How it works
Traditional affiliate network is a type of performance marketing that aims to reward affiliates for acquiring clients by using their own marketing networks. Affiliate network includes 4 types of participants: Merchant, Affiliate Network that deals with data flow and payouts, Affiliate, and Customer.
Merchant uses the affiliate network to add offers. Offers specify a certain type of data (lead) Merchant is willing to pay for (lead cost). Affiliate launches and maintains their own marketing network that may include websites, call centers, outdoor advertising, and other methods to acquire customers.
By using marketing schemes, Affiliate obtains a piece of customer data (lead) that fits the offer and adds it to the affiliate network. Affiliate can do that directly or by using a tracker service that creates a lead in the required format and adds it to the affiliate network. For the most part, the lead is sent to Merchant, while meta-information with lead, offer and affiliate data is added to the affiliate network. If the lead is encrypted, Merchant only receives it upon approval by the network. If Merchant approves the lead (or doesn’t decline it within a certain timeout), the lead cost is charged from the Merchant’s account. After the network charges a commission, Affiliate receives the remaining amount (price). If Merchant declines the lead, it is sent back to Affiliate. Affiliate can sell the lead to any interested party or put it up for auction.
Using the core concept of an affiliate network, HOQU aims to enhance transparency and integrity of transactions between its participants through applying Blockchain technology for core logic and payments. Plus, HOQU creates opportunities not only for merchants and affiliates, but also affiliate networks. An affiliate network can add its available offers to HOQU to manage leads with more transparency. HOQU affiliates will be able to see offers added by the affiliate network and engage with them immediately.
Let’s take a look at the core smart contract functionalities available to all participants.
- All payments are made in HOQU tokens (HQX). By requesting buyToken method, any participant can buy HQX with a certain amount of ETH. Total amount of HQX credited to the participant’s account is determined by the rate
- To join as Affiliate, you just need to have an Ethereum address to request smart contract methods and receive payouts in HQX. Affiliate can either work directly via platform, or use tracker services. Affiliate networks can also join as HOQU Affiliate to act as a broker for its affiliates.
- To join as Merchant, you need to request allowance method and set a budget. By doing so, you give HOQU smart contract a permission to write off the cost of the lead from your account if you decide to buy it. Unless such a permission is given, the account owner is the only one who can manage HQX tokens. Affiliate networks can also join as HOQU Merchant to act as a broker for their merchants.
- To join as Affiliate Network, you need to add network information to HoQu platform by requesting addNetwork method. You need to submit the network identifier (to link together all offers within the network), network name, and url with network information.
- To add an offer, Merchant needs to request addOffer method and provide the offer identifier; affiliate network identifier (if the offer added is a part of affiliate network); offer name; and url with offer information. Affiliates (or affiliate networks) must refer to the information under this url to create offers in the required format and send them to merchant by using the method convenient to the merchant. For most offers, HoQu will provide special tracker services to collect, create, and deliver leads on a certain offer and add offer metadata to the platform.
- To add a lead to the system, Affiliate needs to request addLead method and submit the lead identifier; offer identifier; url address with the lead (if Affiliate delivers the lead to Merchant by themselves, URL field remains empty); password to get access to lead data; and lead metadata in the form of a string. Metadata format is determined by Merchant and may contain any information Merchant may need to approve the lead.
- Once the lead is added, the owner of the respective offer will receive an event. After checking lead metadata, the owner of the offer can approve the lead by requesting approveLead method and giving the lead identifier. If the owner of the offer fails to decline the lead within a set timeout, smart contract requests approveLead automatically and performs the following actions:
- lead cost in HQX is charged from the address of the winning offer owner
- lead cost in HQX (minus 0.5% commission) is credited to the address of the lead owner
- offer owner is provided with a password to access the lead data. - If, after checking lead metadata, the offer owner refuses to approve it, they need to request declineLead method and submit the lead identifier. The lead status will be updated, and the lead owner will receive a decline event. If the lead was added by a tracker service, Affiliate will get access to the lead data to dispose of the lead as they deem appropriate.
We understand that using Ethereum wallets and requesting smart contract methods require certain technical skills and resources from system participants. To HOQU participants who don’t want to create their technical solutions by using our SDK, we’re offering an easy to use web app (desktop and mobile version). Its server side implements the logic described above and requests smart contracts by using service API. All transactions will be conducted through blockchain (but through our API), allowing to maintain transparency and decentralization. Participants will simply need to register a HOQU account, make a deposit in any suitable currency, and start using the system.
All smart contract methods are provided for information only. The final implementation will surely be different from the logic described above and may be distributed between several contracts.
Examples of the above-mentioned contracts, HQX token contract, and ICO contracts are
available on GitHub