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LegalEagle and Wendover Productions have brought a class action against Honey/Paypal.

• wkat4242 2y ago
  Lol wendover productions, sounds like a spicy movie studio :) Never heard of that but I'm not so deep into YouTube.
  • pr337h4m 2y ago
    Pretty decent logistics channel, perhaps a tad too oversimplified imo
• progval 2y ago
  Legal documents of the class action: https://www.courtlistener.com/docket/69503243/wendover-productions-llc-v-paypal-inc/ https://www.courtlistener.com/docket/69503243/wendover-produ...
• aimazon 2y ago
  I can't even begin to understand how they think this will succeed. The defence so many influencers employ when advertisers turn out to be doing shady things is "You can't hold me responsible! It's not my fault, how can I know what my advertisers are doing?" but as soon as an advertiser does something that harms the influencer, it's a problem? Honey's business model has always been obvious to anyone with any understanding of affiliate marketing, their innovation was that they created a browser extension: that's it. Coupon code websites were doing exactly the same thing for decades before, retailmenot being the one we're probably all familiar with from the early 2000s. The claim that these influencers have lost affiliate commissions because Honey's method is true but it's also true that these influencers are losing affiliate commissions to one another. Amazon is the preferred e-commerce platform for affiliate marketing because they are extremely generous with how they attribute: if you click an Amazon affiliate marketing link and then make any purchase in the next 30 days the affiliate will get paid regardless of whether they were advertising the product you bought or not. And guess how Amazon attributes? Last click! If Influencer A includes an affiliate link for "Expensive Camera" and Influencer B includes an affiliate link for "Cheap Toy" and you click on "Expensive Camera" then click on "Cheap Toy" and then buy the expensive camera, Influencer B is getting paid for that purchase expensive camera purchase, despite Influencer A influencing you to buy it. Affiliate marketing is adversarial, it's a fight for attribution at the expense of everyone else. Holding Honey to a different standard isn't going to work for them. Wilful ignorance of how a company operates isn't a defence against being harmed by them, it's embarrassing.
  • aimazon 2y ago
    My prediction for the response from Honey: * Affiliate marketing attribution is understood to be imperfect, the best effort nature of it is priced in to the commissions * Affiliate marketing uses multiple attribution strategies with varying trade-offs including coupon codes (e.g: "use code INFLUENCER at checkout for a 10% discount") vs. links ("click the link in my description") because of the imperfect nature * Affiliate marketing is adversarial, all of these influencers have "stolen" attribution from each other As Honey will have no problem proving: * The advertisers (e.g: NordVPN) understand that affiliate marketing attribution is not an exact science, that n sales driven by an influencer does not translate to n affiliate commissions, and that the amount they offer to influencers per sale accounts for that * The agencies that work on behalf of influencers to negotiate deals with advertisers understand the challenges of attribution and have negotiated based on this imperfect art of attribution * The agencies/influencers/advertisers choose whether to engage in affiliate marketing by weighing up the benefits of being paid per sale vs. being paid per video or views * There will be pages and pages and pages of emails within these influencer agencies where discussions have taken place on the choice to use affiliate marketing based on the audience of a video, e.g: link based affiliate marketing is less effective for an audience that watches videos on TV, vs. an audience primarily watching the video on a computer * Honey was not receiving an equivalent rate to what the influencers were receiving, the influencers would not have earned their per sale commission x the number of sales if Honey had not captured the attribution (which demonstrates that this is all priced in) Maybe PayPal will settle but given the harm this drama has caused to the Honey business, I doubt they have any intention of doing so.
  • ageitgey 2y ago
    > Holding Honey to a different standard isn't going to work for them. I think the perceived difference is that influencer A or B got someone to click a link to a store while Honey used a browser extension to reset the affiliate attribution when the user was already at the store on the checkout page about to click to purchase. They didn't drive the user to the store. That's a big difference.
    • _fjg8 2y ago
      Cart abandonment is a big problem in ecommerce, reducing cart abandonment is an entire field of business. https://www.shopify.com/blog/shopping-cart-abandonment https://www.shopify.com/blog/shopping-cart-abandonment "According to Baymard Institute, 70.19% of online shopping carts are abandoned. Think about that. For every 100 potential customers, 70 of them will leave without purchasing. How much would your revenues increase if you were capturing those sales instead of losing them?" Honey provides value to merchants because it reduces cart abandonment: it's easy for Honey to argue that without Honey these sales would not have completed and therefore Honey deserves the commission on the sale. Even in cases where Honey didn't find a discount, Honey can argue that by searching for coupons on behalf of the user the user gains confidence that the price they're paying is the best price and that's why they complete their purchase.
• dataflow 2y ago
  If this ends up succeeding then (why) wouldn't it mean companies could sue ad-blocker creators?