Welcome to the e-commerce marketing podcast, everyone. I am your host, Arlen Robinson. And today we have a very special guest, Matt Gillis, who has 20+ years of mobile, media, and technology expertise with a history of building and operating companies from startup to scaled global market leader delivering $1B+ in annual revenues. He spent the last 8 years prior to joining clean.io in the digital media industry leading the publisher platforms business at Millennial Media (which he took public on the New York Stock Exchange), AOL (post-acquisition of Millennial Media), and Oath (now called Verizon Media, which was the combination of AOL/Yahoo). He is also Married, with three great kids.
He is now the CEO of clean.io which is a digital engagement cybersecurity platform protecting user experiences, revenue and reputation for some of the biggest websites on the planet! Welcome to the podcast, Matt. That’s a heck of an intro.
Thanks, Alan. Glad to be here. A lot of problems. Super excited to talk to you.
Hope I don’t let you down. Man, this is lots of pressure with that intro. You’ve got the history to back it. We talked a little bit before we started recording that we kind of both, I guess you could say dinosaurs of this technology industry have been in it for 20 plus years, both of us. And so we see a lot of changes for sure, a lot of growth, a lot of changes in technology. But today, the topic of today, what we’re really going to be talking about is something that really haven’t got into before in the podcast, which is but is definitely, I think, a timely subject, seeing as right now, at least when we’re recording this podcast, we are in November, about the first week of November of twenty twenty.
And we’re approaching the holiday season of Cyber Monday, Black Friday, and you name it the Christmas holidays. And all of that is coming up. So all of these companies that are now e-commerce companies are looking to do anything they can to drive traffic and sales. And so today we’re going to be talking about brands and how can they protect themselves for unauthorized promo code use, because I think now is going to be a big time where people are going to be doing everything they can to use whatever promo codes they could find to get that discounts.
So you going to tell us some strategies to protect against that. But before we get into all of that, why don’t you tell us a little bit more about your background and specifically how you got into what you’re doing today?
Hey, Arlen. Well, yeah, you’re right. You can teach old dog new tricks. So glad to be here. Yeah. As you said, our company, Clean Darío, we are a company that protects digital engagement’s, as you know and everybody else knows who’s listening to this thing. The world has gone online. Content consumption is at a fever pitch. E-commerce is at a fever pitch. And, you know, we kind of take those big trends into account.
Obviously, there’s a lot of money that’s exchanging hands and that guys love to enter ecosystems where there is a lot of money changing hands. So we protect those ecosystems.
Our core business where we started was protecting publishers. And so some of the biggest websites on the planet count on clean audio to protect their user engagements, to protect their revenue and their reputation. And we’ve got some new products that we’re bringing into the e-commerce ecosystem that we’re going to talk about and similarly, that protect revenue and user experiences. Most of the stuff that we protect from happens because these open ecosystems on the Internet allow folks to really kind of inject malicious code into the experience and that can destroy the user experience and revenue.
So that’s where we play. As you said, I have a long history of working in digital media. And so, you know, I had empathy for these problems. I experienced it in my last life. And so what we’re trying to do is just make it easier for folks to earn money and run really profitable businesses. Well, that’s awesome.
I know you’ve got a lot going on with your business, and it’s exciting to see that you’ve been working with some of these biggest brands online to kind of protect their investments, so to speak. And I think, like you said, there’s a lot of things online these days that brands have to protect themselves against just because we’re still kind of in. No, I guess you can say wild, wild west of the Internet somewhat, because there’s a lot of things you can do without really any harsh repercussions as far as code, getting data, trying to take advantage of customers, you name it.
It’s still, I think, the Wild, Wild West. So it’s good to hear that you guys are on top of, you know, helping brands navigate through the crazy days. So we really want to start is kind of what I mentioned earlier as far as promo codes. So let’s just kind of start at the beginning and as far as like. Promo codes. What are they how are they typically use online and how really are they negatively abused in this e-commerce world that we’re in right now?
Maybe I’ll take one quick step back and kind of help your audience understand how we got to here, because we aren’t an e-commerce company by trade and it’s not where we started, but we started protecting these publishers from the harmful effects of advertizing, which is where bad actors will buy ads on websites that you’ll go to. And as a user, sometimes you’re scrolling on your mobile phone and all of a sudden it pops up and says, Congratulations, Arlen, you’ve won an Amazon gift card.
And you’re like, wow, I didn’t click anything and how did I get here? And, wow, I can’t get back. So that’s why we’ve gone out and we’ve solved that problem to start. And what we noticed was that we’ve got a bunch of customers that actually monetize through ads and e-commerce.
And one of our publishers started to see a lot of malicious activity on their site and we couldn’t really attribute it directly back to ads. And so when we started doing R&D on that problem, we started seeing a lot of what we would call client site injections from compromised browser extensions that were injecting code onto their website. And we kind of took another layer of the onion apart. What we noticed is that there are a lot of extensions that are not necessarily malicious, but they are what I would call untrusted.
And in that bucket of untrusted, I would call something like, honey, if you’ve heard of honey, honey is a Chrome extension or a Firefox or Safari extension, that when a user is at checkout, Honi will automatically apply coupons or promo codes to try and give that user who is already very far down the sales funnel and try and give them revenue discounts at checkout. And so we actually went down and spent a lot of time and energy R&D on this.
And and what we found when we talked to merchants, actually merchants were really frustrated with how Honi has kind of attacked the ecosystem, how they’ve got code on users computers that they can’t control. If you think about it, you own your website. Don’t you think you should be able to control the code that executes on your website? You know, that’s really what we’ve done, is we’ve built a product that gives merchants the ability to protect themselves from unauthorized code that executes on their website.
And we deem honey and the various other browser extensions as unauthorized as merchants don’t necessarily want that injecting code on the website. So that’s the product that we just brought to market that we’re in close beta with right now. Great.
Thank you for breaking that down and explaining how you got to where you guys are today and with the this whole concept. Because, you know, honey, is there not really the only player that’s in the space that are have extensions that will search and scour the Internet for promo codes and, you know, the use of that. And I think the average listener that’s listening and hearing that there may even be familiar with the those extensions may even have used them first thought you’re like, all right, you know, that’s really harmless.
It seems harmless because, you know, it’s just looking for these promo codes that maybe the brand put out at some point in time or that are actually available that could actually work on the website. So, you know, what’s the harm in using a promo code that the brand actually put out this job, that this app is really just saving time and looking all over the Internet. But I think the issue and what you brought up is just the fact that that’s actually executing on that particular brand website on their checkout page.
And it’s like that’s really not something that they intended to have happen. And it is amazing that apps like that are allowed to do that or have the ability to do that. And it’s just the way the Internet is right now. And, you know, I think it’s I think you’re right, players like you guys to stop that. And so that’s kind of I think what people are kind of initially thinking, but they don’t really realize that it’s not supposed to do that.
And I think another thing that I was thinking about as well is that some of those calls that it’s actually looking for maybe Coggs that the brand may legitimately put out, but they may have put out for the reasons maybe they had a give away or a contest and you had to do something to actually earn that promo code. It may still be available. Maybe they did for whatever reason, didn’t remove it. But you using that is kind of using it illegitimately.
You didn’t necessarily earn that particular code, but yet you’re in there on the with the apps about to use it.
So you’re spot on.
Yeah, we think the promo codes are a vital part of, you know, an e-commerce Virgin’s marketing strategy. You need to be able to use those to stimulate incremental sales. And you talked about the notion that the codes are kind of ending up in the wrong person’s hands. I was on a website yesterday and a code that honey popped in when I was at checkout was called Health Care Heroes Twenty. And obviously I am not a health care hero. And I imagine that that merchant was hoping that that.
Promo code would end up in the real heroes of this pandemic and giving them some relief and driving sales. So I think what you’re seeing is these promo codes are ending up in the wrong hands. It’s making it almost impossible for marketers to really measure effectiveness and efficiency of their marketing spend. As I said, I talked to merchants every day. Everyone’s got a little bit of a different story on their frustration with Honey and Wicky by and Piggy in the various coupon extensions.
Some folks use social media influencers as a part of their marketing strategy or ambassadors, as you may call them, where, you know, they give an exclusive code to someone who has an audience and they want to get that audience to come in and shop. And obviously what honey does is if it’s present on your computer, when you manually go in and type in a code at checkout, the first thing that honey does is it scrapes that code out of your checkout box and then it will reapply it if it’s the highest discount that can be had.
And so these codes kind of obviously in a very automated fashion, get swept up in, you know, then databased and then massively distributed.
And so what we’ve heard from many merchants is that if they’re working with influencers automatically, if they gave a high promo code and that’s the highest one available, well, then all of a sudden, you know, they saw a massive surge of sales tied to this influencer. And so now they’ve actually, you know, they’re losing revenue. Let’s just say it’s 20 or 25 percent off, which often these times they are.
And then they’ve got to obviously give a cut of all of those sales as, quote unquote, an affiliate fee to that influencer. So I’ve heard merchants say to me, like, listen, we partnered with so-and-so and the next day one was a health foods and vitamins store. And they’re like, listen, we partnered with this triathlete who had 25000 fans on Instagram.
And literally the next day that influencer drove like 40 sales and they were like, holy cheese. And the marketing people are like, man, we finally found the right influencer who can drive sales. And then two days later, sales doubled again from that guy. And then they’re like, oh, when they looked, it was actually Honi. So everyone’s got their challenges in trying to attribute them to the right channel. And hopefully it’s kind of that garbage in, garbage out that if you’ve got garbage in, that’s telling you what channels are working for you.
From a marketing strategy perspective, you’re going to make bad marketing decisions. And that’s kind of I think what folks have been telling us is that they just they want clean data. They don’t want to prevent users from promo codes because that’s a key part of their strategy. They just want to prevent them from being scooped up and then automated and compounded to every single order that comes through their store.
Yeah, that makes a lot of sense. That really is the bottom line is just determining the effectiveness of the strategies that you’re putting out there. And then any time you have these things in play, like Honey and the others, that definitely screws up your data and you kind of got to clean up there to really figure out how effective your campaigns are.
Well, I’ll tell you one, that’s even worse if someone was made. So we’ve got 20 customers that are on closed beta with us right now. They are a HomeGoods. They do rugs and wallpaper and a whole bunch of stuff like that. They actually you know, you talked about the exclusive code for someone. So they gave some exclusive codes out to interior designers because obviously they want interior designers to come to their site and buy things. And so they would give interior designers 50 percent off.
And what started happening is, is that wicky by an honey, we’re scraping those codes. And then all of a sudden anybody who comes to their site who’s got that software in the computer is getting 50 percent off. They actually had to start canceling orders because they couldn’t sustainably run their business when every order that was coming through on any given Tuesday was actually like reducing revenue by 50 percent. And so it created a customer service nightmare for them where all great intentions, let’s get interior designers to our site and talking about our site and telling folks about it.
But then when that code gets out to everybody, it just destroyed their margins and destroyed their profitability and destroyed their revenue.
Yeah, that makes sense, because with those codes, you know, it’s not the brand’s intention for every single person to use that. And then when you think about the hit that they’re going to take from the use of that, it can be pretty substantial now with what you guys are doing. And I guess just in general, how really do you protect your margins from the authorized use of these?
Houben’s, your questions, how can merchants protect or how do we help merchants protect?
Yeah, I guess both. You know, how how do you guys help merchants protect the unauthorized use of these coupons?
And, you know, and generally, are there any kind of best practices as well for merchants to be able to protect themselves from this?
I think most merchants like getting a hold of your promo code. Strategy is obviously very important. Getting control of that, I think is very important. As you said, like there’s probably tons of promo codes out there that somebody created a long time ago or, you know, I think from what I do hear from some merchant. It’s like creating a gatekeeper who owns promo codes is important, but often they’ll give those keys to the people who are in customer service that, you know, they’ll be able to create a code just to give to a consumer.
If they had a bad experience to try and win them back, then those codes are getting scooped up. So I think, you know, first off, it’s, you know, putting process in and getting control of your promo codes critical. You know, the software that we give ecommerce merchants really gives them a lens of what’s happening on their site. So it’s equal parts analytics and then equal parts protection. One, understand the code that is executing on your site at runtime, understand all of the discount extensions and who’s trying to implement codes and what codes they’re trying to pile on at checkout.
So really give what I would call a CT scan to the brand of what’s happening site. And at the same time, our software prevents the automated injection of those codes at checkout, which quite frankly, gives control back to the e-commerce merchants so that they know what code is executing on their site and blocking the stuff that they don’t really want executing on their site. To the end user, Honeywill still pop up. So if you have our software, honey still pops up and says, hey, Matt, good to see we’ve got five coupons.
Would you like us to attempt them? And what we do is we just prevent the injection so that the same screens pop up and say so the customer user experience is still the same and it resolves to a page that says, congratulations, you’ve got the best price. You know, we’re really trying to give the merchant the ability. And just the same way we do on the on the advertising prevention side with publishers is like give the website owners, the publisher or the merchant, the ability to own and control what’s happening on their website to make sure that their revenue is protected and to make sure that they actually they’re the ones who are ultimately responsible for the user experience.
Let them control that user experience.
Yeah, makes a lot of sense. And, you know, thank you for sharing the tips. And it’s interesting to see, you know, kind of what you guys are doing that. I mean, I can just imagine that that is super powerful, that I think more specifically for the brands that whose revenue numbers are a little bit high, where the unauthorized use of these types of promo codes can really make a difference in their bottom line. I think that’s kind of where it kind of comes into play.
I agree with you that obviously scale brings scale, but to me, any unauthorized coupon redemption is unauthorized, right? Like any time true one is getting a 15 or 20 or 30 percent discount. I mean, I have had personally, I’ve seen discounts as high as 50 or 75 percent.
So I think it doesn’t matter to anybody who’s getting it is unauthorized and it’s costing you revenue and it’s costing you margin.
And so what I would say to merchants is that get control of it, because this is actually one of the only ways that you can grow revenue without growing your sales.
Right, like, you do not need to drive incremental sales and you’ll drive incremental revenue with software like ours. And so I think like if you can take control of that, that’s great. And by the way, if you do that, let’s just imagine, you know, we’ve had merchants tell us that they’re losing any anywhere in the neighborhood of like 10 percent of their overall revenue to these coupon code extensions that are kind of running wild. And one merchant that I talked to did about 15 million dollars of revenue online last year.
They recounted that in the month of August, they had a code that cost them in the neighborhood of one hundred and fifty thousand dollars in revenue reduction. So think about that. If you have a code that’s run wild, it’s costing you 10 percent of your overall revenue. Imagine if you could stem that and not only stem that, imagine if you actually then went out and spent that hundred and fifty thousand dollars on real campaigns driving real incremental revenue and real net new customers to your site.
What an amazing impact that could have. So I think this is just quite frankly, it’s water that’s leaking into the boat that I think folks get control, that then they can actually partner with companies like yours and really go out and grow incremental sales.
That makes a lot of sense. I can definitely see how much of an impact I can definitely make that you have control of that kind of speed. Getting control of this kind of whole situation in these promo code campaigns with specific analytics should really be monitored whenever you’re doing a promo code campaign to ensure that your campaign remains healthy. Because I know you cited that one example of the triathlon company, they saw the big spike. At first it got excited, but then, you know, unfortunately, it became detrimental to them.
And so which specifically should you be looking at to see if you’re being taken advantage of? I think most folks are really good in this space that testing new things. So I think you should always be running tests. And I think when you see data that looks a little wacky, you should question it. You know, if you’ve got a high percentage of your orders coming through that have promo codes, I would analyze what the promo codes are, where they’re coming from.
I would do things like shut promo codes off and see if another promo code picks up very quickly. Right. If that happens, then you’ll know that you’ve got, I think, a problem with the coupon extensions. And by the way, honey was bought by PayPal for four and a half billion dollars. Whitesell, this thing is not going away. All right. So like this thing is and by the way, that was in the last year.
This is only going to become a bigger problem. And just pay attention to what you see. I mean, obviously, we’re in the ads business as well. Like I see honey advertising constantly to drive net new users. So they’re going to spend a ton of money to drive user acquisition and further entrench this thing. Honey currently works as they advertise on about 40 to 50 thousand websites, so it’s only going to get bigger.
So I think you’ve got to really pay attention to your promo code strategies and to where redemption is coming from. And again, like when you create codes and you see them take off, you should question it. Often folks like to celebrate it because you want to look smart and you want to look like you made a great marketing decision. But I think question everything.
Yeah, definitely. That’s really the main thing. Question everything. And it’s like you said, it’s kind of like the age old thing when it comes to what they always tell salespeople, which is always be closing in this game. You should always be testing, as you mentioned. So they beat the ABC. So you always be testing, testing your clothes that you’re using and then going back. And I think I think what a lot of brands fall victim of is creating these codes that have no expiration date and just continually creating them.
And the way the Internet is right now, if you have these codes associated with certain campaigns, you’re doing certain blog posts. You know, all of that stuff gets picked up by Google eventually and gets fired. And once it’s in there, all people do is when they get to the checkout page, they flip over to Google, they start typing or they use they’re using honey or whatever. They start Googling promo code for this particular brand and then they just go down the list and start trying stuff.
So you got to get control of them for sure. Now, as you get ready to wrap things up, what are some businesses that you’ve dealt with or you have experience with that have implemented any of these mitigating steps to protect their margins?
So if you go to block coupon extensions, dotcom, you’ll see more information about our products. Right now, we’ve got 20 different merchants that are using our product in a closed beta merchants that range from direct to consumer brands, food and beverage brands, sporting goods brands, cosmetics brands, automotive brands. So we’ve got a real wide range of brands across the Internet, predominantly Shopify plus. So we’re kind of right now we’re focused on Shopify plus merchants, as is where we’re really starting and we’ve got a handful of other enterprise customers.
I think the key thing is, is we’re in the early stages. We’ve been in in closed beta now for. Or I would say about the last 90 days, learning a ton, understanding the ecosystem, understanding how everything works and really getting to those baseline data reports back to our merchants so that they really get a good understanding of what’s happening on their website. So tons of different businesses will be probably going to geia general availability in Q1 of 2021.
So depending listening to this podcast, this is early November of twenty twenty. But if you want to get in on our closed beta, you can go to block coupon extensions, dot com and you can sign up there and we’ll reach out and figure it out together. But I think there’s a lot of unknown. I think it’s kind of crazy that everybody owns these websites and they just don’t know what’s happening on their websites at runtime, looking to dig, digging in with any kind of merchant that wants to learn more about what’s happening on their website.
Yeah, that’s good stuff.
And I wish you guys well. Definitely, as you transition from the beta to the general availability, I know once you have the brands and the general availability period, you guys are going to start gathering a ton of data and what’s working, what’s not. And I know one of the things that as being a kind of a veteran in the Internet technology space, one of the things that we were constantly seeing is things that we have to become compatible with because there’s so many different these days, e-commerce, shopping cart and order providers and payment providers and systems that you got to be familiar with and you got to figure out how to tie into it.
I know you guys are probably in that same situation to figure out how to combat against the use of this unauthorized use of promo code. So, yes, that’s good stuff. And I definitely wish you well. Thank you, of course, Matt, for being on today. I’ve learned a lot. Like I said, this is an area that we hadn’t really got into. But it’s definitely a concern for, as you mentioned, any business because any unauthorized use of a promo code is something that it’s tying into a business’s revenue.
And that’s definitely not good. But what I like to always do to close out the podcast, just so our audience can get to know you just a little bit better, is if you don’t mind sharing one fun fact about yourself that you think our audience would be interested in knowing about yourself.
We were talking before the podcast. I told you, I’m from Toronto, Canada. I live in Baltimore now. So our company is based in Baltimore. But growing up, I had probably one of the greatest jobs. I was a bat boy for the Toronto Blue Jays when I was 17 years old and. Oh, wow, forgot to be in the clubhouse and in the dressing room and on the field in those years right before the Blue Jays won the World Series back in 1990 and 91.
So, OK, that’s good stuff there. Seventeen as a bat boy right in the crux of a championship team. Yeah, I don’t think it gets any better than that. That’s good. Man in the steroids era is when I was a bat boy. They got Mark McGuire. Barry Bonds. Yeah, right. So you were right there. Front and center are seeing those guys knock it out of the park.
Yeah, lots of fun. Good stuff, man.
Thank you for sharing that. And I definitely appreciate you coming on today. And lastly, you know, if any of our listeners want to get in touch with you to pick your brain any more about this whole promo code space and protecting their websites, what is the best way for them to get in touch with you? So our website is clean.
Oh, and my email if you want to hit me. Matt Matt at Clean Galkayo, reach out, hit me on LinkedIn, send me an email any which way you want to communicate with me. It would be great and I would love to help anybody out who’s struggling with this or even just has more questions about honey and wicky by and the acute nature of the problem that we think it’s only going to get worse. Right.
We have thank you for sharing that. And I definitely encourage our listeners to reach out to you and see how they can get in to alleviate this issue, because I know it’s definitely going to be a problem for e-commerce businesses and something they definitely need to come back. Thanks again, Matt, for joining us today on e-commerce marketing podcast.
Thanks, Arlen. Thank you for listening to the E Commerce marketing podcast.
CEO of clean.io