The affiliate link scandal isn’t Honey’s fault, it’s a symptom of a broken internet

PayPal’s Honey browser extension is currently facing significant scrutiny due to allegations from content creators and publishers. They allege that Honey - which automatically finds and applies relevant discount codes when the consumer visits a brand's website - replaces original affiliate links with its own at checkout.

This process purportedly redirects commissions to Honey that should have gone to content creators and publishers who contributed, perhaps more meaningfully, to the sale. Creators are furious, filing a class action lawsuit and calling this “the biggest influencer scam of all time”.

Without wishing to diminish their outrage, the controversy has a very familiar feel for those in the performance marketing world, where, based on a last-click attribution model, those media vendors and publishers who focus on the last click have always won out.

Many clicks make up a multi-touchpoint world

In fact, I’d suggest that Honey and PayPal are not the root cause of this issue; the real problem is the flawed logic - endemic across the online space - of only judging publishers by the last click, when so much value comes along the chain in a multi-touchpoint world. To use a football metaphor: without the assists, you don’t get the goals.

As an email data owner and customer acquisition platform, we know from experience that when we work with a brand, we can use email suppression to only reach out to new customers. We then lay down our attribution tool, which maps the email addresses of those who purchase onsite to the emails we delivered, also noting those who opened and clicked.

Solely looking at clicks to convert, we map 30% more sales than measured on the last click, and when we look at opens and clicks, this increases the average ROI from £6 to £18. We are not suggesting we were the sole reason for that conversion, but we are delivering a unique audience to whom the brand is not talking; if we were only rewarded for the last click, we would likely be pulled from the marketing plan, and the brand would lose out on highly qualified new audiences.

Across the digital world, unfair attribution plagues the system, and brands bear a degree of responsibility. If they only judge publishers on their ability to convert a user on the last click, those publishers will inevitably apply bottom-of-the-funnel tactics - requesting aggressive voucher codes and discounts, eroding brand profitability and annoying consumers.

This is not an external issue; it is an internal one, relating to attribution and siloed departments. If a brand’s social team is subject to a strict CPA requirement, will they not heavily retarget affiliate traffic and convert via their codes? After all, it’s free traffic for them and allows them to hit the target.

Meanwhile, suppose a publisher puts a brand in front of a new customer and gets them to the brand’s site. They decide to buy the item later, and then throughout that day, the brand retargets them via Facebook with a stronger offer. They convert, after the brand has applied bottom-of-the-funnel tactics to convert them, but the publisher did the hard work, driving them there for free, and was not ultimately rewarded.

For brands, these are short-term wins that create very real long-term problems.

What are the consequences?

Audience discovery reduces. If I, as a publisher, am only rewarded on a last-click basis, why would I work to send a brand new customers, only for them to be retargeted or scooped up with a voucher code? Inevitably, brand audiences start to decrease as publishers who are willing to work on a performance basis narrow their efforts to voucher codes, cashback and retargeting partners. The funnel contracts, revenue falls and less money is made. The brand tightens its purse strings, the board puts more pressure on CPA, more top-of-the-funnel traffic is lost, more last-click partners are used - and the cycle continues.

More fraud. As reputable publishers pull out of the hunt and CPA targets become more aggressive, you are left with questionable publishers who may employ fraudulent tactics to claim the last click. The affiliate space is rife with fraud. Then again, can you blame them, when for years they have worked for free, only to have their efforts attributed to retargeting or voucher code sites?

Erosion of profit. If I, as a publisher, am only judged on the last click, I will request an aggressive discount. Other publishers inevitably do the same and suddenly the brand is a discounter and struggling to find or convert high-quality traffic. LTV drops, ROI drops and revenue drops. So brands double down on CPA and remove discounts; but it's not the discount that was the root cause - it was the focus on the last click. So when you remove the discount, publishers stop pushing and the brand is left struggling to fill the revenue gap.

Ultimately, last-click attribution is the overarching issue, and the Honey controversy is a very typical symptom of a broken space. If it is not fixed, the performance space will disappear, and brands will struggle to discover new audiences at low cost.

If you demonise Honey, what's the argument not to penalise any similar browser extension, website popup/personalisation, voucher code or cashback site, cart abandonment player, or even a brand's own heavy retargeting? All of these can be argued not to drive a user to the site but merely convert one who was driven there by the act of another publisher.

What should marketers do? Stop focusing on ROI based on the last click, and reward top- and middle-funnel partners, as those are the ones who ultimately help to grow their brands. For this, they need the support of those at the top of their business, who have a responsibility to understand how this entire ecosystem really works. CEOs and boards who put pressure on marketers to use only tactics that generate sales are an important component of this problem.

Failing to recognise the value upper-funnel partners offer causes long-term damage to revenues and will essentially kill off the performance space. If you don’t reward those who provide the assists, you won’t score nearly as many goals.

Also published in: The Drum