5 Ways Coupon Extensions Take Affiliate Program Revenue (And How To Protect Your Profits)
Coupon extensions like Honey and Capital One Shopping seem like direct routes to more revenue. Dig deeper though, and it’s clear that these popular shopping aides are actively hurting your affiliate program and overall revenue.
Coupon extensions contribute to massive program losses in countless ways, lowering AOV, discouraging repeat sales, and staking claim to customers for up to thirty years.
Programs lose staggering amounts of revenue from extensions. Honey admitted that their extension alone decreased merchant revenue by 1.6 billion in 2020.
How exactly does this tech loved by millions of customers cause such destruction?
With the help of ad protector clean.io, we’ll show you how coupon extensions chip away at your earnings, focusing on the five most damaging factors. These losses aren’t permanent if your program implements a few protection measures. We’ll cover those strategies, too!
Let’s start with false attribution, the first way coupon extensions take affiliate program revenue.
#1: False Attribution: Stealing Sales From Your Other Affiliates
Coupon extensions are wrongly celebrated as top publishers in many affiliate networks. Their top affiliate status is achieved simply by hopping onto a sale that was already going to happen – and then ending up with the commission.
This commission theft (from your other affiliates) occurs due to an attribution method known as last touch attribution.
Whenever there is a conversion, it is credited to the affiliate whose link the user clicked most recently. In this case, the coupon extension would be the most recent affiliate link (users receive promo codes automatically at checkout from the extension, and then use those codes to purchase).
Another affiliate may have created the conversion opportunity (via a post, review site, paid ad, etc.), but it’s the coupon extension that gets the commission. Your other affiliates do the heavy lifting, but the extension vacuums up the sale.
Known as coupon poaching, this practice is the primary way extensions siphon affiliate program revenue.
With 92% of shoppers searching for coupons or offers before making a purchase, and coupon extensions making this process ridiculously easy, coupon poaching should be a massive concern for your program.
#2: Decreasing Average Order Value Of Your Offers (AOV)
Coupon extensions automatically serve all active codes to users, no matter if the particular code was intended for that user or not. This tech simply scans its databases for the best deal and serves it up at checkout. If one extension user uses an especially generous “friend and family” code, that same code will keep being inserted for every other extension user.
From loyalty rewards, to influencer-drops, to activity pushes, codes are meant for specific audiences. Giving everyone access stretches margins thin and naturally reduces AOV.
A clean.io white paper shows just how damaging coupon extensions are to AOV, with clients in major verticals seeing AOV increases of almost 30% just by blocking coupon extensions.
#3: Preventing The Economic Advantages of Loyalty
With coupon extensions automatically serving the best deals to customers, tactics that have proven to generate loyalty are rendered obsolete.
The auto-serving of codes through coupon extensions drastically reduces the effectiveness of:
- Social media promo code drops and contests
- Repeat purchase bonuses
- Referral rewards
- Program newsletter code drops
- Any tools that your program uses to keep customers engaged
Losing the power of loyalty marketing tools is a huge loss for any program, as the cost to acquire a new customer is 6x-7x higher than retaining one.
You may be thinking that programs are still making more money via coupon extensions, so losses in loyalty don’t matter.
Beyond killing loyalty, however, coupon extensions don’t even provide more revenue for programs.
According to clean.io’s findings, the customer would have bought with or without the coupon, meaning the coupon did nothing to drive incremental revenue.
More expensive customer acquisition costs + no sales increase = coupon extensions.
#4: Slowing Down Checkout Pages
When a customer reaches checkout, coupon extension technology slows everything down.
A few of the many ways that coupon extensions slow down checkout pages in your program:
- Searching databases to load applicable codes for the customer
- Registering customer coupon code entries (extensions are allowed via their TOS to store new code entries from customers – creepy)
- Layering additional cookies on offer pages via outdated technology
clean.io recently stated their clients have seen a 10% checkout page site speed boost simply by blocking extensions. How much faster would your campaign checkouts run without extensions bogging them down?
#5 Reducing Cart Completions And Stopping Sales
Slower checkout speeds aren't the only way that coupon extensions ruin conversion rates. Coupon extensions produce downturns in cart abandonment and cart completion rates, as well. Clean.io is seeing consistent drops in cart completions due to coupon extensions, noting that merchants are losing around 4% revenue on average.
Coupon extensions not only provide codes directly on the site that the customer is visiting but also links to sites with better deals – allowing customers to bolt for a better price.
Hopping to another site to save leaves more carts empty.
With clean.io’s recent findings that coupon extensions serve over 100 codes to a user per site, there are clearly many exit paths for thrifty users to leave your campaigns.
Protecting Program Revenue From Coupon Extensions
Preventing coupon extensions from stealing your revenue can be done through simple tracking and cart adjustments.
Enable First Touch Attribution To Prevent Coupon Poaching
From a tracking standpoint, you first need to ensure that your platform allows first touch attribution (as mentioned in factor #1 above).
By enabling first touch attribution, you’ll reward affiliates who drive sales versus coupon extensions that simply steal them.
Coupon extensions can still inject their codes, continuing to cause all of their damaging effects – except in one key area: Coupon extensions will no longer be able to poach sales from your other affiliates. Getting rocking with first touch attribution only requires a few campaign adjustments.
Once first touch is enabled, you'll see a swift reduction in revenue going into the deep pockets of coupon extensions, with revenue now flowing to affiliates who are actively promoting your campaigns.
One major affiliate group that becomes activated by first touch attribution are influencers.
This simple attribution switch has made a huge difference to FanFuel’s affiliate program, providing the structure for scale to seven figures in just seven months. (Check out the Everflow & FanFuel influencer case study for details.)
More of your affiliates will show performance gains through first touch attribution, such as:
- Podcasting affiliates now receiving credit for creating a buzz around your product
- Review sites being rewarded for a thorough review of your products
- SEO affiliates finally receiving credit for long-tail research that catches user attention
By enabling first touch attribution, you're not only preventing coupon extensions from taking unjust earnings, but you’re also uncovering more star performers – and who doesn’t want more quality affiliates in their program?
Study Unnatural Click To Conversion Times To Catch Coupon Extensions “Red Handed”
To generate a campaign conversion, a few steps need to occur on the landing page:
- The user needs to digest the information on the page.
- The user needs to decide to proceed with the conversion action.
- The user needs to complete the conversion action, such as submitting email or credit card information.
These actions typically occur in minutes, falling under the metric of click to conversion time.
With coupon extensions, conversion times drop down to seconds, as a user simply clicks on a link to another site with a code injected and completes the conversion action. Typically, conversions under 30 seconds are signs of a coupon extension, coupon site, or bot.
Like with coupon poaching, you can start allocating more revenue to deserving affiliates by making a few tracking adjustments.
First, you need to determine what is a reasonable time frame for campaign completion.
Next, adjust your campaign tracking setup to not allow any conversions to fire quicker than that time frame (we’re happy to show you these adjustments in Everflow).
Eliminating these unnaturally-quick conversions prevents coupon extensions from receiving credit for unwarranted conversions, protecting your margins and saving your budget for affiliates who power leads and sales.
In Everflow, you can study the click to conversion times of all of your campaigns and spot coupon extensions receiving false credit for conversions via Click To Conversion Time reports:
With Click To Conversion Time reports, you’ll see just how pervasive coupon extensions are in your program’s revenue, have the tools to stop further damage, and even prevent fraud (like those annoying bots). Dive deeper here.
Get CleanCART To Block Coupon Extensions
clean.io provides a massive return for major merchants Barstool Sports, ViacomCBS, and birddogs through innovative solutions that prevent malicious tech from attaching to ad campaigns.
Our clients love cleanCART, as it connects to their program via a convenient integration and makes an immediate difference in monthly revenue. Once enabled, your program will be able to block coupon extensions from injecting codes on campaign checkout pages.
According to a recent chat we had with the clean.io team, merchants are seeing 11% margin gain on average with cleanCART through blocking coupon extensions.
Want to see how much your program can save by blocking extensions? Clean.io offers a pretty unique free trial:
Traffic headed to your campaigns is split into two buckets: 50% of traffic reaching your campaigns with extensions enabled, 50% with extensions blocked.
These tests will show you exactly how much you’ll save by cutting coupon extensions.
It’s Go Time! Stop Coupon Extensions From Taking Your Program Revenue
The last thing you need is coupon extensions taking earnings away from your program and your hard-working affiliates.
With the info listed above, Everflow, and cleanCART, you’ll have all the tools necessary to prevent revenue damage caused by coupon extensions.
Recover more program revenue today by scheduling a demo of the Everflow platform, where we’ll be happy to show you just how we can help you stop coupon extension losses.