Blockchain Solves Affiliate Marketing Pain Points — Here’s How.
Affiliate marketing is big business. And it’s growing - Fast.
Projected to reach dizzying heights of $6.8 billion by 2020, businesses across multiple industries are realising the power of affiliate marketing to grow their revenue online.
In fact, over 90% of advertisers agree that affiliate programs are integral to their marketing strategy, over 80% of brands utilise affiliate marketing and 40% of marketing professionals say it’s the most desirable digital skill for new hires.
Despite this, 78% of CMOs also agree that affiliate marketing is their least mastered skill — and it’s no wonder. The affiliate industry is plagued with pain points, many of which, under the current system, are impractical or just impossible to solve.
But a decentralised, trustless solution is lurking just around the corner —poised to relieve pressing problems which centralised incumbent platforms never could.
You might have heard of it already. It’s called Blockchain.
The Problem — Affiliate Marketing ‘Pain Points’
1. Affiliate Fraud & Merchant Skimming
Bad-behaviour comes from both affiliates and merchants — causing one of the most prevalent pain points in the affiliate marketing industry.
“To date, affiliate fraud has been a far-reaching, unfortunate consequence of affiliate marketing’s meteoric rise in popularity.”
Merchants and affiliates exist together in a land of trust, honesty, cohabitation and peace… Wouldn’t it be perfect if that was true? Unfortunately, although the majority of merchants and affiliates are honest actors, the few who aren’t spoil it for everyone. To date, affiliate fraud has been a far-reaching, unfortunate consequence of affiliate marketing’s meteoric rise in popularity.
In honest scenarios, affiliates are rewarded a commission for specified actions, such as a completed sale or sign-up. Fraudsters game the system, generating fake activity to gain commissions, or duplicating sales. More recent types of affiliate fraud have come to include cookie stuffing, cloning other affiliates’ content, using stolen data for lead generation, or stolen credit cards to generate sales.
When their number’s up, fraudulent affiliates poof! and disappear — knowing it’s often too costly for defrauded merchants to pursue them.
“Fraudsters game the system, generating fake activity to gain commissions, or duplicating sales.”
Likewise, some unscrupulous merchants get their hands dirty too.
In some cases, despite an affiliate honestly closing a lead or sale — and providing proof they have done so — the merchant may wrongly claim the transaction was ineligible for commission.
This practice, known as commission skimming, is usually impossible for affiliates to dispute, resulting in a loss of earnings for affiliates, and a significant saving for dishonest merchants.
2. Payment Delays
Affiliates capture their customers attention, close their deals, receive their commission… then wait upwards of 30 days to get paid — Doesn’t sound ideal, does it?
“For low margin, high volume operators, this can cause serious cash flow issues.”
Though not a problem for those in salaried marketing positions, affiliate marketers are usually self-employed. This means they rely on their affiliate commissions arriving in a timely manner. For low margin, high volume operators, this can cause serious cash flow issues.
3. Centralised Network Fees
Affiliate networks are integral to both merchants and affiliates. As a basic overview of their services, they provide transaction tracking software, affiliate and merchant recruitment, financial handling and more.
“Transaction fees, also called override amounts, are frequently charged at 20–30% of Affiliate commission.”
Of course, affiliate networks don’t do this from the kindness of their hearts.
Although fee structures vary significantly between networks, there’s a multitude of fees both merchants and affiliates should consider when using centralised networks. Transaction fees, also called override amounts, are frequently charged at 20–30% of affiliate commission.
Override amounts are the most common revenue stream for affiliate networks. However, networks may also charge for network access and establishment costs, minimum merchant deposit amounts (used to pay affiliates and fees), monthly licencing fees and even monthly minimums on override amounts.
It’s easy to see how these costs stack-up, eating away at affiliates earnings and merchants revenue.
The Blockchain Affiliate Revolution
Blockchain has the potential to revolutionise the way affiliates and merchants interact.
Unlike centralised platforms, smart contracts on the blockchain allow merchant and affiliate deals to be secured and ‘locked in’ — with funds released automatically once certain conditions have been satisfied. Affiliates and merchants can create these deals themselves, p2p, through a platform provider.
“Blockchain removes the ability for fraudsters to hide their nefarious transactions… ”
More importantly, using distributed ledger technology removes the need for trust between parties.
This may initially sound negative — shouldn’t affiliates and merchants trust each other?
However, with every transaction publicly and immutably stored on a distributed ledger for anyone to see, blockchain removes the ability for fraudsters to hide their nefarious transactions, whilst simultaneously making transactions between honest parties more efficient and secure.
The result? Affiliates who suspect merchants may be skimming commissions can track every conversion they’ve made; and vice versa merchants can track every affiliate lead they receive to ensure it’s legitimate.
Blockchain technology will also increase opportunities for affiliates who are just starting out and whose trustworthiness is not yet proven — with all transactions on an open distributed ledger, merchants don’t need to first build ‘trust’ with their affiliate network, as they can easily track their effectiveness and honesty.
With blockchain bringing significant and inevitable changes to the affiliate marketing industry, at RefToken we are at the forefront of the decentralised affiliate tracking revolution.
The RefToken Decentralised Affiliate Platform
With the launch of our ICO in late 2017, we established RefToken to disrupt the affiliate marketing industry, using state-of-the-art blockchain technology. Our expert team have decades of experience in affiliate marketing roles, both as operators and affiliates, understanding first hand the most prevalent issues in the affiliate marketing industry today.
Since our ICO concluded, our developers have been busy building the most intuitive and feature-rich affiliate marketing platform, with an integrated ICO platform and token-sale payment gateway, to alleviate affiliate and merchant pain points.
“RefToken have created an immutable audit trail of all revenue and conversion data stored on the blockchain — allowing brands to audit and identify fraudulent affiliates.”
At RefToken, our ICO platform is offered as part of our award-winning sister brand ICO Launch Malta, offering ICO startups a full stack solution to launch their ICO. Our platform features RefToken affiliate tracking out of the box to track affiliates and bounty hunters marketing their ICO — resulting in a huge user base already poised to use the RefToken platform.
Now, with our BETA platform scheduled to go live at the end of January, we have big plans for 2019.
Built as an ERC20 token on the Ethereum blockchain, RefToken aims to be a disruptive force to affiliate marketing. Our native token — REF, is used to pay fees on the platform, reward affiliates, and pay bounty hunters.
Because of our decentralised approach and self-executing contracts, we are able to offer access to our network at lower fees than our centralised counterparts. RefToken’s smart-contract tracking of affiliate conversions provides satisfaction of conversion events, eliminating conversion trigger disputes.
“Not only will RefToken’s platform track sales made through affiliates, we will also track the value of the sale or conversion, for instance if a transaction is worth $100 or $10.”
To combat the fraud issues we visited earlier, our RefToken developers have created an immutable audit trail of all revenue and conversion data stored on the blockchain — allowing brands to audit and identify fraudulent affiliates.
Likewise, affiliates will be pleased to hear that all commission payments they receive will be issued automatically and instantly on our platform, eliminating the cash-flow issues described above.
Unlike other decentralised affiliate platforms, at RefToken we have built-in ‘purchase value tracking’. Not only will RefToken’s platform track sales made through affiliates, we will also track the value of the sale or conversion, for instance if a transaction is worth $100 or $10.
What’s more, through our use of smart-contract technology, the RefToken platform will be able to track payments made in either ETH, BTC or Fiat, an integral feature for casino and gaming operators — of which the team here at RefToken have a wealth of experience.
Whilst other platforms are in development, such as Attrace, Hoqu and AdEx; we are currently the only platform which offers fullstack solutions for ICO Launch, dApp token sales, payment gateways, decentralised affiliate tracking, and purchase value tracking — making the RefToken platform the most promising decentralised affiliate platform to date.
Learn more about RefToken’s unique vision for decentralised affiliate marketing at — www.reftoken.io
