Plain English

The Future of Blockchain Technology

The Blockchain and Affiliate Marketing Revolution Begins

So, What’s Wrong with the Affiliate Marketing Industry?