-
By
Erwin Werring
- 3 min read
By
Erwin Werring
Attrace is the first web3-native framework for referral marketing, providing a trustless referral layer for the entire blockchain ecosystem. Combining years of experience in the ‘traditional’ customer advocacy, the Attrace team is building out a much-needed solution to address the various gaps and inefficiencies that have bedevilled referral marketing since the advent of the internet. With Attrace, web3 projects can finally reach a wider audience and backers can earn rewards by spreading the word, securely and privately.
In this article, the Attrace team explains what they have developed and WHY. As you read through, you will quickly grasp the issues with web2 referral marketing and how critical missing infrastructure is holding its web3 successor back from reaching its full potential.
The global web2 advertising market is estimated to currently be worth roughly $455 billion per year, projected to grow rapidly to $655 billion by 2024. A considerable piece of that expanding pie is going to the performance-based referral part of advertising, which essentially is “pay per lead that actually converts into a sale”. It is the obvious preferred online marketing model for most advertisers (no cure, no pay) as well as promoters with good targeted traffic.
However, the structure of the web2 market has two fundamental shortcomings that, until addressed, will continue to hold back the development of the marketing subcategory: Centralization and Tracking.
It is no secret that most industries today are highly ‘centralised’, and referral marketing is no exception. In referral marketing’s case, such a structure brings with it a number of specific problems.
Firstly, there is the issue of centralised verification. Most businesses need to rely on a third party, a ‘middleman’, to manage their referral program. Whenever there is an intermediary there are always inherent risks, such as: Lack of transparency, fraud, data protection concerns, rising entry barriers, and added fees. As we are collectively becoming increasingly sensitive to potential mishaps in these risk areas, and with the associated fall-outs becoming more problematic, it is an absolute must that we correct for these deficiencies and inefficiencies.
When it comes to referral providers, having a client’s best interest in mind is hard to audit in practice. Indeed, a significant proportion of industry intermediaries knowingly or unknowingly make the process of adequately verifying conversions very arduous, leaving clients at the mercy of the very company they have trusted to do good by them.
Secondly, the current business environment is marked by a myriad of Data and Privacy mishaps. Having a centralized entity control all data inflows and outflows is risky: All it takes is a single point of failure for a large data spill to impact hundreds, if not thousands of clients and service providers. With a diminishing trust factor in existing solutions, correcting for data privacy issues becomes a pivotal role for a web3 response.
Lastly, industry veterans will be quick to notice an important issue we still haven’t mentioned — Reconciliation. Intermediaries take a large commission, usually between 15% to 45%, and pay-outs to promoters are often delayed, leaving referral partners in a real quandary, causing many to seek alternatives or switch to other options, such as Display advertising or Google ads.
Using decades-old technology results in churn, operational difficulty and suboptimal UX to both promoters and purchasers. Just check the current affiliate marketing UX flow in web2: Signing up (and hopefully being accepted!) with affiliate networks, disclosing all kinds of private data via their accounts, having to implement tracking links in websites, cookie tracking, fingerprinting implementation, and so on.
As the saying goes, your data your rights. In web2 referral marketing, this is very far from being ubiquitous as people’s data is being exchanged frequently, usually without transparency and/or explicit authority. The consequence of this reality is easy to see, with leaks making the headlines on a near daily basis somewhere in the world.
Cookies and tracking pixels were developed to track each of your online activities, with impressive accuracy and detail. However, as referral marketing evolves to web3, the tools that existed for web2 can no longer be utilized. With privacy, security and decentralization at the core of this new environment, marketers will need to look beyond their current toolbox and find the most technically sound and culturally appropriate solution. In other words, there is a need for a referral marketing solution for web3 that is based on the same core principles of web3, a referral marketing tool that works in a decentralised and trustless manner.
It would be natural to believe that all of the above issues would be addressed as web3 matures. However, much to our surprise, and likely yours as well, that confidence is mis-placed — those issues are still very much lingering and remain unsolved in the world of crypto.
And that is why Attrace has been developed.
Given the current state of referral marketing and the lack of a viable solution for its woes in web3, the Attrace team undertook a fundamental, drains-up technical, methodological and philosophical overhaul to successfully transition referral marketing from web2 to web3.
To summarise, there is currently no web3-native trustless referral marketing solution anywhere and no way to design decentralized pay-for-performance incentives using tokens. For example, in the context of blockchain-based fundraising and IDOs (initial decentralized offerings), there is no way to distribute in a decentralized manner referral rewards based on verified IDO participation. The same goes for liquidity pool promotions, NFT promotions, dApp promotions or any other on-chain event — crypto lacks a way to tap into one of the most powerful growth driving tools, which is referral marketing.
In June 2021, the Attrace team introduced a paradigm shift for promotion in the web3 space: A referral network for the web3 space — a trustless referral layer for the entire blockchain ecosystem. Here are the main features:
The Attrace referral layer is run by independent Verifier Nodes that are able to observe any tokenised asset on any blockchain. This makes the Attrace Referral Network blockchain agnostic, it can support any asset on any public blockchain with the option to operate cross-chain. Attrace currently supports Ethereum and Polygon, with various other chains to be rolled out soon (e.g. BSC).
The methodology works solely via crypto wallets (three party referral logic modeled via minted referral tokens, with decentralized distribution among participants) and therefore does not require any web2 tracking tools like cookie tracking or fingerprinting. The Attrace referral network does not need any private data at all – in other words, privacy and security issues are no longer relevant anymore, while operating in the referral marketing space… let that sink in for a moment. The more prevalent issues in web2 referral marketing are an absolute no-go for web3. With Attrace, finally, marketing in web3 based on web3 standards is now a reality.
With Attrace, there is no more second guessing or wondering: The rewards budget is locked in the smart contract and paid to promoters and participants during the referral program. Guaranteed. Code is law and each on-chain action will be reflected in your wallet. Pay-out is possible in any cryptocurrency.
There are a myriad of use cases for the Attrace Referral Network as the concept in principle can work for any tokenised asset on any chain. Attrace currently offer integrations for the above four and is rolling these out on multiple chains, with Ethereum and Polygon being live already.
To up-to-date about Attrace and how to set up your own referral program, we strongly advise you to subscribe to our newsletter.
Get prepared for the future of affiliate marketing.
