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Honey has now lost 4M Chrome users after shady tactics were revealed

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Re: Honey has now lost 4M Chrome users after shady tactics were revealed

#131

Post by johnnyanmac »

0rzech wrote: post #6

It's ironic that probably the biggest victims were youtubers and other "influencers" who mindlessly promoted this extension to their viewers, for money of course.

It's actually a trrickle-down system. Smaller youtubers who have never heard of the extension (let alone were approached to advertise) may be hurt the most, because a larger youtuber who took the deal advertised it. e.g. a tech youtuber could be hit a lot if Linus Tech Tips advertise Honey, because they have a strong overlap in subscribers.

It was something a youtuber I was subscribed to was talking about in how he was still seeing his affiliate numbers drop overthe last year or so, and it was actually putting his existing deals in danger. Then as a test after the expose, he asked a few family members who did use his links if they also installed Honey. He definitely never advertised Honey himself.

Re: Honey has now lost 4M Chrome users after shady tactics were revealed

#132

Post by johnnyanmac »

lozenge wrote: post #107
kmeisthax wrote: post #85

Earlier quoted context omitted.

LTT found out about the affiliate code changes and dropped Honey as a sponsor. The problem is, when they drop a sponsor it's usually only announced on their forum page. Linus considered making a video for a wider audience but was worried he'd get shit on for bringing up an issue that technically only impacted him. Remember: before MegaLeg's video the only thing that was known was the affiliate code ripping, and it wa…

Let's be real, LTT didn't want to bite the hand that feeds him. What future sponsor would sign up if they knew LTT might make an expose about them in future for clicks. Even something basic like exposing how much these sponsors pay out in commission instead of towards the quality of their products would be hugely negative publicity.

> What future sponsor would sign up if they knew LTT might make an expose about them in future for clicks.

ideally, ones that don't want to secretly sap at his revenue stream.

Re: Honey has now lost 4M Chrome users after shady tactics were revealed

#133

Post by stevage »

chatmasta wrote: post #73
elamje wrote: post #71

Have a friend high up at one of the “Big 3” in this space. The entire business model is predicated on injecting themselves as the last click for attribution even when they weren’t remotely responsible for the conversion. Cool business, but can’t keep going on forever without someone catching on.

I remember when this was called cookie stuffing, and eBay even sent a guy to jail for doing it with their affiliate program. That’s the same eBay that owned PayPal, which now owns Honey…

Didn't the guy that ran Skeptoid go to jail for similar?

Re: Honey has now lost 4M Chrome users after shady tactics were revealed

#134

Post by miki123211 »

elamje wrote: post #71

Have a friend high up at one of the “Big 3” in this space. The entire business model is predicated on injecting themselves as the last click for attribution even when they weren’t remotely responsible for the conversion. Cool business, but can’t keep going on forever without someone catching on.

Now what I'd love is an extension that would inject a person of my choosing as the last click.

Amazon et al don't allow you to offer this as an affiliate program partner, not without a special and custom agreement at least, but if the extension was partner-agnostic and released by a party unaffiliated with Amazon in any way, there's nothing they could realistically do about it.

It'd be one way to bring Amazon Smile back, and on many more sites than just Amazon.

Re: Honey has now lost 4M Chrome users after shady tactics were revealed

#135

Post by stevage »

gruez wrote: post #120
ryandrake wrote: post #116

Earlier quoted context omitted.

It seems like the whole system would be so much better without coupons. Retailers should charge a single transparent price without having everyone have to go trawling around the Internet for coupon codes which may or may not work, and then being mad because some customers found bigger coupons, which you really didn't want them to find. And other customers using coupon finders who themselves are opaque and sometimes g…

>The whole system seems to be set up to reward [...] 2. customers willing to deal with a ridiculous system for a discount. https://en.wikipedia.org/wiki/Price_discrimination#Coupons It's unclear whether banning price discrimination as a whole is a good thing. Is it really a bad thing that people with more money pay more, and people with more time can get a discount?

Yeah I think it's fine. I actually like that people who are short of money can put the effort in to knowing where and when all the sales are and live a bit cheaper, and I'm ok with subsidising them.

Re: Honey has now lost 4M Chrome users after shady tactics were revealed

#136

Post by ketau »

jabroni_salad wrote: post #10

In case you missed it, a co-founder of Honey did an AMA on this topic a few days ago. https://old.reddit.com/r/IAmA/comments/1jlfms8/im_ryan_hudso... I'm not a honey user but I thought this section was interesting: > This gets a bit technical but in the video, Jonathon carefully shows you that the ‘NV_MC_LC’ cookie changes from Linus Tech Tips -> Paypal when a user engages with Honey. What he must have seen is that t…

Ryan here too - will try to respond to some of these with more info.

The two biggest missing pieces from both my discussion and from the video are: 1) stand down rules for affiliate, and 2) cash back to the user.

I was trying to address the claims he raised in the video specifically and since he didn't mention either I didn't in my reddit post except for a little bit in a couple of the answers.

1) For the case where the store only uses last click (which is most of them) Honey and other browser extensions follow a rule set by the affiliate networks called 'stand down'. This means they attempt to detect when another affiliate link is clicked (e.g. from a creator) and then either fully disable the functionality or at least don't use affiliate links. Only browser extensions are subject to these rules (e.g. if you visit a coupon code website they will use their affiliate link and override the creator).

Detecting this can be a bit tricky across numerous affiliate networks and I suspect the NewEgg example was selected because it used a non-standard way to manage affiliate tagging and therefore wasn't detected by Honey's stand down logic.

fwiw I agree with the sentiment that Honey shouldn't have been tagging on a 'hey we didn't find any codes' or 'use paypal' click and I personally wouldn't have approved that, though it probably technically does meet most of the affiliate network stand down rules (well, at least it did - I'm sure they've been updated which is a good thing).

2) Jonathon's video is completely silent on the other core value proposition of Honey: cash back. Honey, like Rakuten, Capital One Shopping, etc, offers cash back funded by affiliate marketing. The model is not new - Ebates (now Rakuten Rewards) was founded in 1998. Honey added this program in 2015.

When a user is shopping with Honey on a store with affiliate commission, Honey almost always gives the user cash back. There are a limited number of exceptions, generally because of the store's policy, and occasionally because there are so many exclusions to the affiliate program that it makes offering cash back confusing to a user.

A valid question to ask is: if a user clicks a creator affiliate link AND has a cash back tool like Honey or Rakuten should they or should they not be eligible for cash back. Personally I think absolutely yes, the user's preference is the most important. But I've heard reasonable people argue the opposite.

What I don't think is that offering it's users cash back makes Honey a scam and I think Jonathon was negligent in presenting this narrative without even considering this primary use case for what is actually the #1 business model in affiliate marketing.

I'll stop there. Happy to answer a few more questions here.

Re: Honey has now lost 4M Chrome users after shady tactics were revealed

#137

Post by miki123211 »

zonkerdonker wrote: post #91
dpbriggs wrote: post #84

Why do retailers put up with Honey? They're clearly not providing value with the attribution theft. Why give them money?

Extortion, essentially. Honey will actually give users the largest available discount if the retailer doesn't buy into the affiliate program (i.e. the retailer loses money). If they do agree, then the retailer can limit the coupons and discount code shown to customers through Honey.

And there's presumably also a profit-sharing agreement.

E.G. if the retailer normally pays at 300 bps to their affiliates for a particular transaction, Honey may only get 100 or 50 bps.

It's a choice between e.g. Honey giving every customer of vendor X a voucher code from a particularly valuable influencer in X's niche, which gives 30% off on first orders, versus giving them a 20% discount and taking 1.5% for itself.

This is a great deal for the retailer, they go from -30% to -21.5%, it's a great deal for Honey because that kind of money on millions of transaction is a lot of money, and it's a great deal for users, as Honey wouldn't even exist without this scheme, and they'd get 0% off instead of 20.

Re: Honey has now lost 4M Chrome users after shady tactics were revealed

#139

Post by nadir_ishiguro »

stevage wrote: post #133
chatmasta wrote: post #73

Earlier quoted context omitted.

I remember when this was called cookie stuffing, and eBay even sent a guy to jail for doing it with their affiliate program. That’s the same eBay that owned PayPal, which now owns Honey…

Didn't the guy that ran Skeptoid go to jail for similar?

I'm sorry what? Skeptoid the podcast?

Edit: Yes. In 2014. How did I miss that? Used to listen to that podcast, though probably stopped before that.

Re: Honey has now lost 4M Chrome users after shady tactics were revealed

#140

Post by miki123211 »

ryandrake wrote: post #116
gruez wrote: post #100

Earlier quoted context omitted.

Sounds like more of an issue for the consumer than the retailer? Suppose the best coupon for a retailer is 20% off, and Honey shows that to its users. Retailers want to stem that loss, so they bribe/pay Honey, maybe 5%, to post a 10% coupon in its place. That way the store loses 15% rather than 20%. That might be bad for the consumer, if they thought they were guaranteed the "best" deal, but I'm not sure how the stor…

It seems like the whole system would be so much better without coupons. Retailers should charge a single transparent price without having everyone have to go trawling around the Internet for coupon codes which may or may not work, and then being mad because some customers found bigger coupons, which you really didn't want them to find. And other customers using coupon finders who themselves are opaque and sometimes g…

> The whole system seems to be set up to reward [...] customers willing to deal with a ridiculous system for a discount.

That's not all of what coupons are for.

They're also a form of advertising. If you give them out to an influencer in your niche who can bring you great customers, you can make a lot of extra profits.

Imagine you're making an app for managing hair dressing salons. If there's a particular Youtuber popular among hair dressing salon managers, you can do a deal with them where their viewers get 20% off on the first year of their subscription to your app, and the influencer gets an extra 3% of that revenue.

You do this because you expect that people watching that channel are already hair dressing salon managers, and hence are very likely to become big spenders with your company once they start using your services. It's a great deal for everyone.

Honey turns that on its head by indiscriminately offering that influencer's valuable voucher code to everyone, reglardless of whether they've seen any of their videos.

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