Please describe your proposed solution
1) Introduction
a) Definitions
Affiliate marketing is a type of online marketing. The Interactive Advertising Bureau (IAB) has this definition of affiliate marketing:
“Affiliate Marketing is the practice whereby a digital publisher or website promotes an online retailer and earns a commission based on the sales or leads that the advertising generates for that online retailer.” (Lee et al., 2016).
Within the online marketing landscape, affiliate marketing stands out as a performance-based advertising model. Advertisers ("brands," "retailers," or "merchants") compensate third-party publishers ("affiliates") for generating traffic or leads to their products and services.
b) The participants
The world of affiliate marketing revolves around five key players: publishers, advertisers, networks, customers, and of course, the products themselves. We'll break down each of these roles and how they work together to make affiliate marketing tick.
Publishers ("Affiliate", "Affiliate Marketer", "KOLs") are the shopfronts of the affiliate world. They run websites or apps featuring a variety of brands and products. Their goal? Build a large audience and earn commissions by connecting customers with those brands. There are several reasons why customers might choose an affiliate site over a brand's own store. Often, affiliates offer added value, like in-depth product comparisons or exclusive deals, that make them a one-stop shop for informed buying decisions.
Advertisers (brands) use affiliate marketing to reach wider audiences through publishers' websites. They offer commissions to publishers in exchange for promoting their products. To track these sales accurately, a neutral third party, the affiliate network, is involved.
Affiliate networks act as the middleman, streamlining tracking, payments, and connections between advertisers and publishers. They can even expand each party's reach by providing access to a wider network of potential partners.
The last player is the customer. They take the desired action, like making a purchase or signing up for something, which earns the publisher a commission. These actions aren't always just sales - sometimes it's just capturing a lead (like an email signup) that might turn into a sale later for the advertiser.
The product is anything a customer is willing to buy, from physical items like clothes to digital products like ebooks or even services. Publishers embed these offerings on their websites. When a user clicks the product link, they're whisked away to the advertiser's site to (hopefully) make a purchase.
Commissions (CPA) are based on performance - advertisers only pay when a desired action happens (sale, signup, click, etc.) by customers. This makes affiliate marketing a low-risk strategy for advertisers and performance-driven for publishers."
2) Problems and Impacts
a) Problems in Web 3 space
Only 4.2% of global internet users own cryptocurrencies, while 64% have expressed interest in crypto. How can we convert non-crypto users to crypto users and retain them within the Web 3 space?
b) Problems in affiliate marketing industry
- Lack of Transparency
- Centralized affiliate marketing platforms often control data and reporting, hindering publishers from verifying clicks, conversions, and commission payouts. The lack of transparency regarding commission calculations, top-performing products, and traffic sources can cause frustration and erode trust.
- Nearly a quarter (23%) of publishers recognize a lack of transparency as a significant hurdle in the field of affiliate marketing.
- According to a report from iMediaConnection, 42% of publishers said they had experienced discrepancies in commission payouts.
- Low commissions
- Publishers (Affiliates) often face low commission rates, making it challenging to earn substantial income. Some centralized platforms prioritize profit margins over fair compensation for affiliates.
- According to research by ShopperApproved and TangoLearn, 38% of publishers find commission rates unsustainably low. This disproportionately affects new affiliates, discouraging their participation and impeding overall growth in the affiliate marketing industry.
- Slow payouts
- Centralized platforms often have lengthy payment cycles, meaning publishers can wait weeks or even months to receive their commissions. This can create cash flow problems for publishers.
- According to a FlexOffers survey, 47% of publishers find slow payouts to be a significant pain point. Data from Business Insider indicates that the average payout time for affiliate programs can vary from 30 to 90 days.
- Program changes
- Centralized platforms can change program terms, commission rates, or even terminate programs entirely without or with little notice. This lack of control and stability can be disruptive for publishers who have invested time and resources into promoting specific products.
- A study by Affiliate Summit found that 62% of publishers had experienced program changes that negatively impacted their earnings.
Publishers have also felt the loss of revenue growth due to middleman dominate the industry.
c) Opportunities and Impacts
The affiliate marketing landscape is brimming with exciting opportunities.
- The global market size is currently over $17 billion,
- The predictions for continued growth reaching $27.78 billion by 2027.
- Over 51% of publishers' revenue comes from affiliate marketing.
- More than 80% of Brands use Affiliate Marketing programs to reach millions of potential customers.
The involvement of the Cardano blockchain can address critical pain points in the affiliate marketing industry. Powered by tokenization, it disrupts the traditional business model and brings genuine value to millions of participants (customers, publishers, and advertisers). This innovation is expected to be a game-changer for CPA affiliate marketing – a trustless, secure future that also accelerates cryptocurrency adoption on a global scale.
3) Solution
Create a decentralized CPA (Cost/Commission Per Action) affiliate marketing platform that enables publishers (also known as “affiliate marketers” or “KOLs”) and advertisers (referred to as “merchants,” “brands,” or “retailers”) to monetize their content and products transparently and securely. Additionally, incentivize participants (including publishers, advertisers, and users) to become crypto-users. The platform, called W3SAA (Web3 Share-An-Action), is empowered by technologies such as the Cardano blockchain, Web3, AI, and Big Data. This means that the interactions between Advertisers, Publishers, and Users are managed by smart contracts and Cardano blockchain protocols, rather than relying on a central authority like Amazon Associates, MaxBounty or AccessTrade.
Within this trustless affiliate marketing platform, W3SAA, advertisers can be confident they only pay for genuine leads or sales. Blockchain technology verifies each transaction, ensuring transparency. Similarly, publishers are assured of receiving their commissions through smart contracts that automatically release payments upon completion of agreed-upon actions. This system significantly reduces fraud, lowers costs, and streamlines the affiliate marketing process, making it more efficient and reliable for all participants.
The W3SAA is expected to attract millions of new users to the crypto space, specifically the Cardano ecosystem, and keep them engaged through the Completed Action to Earn (CA2E) business model. It encourages and incentivizes participants (including users, publishers, and advertisers) to create crypto wallets and receive ADA as commissions and SAA tokens (a cryptocurrency released by W3SAA) as rewards for their contributions. The rewarding cryptocurrency will be distributed to the participants’ wallets when they contribute to the completion of a marketing campaign.
The W3SAA will accept ADA as a form of cryptocurrency payment when advertisers allocate a marketing budget, and publishers will earn a commission accordingly.
W3SAA aspires to revolutionize conventional affiliate marketing paradigms through decentralization, bringing on-chain incentives to millions of users worldwide.
Solution
4) How does W3SAA work
W3SAA operates as a set of smart contracts that generate potential customers (leads) or sales via publishers’ content by having them fill out a form, download a mobile app, or purchase products and services. It automatically acts as a functioning connection between publishers and advertisers, which can include brands, merchants, online retailers, and drop-shipping suppliers (e.g., Amazon, Lazada, Shopee, or Samsung Vietnam’s e-shop).
When users consume (read, watch, listen) content on a publisher's website (such as content created by affiliate marketers or KOLs), they receive value in the form of in-depth product comparisons or exclusive vouchers offered by the publisher (for non-crypto users) and W3SAA ( for crypto users). Additionally, users express their interest by clicking on affiliate links and completing desired actions (such as making a purchase, signing up, or clicking). Commissions are performance-based; advertisers only pay publishers when users complete their desired actions.
This figure illustrates the proposed Completed Action-to-Earn business model. Its main goal is to convert non-crypto users (who are publishers’ audiences) into crypto users and engage them through an incentivized program. This approach not only brings millions of non-crypto users to Cardano but also helps the network increase security, the number of transactions, and Total Value Locked (TVL), as explained in step (1).
Advertisers initiate their CPA marketing campaign by following these steps:
- Connecting Their Wallet: Advertisers connect their wallet to the system.
- Sharing Products and Services: They share information about their products and services.
- Offering a Commission (Cost) Per Action: Advertisers specify the commission they are willing to pay for each desired action (e.g., clicks, sign-ups, purchases).
- Setting the Campaign Period: They define the duration of the marketing campaign.
- Locking Their Marketing Budget into a Smart Contract: Advertisers allocate their marketing budget and lock it into a smart contract.
Additionally, we’ve partnered with the VILAI stake pool to stake the allocated marketing budgets and earn interest in ADA (Cardano’s native cryptocurrency) in step (2).
During registration (4), publishers can select campaigns that fit their channel or content and obtain affiliate links for publishing. They can also view performance reports in real-time.
Users become consumers (5) when they complete desired actions. This helps them discover the most suitable products and services for their needs.
To earn exclusive vouchers or discounts, users can engage with the W3SAA and Cardano community by creating or connecting a wallet. This allows them to receive SAA tokens as rewards for their actions, which contribute to the network's growth.
A commission payment wallet (3) is automatically created. When a commission threshold is reached (7), ADA is automatically transferred to publishers, eliminating the need for them to wait months to receive their payment.
Additionally, a portion of the commission deducted by W3SAA is converted into SAA tokens and distributed (6)(7) to participants (users, publishers, advertisers) as cashback and rewards. This incentivizes them to remain engaged with W3SAA and the Cardano network.
A key challenge when building W3SAA is overcoming the 'bootstrap' or 'cold start' problem: attracting publishers and advertisers before enough users are participating to make the W3SAA network intrinsically valuable. To address this challenge, we are partnering with some well-known local publishers and influencers. These partnerships will help attract a wider audience of users and incentivize publishers and advertisers to join the W3SAA network early on.
- Advertisers:
- Samsung Vietnam (<https://www.samsung.com/vn/>): An well-known online shop from Global Brand.
- KOET Co., Ltd (http://dienmaykorea.com): Samsung Vietnam official selling partner, they act as an online outlet store, sell exclusive selected heavily discounted Samsung models.
- Visa Rẻ (http://www.visare.com.vn): A fast, convenient, secure, and affordable visa application service specifically designed for Vietnamese citizens.
- Lac Viet Auction (<http://lacvietauction.com.vn/>): They are no.1 Auction House and is owning the first government-authorized auction platform in Vietnam.
- Publishers:
- Otofun community: Ranked #1 in the Automotive category in Vietnam according to the online report with 8.16 million monthly visitors.
- Cardano Stake Pool: VILAI pool
The involvement of the Cardano blockchain and partnerships with well-known local and global brands can address critical pain points in affiliate marketing. Powered by tokenization and the Completed Action-to-Earn business model, W3SAA disrupts the traditional business model in Affiliate Marketing industry by creating a trustless and secure environment that benefits all participants – customers, publishers, and advertisers. This innovation has the potential to be a game-changer for CPA affiliate marketing, accelerating cryptocurrency adoption globally.