Attrace is a Dutch blockchain start-up that works on the first fully decentralized affiliate marketing platform. By combining affiliate marketing with the advantages of blockchain technology, the company aims to realize a completely transparent, safer and more lucrative way of marketing. What does affiliate marketing mean, what are the current stumbling blocks and how does Attrace strive to provide a solution? The article below discusses the world of affiliate marketing and Attrace’s mission to change this market.
Companies are constantly looking for interaction with customers. Even before the advent of the digital age, it was crucial to advertise and gain brand awareness. Where this used to be done through signboards, television, printed promotional material and word-of-mouth advertising, a company today keeps its name mainly online. Companies pay big money for online advertisements. According to a report of Statista, an online portal for statistics, market research and business intelligence, American companies will reserve $ 218 billion this year for online advertising purposes and that amount will grow by 20% in the coming years. The experience and the accompanying statistics teach us that advertising is ‘big business’.
What is the most lucrative way to advertise online is highly dependent on the context of the sales market. You could roughly divide online advertisements into three categories: if a website places an advertisement from an advertiser, it can be paid per view, per ‘click’ (on the advertisement) or per sale (as a result of click on the advertisement). Paying per sale is called in the world of marketing ‘affiliate marketing’.
In affiliate marketing, a company (eg an energy supplier) advertises on another online platform (for example, a comparison website for energy suppliers). Here, by the company behind the advertisement (the energy supplier), commission is paid to the advertising platform (comparison website for energy suppliers), but only when a click on the relevant advertisement has ensured an actual purchase. Large companies do a lot of affiliate marketing, but also Youtube vloggers and Instagram influencers do the same form of marketing by selling products and services. When a vlogger recommends a product and instructs its followers to click on a specific hyperlink to purchase the product, then this is most likely an ‘affiliate link’. This link keeps track of whether the product is actually purchased and if this is the case, the vlogger receives a fee for the completed sale.
Nice system, but still it has some imperfections. The big problem is that the publishers and advertisers are not directly connected to each other. There is a third party as ‘middleman’ – the affiliate network – that is in between. This intermediary traces and registers all clicks of the publishers and arranges all payments from the advertiser to the publishers in case of a successful purchase. There are always questions about the registration and reporting of the clicks and the speed of payments. In addition, the intermediary himself draws a percentage of the commissions paid by the advertiser.
Attrace, with an office on the Amsterdam Keizersgracht, tackles the above-mentioned problems by combining the world of affiliate marketing with that of blockchain technology; the same technology that made many news channels by Bitcoin .
Attrace is building the first fully decentralized affiliate marketing platform, which brings together publishers and advertisers and can therefore do business directly without the intervention of a mediating third party.
On the platform, which runs on a completely custom-made blockchain, advertisements can be registered and audited. This ensures that all processes concerning the advertisements run safely, transparently and efficiently.
The Attrace blockchain guarantees correct tracking and allocation of all clicks to the right publisher – regardless of whether this results in a sale or not – and, if desired, also provides full transparency about the claimed sales and conversions with the advertiser. This principle makes an intermediary superfluous. Attrace contributes to improved tracking by increasing transparency and also adds extra value.
By removing the middleman in the process, for example, the costs of the service are also much lower. In the regular market for affiliate marketing, third parties receive commission and other fees, which Attrace claims can be reduced by 95%. Traditional affiliate networks work with 10% to 25% commission. The Attrace platform can reduce this to 0.5%. For example, in the Attrace blockchain, additional ‘incentives’ can also be implemented – based on reputation – allowing the advertising parties to pay their commission to the publishers more quickly. With current networks, this can sometimes take months. Another advantage is the removal of the ‘entry barriers’ for advertisers. Now it is true that as an advertiser you can only work with affiliate marketing if you guarantee a minimum number of sales or commission payments. In Attrace, only reputation statistics are important and in principle every advertiser has access to affiliate marketing. Attrace could therefore also ensure that affiliate marketing as an online marketing concept will increase.
Attrace has, through the combination of affiliate marketing and blockchain, developed an ingenious system to improve and perhaps increase the affiliate marketing industry. By eliminating a third party, the Dutch start-up offers a fully transparent and much more cost-effective platform for both companies and advertisers. Attrace launches its ICO on 1 August and has planned the launch of its operational network before 1 December. In 2019 Attrace hopes to become the new standard in the affiliate marketing industry.