Arbitraging Influencers

The WSJ recent;y reported on lawsuits by Internet influencrs against the makers of browser extensions that seek out discounts. These extensions, such as  as PayPal Honey, Capital One Shopping and Microsoft Shopping, automatically seek out discounts that might exist elsewhere and apply them at checkout. Influencers no longer get credit for directing their followers to the retailer. 

“If the customer clicks on…the Plaintiff’s [influencer's] affiliate link and then at checkout clicks on the Honey pop-up, then the business tracks the sale as originated from Defendant [browser extension], and Plaintiff [the influencer] will receive no credit for the purchase,” one suit against PayPal said. “Honey erases Plaintiffs’ affiliate links and replaces it.” 

The problem stems from a standard industry practice. Influencer affiliates include a link into their content for interested followers to make purchases of a brand. The industry has settled on the practice of "last-click attribution." When the extension replaces the influencer attribution with its own, the influencer does not receive credit for the sale. This is kind of like paying someone to stand outside of a high-end boutique informing eager customers that they can save at a discount store. The brand wants to price discriminate by selling through both the boutique and the discounter, but it doesn't want the discounter to interrupt too many of the high-end sales. Actually, it more like a billboard company advertising discounters just outside the boutique. The boutique is suing the billboard company.