Why Affiliate Marketing is Betting on Blockchain Technology

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Blockchain technology has a promising future, the growth of cryptocurrency is incredible, startups in the technology are raising millions of dollars in ICO (Initial coin offering) and the hype around blockchain is everywhere now. However, when we see a new record price for Bitcoin, we usually forget what is at the heart of the technology.

blockchain
blockchain

The blockchain is the future

The term blockchain does not just refer to cryptocurrencies. The essence of this technology lies in a fundamentally different approach to data processing. The speed of data processing, the high level of protection and open access to the system give us the right to say that the cryptocurrency ecosystem is the future.

The blockchain ecosystem can function as a sustainable project in any field, while the role of cryptocurrency in this field is strictly designed out of the technology. For this reason, more and more institutional players believe that blockchain will optimize their current systems. Ethereum, another blockchain-based platform, will replace institutions like Visa and SWIFT. One thing is already clear: Blockchain will change many industries.

Affiliate Marketing and blockchain technology

But what will happen to affiliate marketing in the age of cryptocurrency? Right now, there are three main players in affiliate marketing: advertisers, publishers, and the affiliate network. Advertisers need Internet traffic and work on the CPA (cost per action) model. The CPA model means that advertisers do not just pay for clicks, but for a predetermined action, such as a sale or registration. Publishers get traffic on the Internet and monetize it by receiving their CPA commission. Affiliate networks facilitate the interaction between advertisers and publishers and provide integration between their platforms.

A new player that has already carved a large niche in the market is the tracker. Of course, trackers cannot offer advertisers all the services of a CPA network. But they save advertisers money by not requiring payment to the network, and at the same time trackers perform their main function of tracking actions. However, most CPA networks engage advertisers through trackers rather than directly.

However, trackers are not a magic pill for the market. They can only track information about an action in the system and then correct it. But they cannot allow advertisers to find new affiliates for a campaign. This important function is usually performed by the advertiser’s team, whose human and time resources are limited.

There is also a fundamental problem in the relationship between the participants that becomes a dilemma when advertisers want to make payments to their publishers from corporate bank accounts and publishers prefer to receive payments in cryptocurrency. This creates problems and additional costs for all participants in the ecosystem.

With these facts in mind, it is very interesting to understand why the blockchain integrates seamlessly and creates an ideal business environment around CPA marketing. Basically, all market participants need a decentralized platform where advertisers can coexist with publishers and trackers. A kind of decentralized marketplace where each advertiser can connect to the system, choose a tracker to control all actions performed, and the publisher who can start his work directly with the advertiser, without mediation of the CPA network, without fear of fraud by the network and be sure to receive the money earned in any case and that all the financial conditions between the parties are guaranteed by a smart contract based on a blockchain.

Huge Savings

For its part, the advertiser will not overpay as a revenue grows, since the marketplace will initially receive a fixed payment for access to the platform, unlike the classic model where the CPA network earns a percentage of the advertiser’s revenue. In addition, all payments within the ecosystem will be made in internal cryptocurrency, using tokens. The benefits of using cryptocurrency in all financial transactions between all market participants are obvious. It will offset the losses of publishers and advertisers through financial transactions and reduce financial risks for both parties.

Ownership of the tokens in the decentralized system will allow them to be used as a means of payment, as well as stock in value, since as the ecosystem itself grows, the value of this cryptocurrency will increase relative to the other cryptocurrencies, and therefore relative to traditional currencies. The entire market is not yet ready to move all payments to cryptocurrency, but it is certain that the affiliate marketing market is turning to blockchain.

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