How Blockchain Will Improve the Affiliate Marketing Industry
How Blockchain Will Improve the Affiliate Marketing Industry

How Blockchain Will Improve the Affiliate Marketing Industry

Running successful affiliate marketing campaigns today is no joke. For one, the competition is stiff. You have to overcome several hurdles and challenges to execute them effectively.

But in a world with a solution for almost everything (even your aspirations of travelling to space) — finding one to make all your affiliate marketing campaigns work for you is not a small feat.

Worry not, because things may finally be looking up for you. There is now a solution, after all.

It is no surprise that blockchain technology is all the rage right now since it is the underlying technology behind cryptocurrencies.

But trust me, once you understand the technology well, you will realize that blockchain does much more than help you start crypto trading.

However, before going into that, let us start by understanding what blockchain technology is all about.

Understanding Blockchain Technology

While the world is going gaga about cryptocurrencies, very few can gauge the power of blockchain technology. To those who do, it is apparent that it is here to stay and change the way businesses work — regardless of the industry.

For starters, more than 74% of executive teams that are tech-savvy believe that blockchain technology can transform the business world.

Blockchain is a decentralized ledger using which you can perform and store transactions completely, transparently and permanently.

These transactions are stored in blocks, chained together in a network. Each block is cryptographically secured, and any update or modification in one of the blocks will alert every participant on the network.

This definition immediately makes you wonder if it is just another digital “payment” revolution, right? Well, it is so much more.

If you isolate the key terms in this definition, you will immediately realize that they relate to many other business aspects. Your marketing department is no exception.


Let us look at how blockchain can transform your marketing strategy and processes.

Blockchain Technology and Affiliate Marketing

As an affiliate marketer, you will often find yourself nursing the brunt of a complicated campaign that did not generate expected results. Plus, ad spends go out of control now and then, don’t they?

Sure they do unless you are smart enough to start leveraging blockchain technology.

Many of you indeed made the association right away. Accepting crypto payments can make managing payments much more effortless.

But if you are smart enough to take it a notch further with smart contracts, you can ensure complete transparency and vendor management efficiency.

Interesting, right? But more on this later.

First, let us look at the many loopholes that currently challenge brands that use affiliate marketing.

The Main Affiliate Marketing Loopholes

The success of affiliate marketing depends significantly on establishing trust.

But the process of doing that is long and seldom leads to real success. While affiliate marketing gets many things right, even its biggest fans would admit it has loopholes.

Here are two of the most significant loopholes that affiliate marketing has to deal with currently.

1. Attribution Between Traffic and Sources

For growing brands, paid traffic is vital in amplifying their growth and visibility. One of the most prominent challenges for any affiliate marketer is the complicated process of attributing any increase in website traffic to the proper sources.

When your brand works with multiple affiliates, you may need a detailed report on who contributes and how much to increase your reach.

Now, there are many software solutions and tools that can help you keep track of these sources. Some prominent names include Attribution, Branch, and Active Campaign.

However, navigating this aspect is still daunting, and marketers constantly look for a more efficient way to solve this challenge. Add to this mix the ever-looming challenge of click-hijacking.

Many brands are victims of coupon or rebate sites that customers are likely to visit at the end of their buying journey before making a purchase. This causes the brand’s cookies to be replaced by the other websites, making attribution even more complicated.

2. Payment Frauds

As an affiliate marketing manager, you will try your best to develop effective strategies and implement them. But even then, you may be in a tough tussle with an affiliate who promised a lot and did not deliver.

Or maybe you are an affiliate who is just not getting proper responses from the advertiser after delivering the promised work.

Regardless of which of these two brackets you fall into, fraudulent payments can prove disheartening and cause losses. Whether you are an advertiser or affiliate, payment frauds are more common than you think.

Of course, there are measures that you can take to prevent such fraudulent transactions. However, the most effective tool to battle this challenge is to create airtight contracts that can safeguard you from dealing with fraudulent parties and situations.

Further reading: Best 9 Payment Solutions for Affiliate Marketers [Reviews & Guide]

3. Communication Issues

Ironically, one of the significant challenges plaguing the media and communication strategies in businesses is communication breakdowns.

Communication is the essential element in an advertiser-affiliate association. Ensuring accessibility and reliability in communication is quite crucial to the success of any affiliate marketing campaign.

Yet, communication gaps are pretty common in affiliate marketing programs. Maintaining regular communication with affiliates will enable you to relay important information seamlessly.

Brands today also significantly educate their affiliates on product updates, how-tos, and upcoming sales to leverage those opportunities.

Besides these significant challenges, advertisers come across inaccurate traffic data, fraudulent sources, cookie stuffing, and click spamming.

With these ever-evolving challenges and loopholes, affiliate marketers can use a reliable solution to make the entire process much more effective.

Enter Blockchain technology.

Implications of Blockchain for Affiliate Marketing

By now, you would have a good idea of the various challenges and loopholes that impact the effectiveness of affiliate marketing programs today.

Let us now look at blockchain technology’s implications on affiliate marketing and its role n overcoming the said challenges.

Smart Contracts

With the concept of smart contracts, blockchain goes from being a simple digital ledger to an important utility tool for businesses. Smart contracts are created with the help of a computer network that uses consensus protocols to get the parties to agree upon the terms and conditions.

Once created, a smart contract is executed automatically without any risk of error or manipulation. Now think about the implications that these smart contracts can have in the world of affiliate marketing.

Ultimately enforceable and tamper-proof record of a contract signed between advertisers and affiliates, powered by blockchain technology.

Better Transparency

When we talk about contracts or affiliate-advertiser relationships, one of the pain points that everyone immediately mentions is the lack of transparency in the processes.

More often than not, at least one or, in some cases, several middlemen are involved in affiliate marketing campaigns. This may be a talent agency or manager who charges a commission upon successful association. While this seems like a perfectly normal process, this often leads to fraud or communication challenges. Not saying it will happen, but it does happen.

After all, 2% of all affiliate transactions are attributed to affiliate fraud.

With blockchain technology, there is complete clarity between all the parties involved about the payment terms and other conditions related to the association. Even if there is a single tampering attempt from any party, the entire network gets alerted, thus establishing complete transparency.

Fraud Reduction

Due to some of the reasons we have already discussed and the involvement of unexpected malicious parties, payment fraud has become widespread in affiliate marketing programs.

While some significant companies take risks and bear the losses, smaller companies or inexperienced affiliates end up suffering. Right from faking the attribution data to blatantly defaulting on payments, there are many ways in which fraudulent transactions can derail your campaigns.

In such cases, blockchain can be a great boon and help you implement a payment network that is completely secure and transparent.

Direct Communication

Communication is essentially the essential ingredient in any marketing campaign.

But affiliate marketing campaigns are often riddled with communication gaps and issues that even result in losses.

Using blockchain, you can ensure that the essential information related to the campaign, and contractual terms and conditions, are already effectively relayed to all the parties.

Effective communication will ensure that your affiliates are entirely aware of pertinent information and are encouraged to promote your product or campaign.

Shorter Payment Cycles

It is impossible to talk about blockchain’s various benefits without mentioning cryptocurrencies. When you prepare to leverage blockchain for your business completely, you should also look into enabling crypto payments.

In almost all industries and verticals today, cryptocurrencies such as Bitcoin, Ethereum, and Ripple are widely accepted.

Accepting payments in cryptocurrencies has multiple advantages, whether you are an affiliate or an advertiser.

Cryptocurrency payments take place across the globe within moments, so having a cross-border association is no more complicated.

Such shorter payment cycles are preferable for affiliates, who do not have to wait weeks or months to receive their remuneration. At the same time, advertisers would have a permanent, unalterable record of payments eliminating the possibility of possible fraudulent transactions.

Better Market Access

By now, you already know that blockchain holds the potential to completely replace traditional contracts and agreements with the help of smart contracts.

Many predict that with such a reliable mechanism, smart contracts will also aid in breaking the current hub-and-spoke model followed by most affiliate marketing campaigns.

Affiliates and advertisers will have better access to each other and, simultaneously, in a frictionless and secure network with the help of blockchain.

This fluidity will also likely give rise to more bilateral and non-traditional relationships.

However, vendors must keep improving to stay competitive vendors must keep improving to remain competitive and survive in this new and refined process.

Wrapping Up

As an affiliate marketer or an advertiser, there are many considerations that you need to keep in mind while coming up with campaigns. Apart from getting the strategy and approach right, you should not have to worry about other trivial aspects of the transaction.

However, that is seldom the case. Challenges such as the inability to attribute traffic to the right sources and payment fraud still exist and cause several issues.

In such cases, blockchain can be the one solution to ensure that none of these affiliate marketing loopholes affects the performance of your campaign.

About Virginia Andrus

Author bio: Virginia Andrus is an independent Digital Marketing Consultant with 6+ years of marketing experience. Virginia is a chef by heart. In her free time, she is either writing marketing copies for brands and agencies or experimenting with new recipes at her home. Connect with her on Twitter: @andrus_virginia.

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