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#Digital Marketing

PayPal Acquires Honey Science: A New Focus on Affiliate Marketing

On November 20th, the news of PayPal's significant purchase of Honey, the internet’s fastest growing consumer loyalty platform, sent shockwaves throughout the affiliate community. The joining of the internet’s oldest (and most well-known) payment system with affiliate’s latest success story is indicative of how the Affiliate channel itself is becoming a more dominative eCommerce player. Introducing Paypal’s massive audience to Honey elevates the affiliate channel and showcases its bright future.

 

Why Honey?

 

Honey is a desktop browser extension and mobile app that helps users find the best deals using coupons and cashback rewards. It provides its users with a "Savings Finder" that automatically finds and applies available discounts to the customers' order, eliminating the need to search excessively for deals. Honey incentivizes their users with Honey Gold, a points system that users earn while shopping on the Honey platform. Once enough points have been earned, they can be used in exchange for gift cards from top retailers like Nordstrom, Sephora, Amazon, and Ebay.

 

Users also have access to product-focused features on the app, such as Honey’s Price History Tracker and Drop List features. The Price History Tracker shows customers how a product trends in price over time, allowing the customer to determine whether to make a purchase now or delay the purchase in anticipation of a price drop. The Drop List feature notifies users of a price drop for an item they've decided to monitor, ultimately helping to bring the consumer to make a purchase.

How Affiliate Marketers Connect their Brands with Honey:

Brands can partner with Honey by using an affiliate partnership, tracked by an affiliate network platform. In this partnership, brands will agree on a percentage of commission to pay back to Honey for every purchase they close. From there, brands can utilize Honey’s features in many ways. Brands can help sell a brand-new product by providing extra Honey Gold points for all new product purchases. They can also utilize Honey by offering an exclusive code or a more substantial price drop to old inventory or a list of old products that brands are trying to sell out, in which the Honey technology would pick up and add these savings to their customer base during the shopping journey. These are just two of many ways that brands can utilize Honey’s technology for revenue growth.

Why is this Acquisition a Big Deal in Affiliate Marketing? 

As affiliate marketers and eCommerce strategists, iProspect sees PayPal’s purchase of Honey as both a boon to the industry and a significant challenger to Amazon and Rakuten (owner of loyalty behemoth Ebates, and often referred to as “the Amazon of Japan”). Most importantly, though, we see it as an advantageous development for our clients’ eCommerce potential.

 

The potential for 30,000+ merchants currently utilizing Honey to convert PayPal’s 286 million users (as well as Venmo’s 40 million accounts) into loyal consumers is hugely beneficial for brands. Forrester recently released a new study on affiliate marketing that declares affiliate the number one vehicle for new customer acquisition and critical for eCommerce revenue growth. Perhaps no other news this year illustrates Forrester’s claim more than this acquisition.

 

Similarly, Honey’s personalization technology, a lynchpin of effective affiliate marketing, enables PayPal to further compete in a crowded landscape of customized digital shopping. This acquisition also showcases how the affiliate channel has grown from lower-funnel tactic into a full-funnel consumer marketing opportunity—all powered by consumer data. PayPal has traditionally been a purchase-phase-only machine, but with Honey, it will now be able to view consumer activity across the journey, as Honey tracks users from discovery to last click.

 

Expect this Trend to Continue

 

This monumental partnership — along with recent similar acquisitions, such as Groupon and Prodege – is just the beginning in the race of providing the best, most flexible shopping and reward experience to users. The future of the affiliate channel will focus on personalization and exclusivity, the less work the user must do to shop at their favorite stores and achieve the most considerable value, the more inclined that user is to come back and buy again. Today's consumer is savvier than ever, and the growth and innovation of our affiliate partners is needed to mature along with consumer needs and interests.