Monthly Archives: February 2012

Reaction to Pinterest modified affiliate link story followup

What was learned from the Pinterest link modification story.

Additional Update (2/15)Pinterest adds disclosure about how they (might) make money, my error about Skimlinks and a conversation with the Pinterest CEO.

My post on Pinterest quietly generating revenue by modifying links to add affiliate codes got much more coverage than I ever could of imagined. 35,000+ unique visitors in 36 hours and write-ups in most of the bigger online social/tech publications including the New York Times, CBS News, Tech Crunch and two posts by Mashable. The number of follow-up stories and discussion led to some confirmations as well as new insights which I want to briefly share here.

Pinterest’s terms of service pretty much allow them to do anything they want with users’ pins.

Sarah Carling  posted a key part of Pinterest Terms of Service in a comment on my previous post:

you hereby grant to Cold Brew Labs a worldwide, irrevocable, perpetual, non-exclusive, transferable, royalty-free license, with the right to sublicense, to use, copy, adapt, modify, distribute, license, sell, transfer, publicly display, publicly perform, transmit, stream, broadcast, access, view, and otherwise exploit such Member Content

I don’t particularly fault Pinterest for  such broad language. It allows them flexibility in deciding how to continue to develop their service in the future. This is true both in terms of how they display images and how they make money.

Pinterest isn’t legally obligated to disclose their affiliate link modification.

No lawyers jumped into the discussion, but I think this comment  by Tricia Meyers  accurately conveys the consensus from reaction across the web.

It is not illegal. There are guidelines about posting endorsements of items and then including affiliate links. But, in my opinion, Pinterest is not endorsing the items–users are.

Alicia Navarro the CEO of Skimlink commented as well with her interpretation:

With respect to FTC rules on disclosure of affiliate links, the law is that any content creator that is *endorsing* or *recommending* something and obtaining financial benefit as a result of this endorsement, needs to disclose it. In this case, Pinterest are not pushing people to buy something because they get paid for it, they provide a platform that drives traffic to retailers and they are being rewarded for providing that service.

Pinterest users like the idea of modified links, but they would love it with disclosure.

Almost universally, commenters seemed in favor of  link modification as a form of monetization. It is unabtrusive, provides revenue, and really only affects retailers and those who want to pin affiliate links on Pinterest for their own profit. Some thought my original post was absurd, and there was no story, but most commenters thought Pinterest should have more clear disclosure of the practice. There are over 50 comments on my original blog post to get a feel for reaction, and it is also worth checking out Hacker News for some detailed discussion of key issues. Reddit was late to to pick up the story, but there is some active discussion. If you want to see the reaction on Pinterest itself, there are a few comments from people pinning my original blog post.

A very similar situation happen to Posterous in April of 2010.

An almost identical link modifying system was implemented by Posterous just under two years ago. They too didn’t disclose, but apologized once it was made public. The comments at Hacker News seem very similar to the reaction to the Pinterest story. Obviously modifying users’ links on a blog platform is much different then modifying pins which are rarely original content.

Pinterest has been using Skimlinks from the beginning.

Note this section was added at 3:40 PM EST.

Adrianne Jeffries of BetaBeat interviewed Skimlinks CEO Alicia Navarro. Alicia persuasively answers my objection to retailers being the only one’s who may dislike affiliate links being inserted or links being modified. In addition, Alicia makes several surprising statements that indicated in no uncertain terms that Pinterest has used Skimlinks from the beginning. That would mean Pinterests use of Skimlinks has been going on for over a year. She states:

Pinterest has been using Skimlinks from the beginning, it is the same as any other web site that uses affiliate marketing.

and

Another way of putting this: retailers have never had this traffic for free, Pinterest has always used this form of monetization, and it is an incredibly valuable service that merchants should be delighted to pay for.

More interesting reads related to the Pinterest affiliate link story.

Digital Trends decided examined how alternatives to Pinterest are using modified links for revenue and how they disclose it.

The Skimlinks CEO has been active in commenting on the story including writing a blog post.

Tech Crunch wrote about why they think the real story here is the power of Skimlinks as a revenue generator.

Pinterest is quietly generating revenue by modifying user submitted pins.

Additional Update (2/15)Pinterest adds disclosure about how they (might) make money, my error about Skimlinks and a conversation with the Pinterest CEO.

If you post a pin to Pinterest, and it links to an ecommerce site that happens to have an affiliate program, Pinterest modifies the link to add their own affiliate tracking code. If someone clicks through the picture from Pinterest and makes a purchase, Pinterest gets paid. They don’t have any disclosure of this link modification on their site, and so far, while it has been written about, no major news outlet has picked up on the practice or its implications.

Pinterest doing this is big news in my opinion for two reasons:

  • Pinterest is monetizing their site while in the early beta stage, which is almost unheard of for a newish social network.
  • Pinterest has taken this action in a quiet, non-disclosing way.

How long this has been going on isn’t clear, but it has been at least a month as Lindsey Mark wrote a blog post that mentioned it on January 5th. In my case, I saw a tweet from from fellow Lawrence social media user Debbi Johanning that linked to an article Why I Don’t Mind Pinterest Hijacking My Links. That blog post was based on a post by Joel Garcia on an affiliate marketing blog which pointed out the practice, but also explained that if an affiliate link was in the original pin, Pinterest wouldn’t modify it.

How Pinterest modifies its users’ links.

An example of Pinterest adding an affiliate link to one of @free’s pins.

Pinterest is able to do this across their site by using the service skimlinks. This service is rather innovative in that they automatically go through a site and add affiliate links wherever there is a link to a product that has an affiliate program associated with it. While many forums, smaller web sites and even Metafilter have taken advantage of the service, I have to think that the volume of links skimlinks is modifying for Pinterest, has to make Pinterest their biggest client and perhaps the majority of their business. skimlinks makes money by taking 25% of any affiliate revenue generated.

Pinterest is taking the unique path of generating revenue early.

Historically large social networks have focused on user growth with little regard to making money. Twitter and Facebook went years before doing any advertising, and more recently, popular services like Instagram and to a lesser extend Path are almost dismissive of how they are going to make money. The idea of growing big and figuring out the business later is dangerous for small businesses, but in the world of venture capital, it is absolutely the norm for rapidly growing web sites and services aimed at consumers.

That Pinterest is breaking from this mold, and getting revenue while it is still technically in beta is news on its own. I wrote previously on how Pinterest could be the most valuable social network for retails sales, and in Pinterest’s case, they have found a relatively easy solution to start capturing the value of the network before they even leave their beta phase.

How they are doing it with no disclosure to users feels weird.

As most bloggers are aware, when you use an affiliate link in your post, you need to provide some type of disclosure either by it clearly being an ad, mentioning it is an affiliate link or at a minimum providing some type of prominent disclosure that your site features affiliate links. This is done, because you have a financial interest is promoting the product.

In Pinterest’s case, since they are not creating the content and are inserting the links automatically, they might feel that they are not promoting affiliate linked pins any more than other pins, and thus they don’t need to disclose as the placement is not affected based on the financial gain.

skimlinks own site has a FAQ section about disclosure, and it would seem their own recommendation would be that Pinterest make a disclosure.

We encourage our publishers to disclose to their users and comply with the FTC regulations which state… “When there exists a connection between the endorser and the seller of the advertised product which might materially affect the weight or credibility of the endorsement, such connection must be fully disclosed”.

When using our URL Shortener to include product recommendations on Twitter, we have provided some disclosure guidelines here.

You could also add disclosure to your site by joining our Referral Program and using one of our disclosure badges.

One specific, problematic issue is that when individual online stores pin their own content, it is unlikely they would insert an affiliate code. But if the store has an affiliate program, it is highly likely that those links now will have an affiliate code in them that gives Pinterest a percentage of any sales. Not disclosing this modification is putting individual stores at a disadvantage when they and their customers are putting in the work of adding pins.

I, like many people, don’t have a problem with Pinterest making money off of user content. The links are modified seamlessly so it doesn’t affect the experience. Pinterest likely should disclose this practice to users even if they aren’t required to do so by law, if only to maintain trust with their users.

Do you care that Pinterest is modifying your pins? Do you think they should disclose it to users? I would love to hear your thoughts.

 

Small business owners where many hats.

Wearing many hats; a small business owner’s roll.

I am not sure many will find this post particularly interesting. It is a little on the narcissistic side of things. I tried to highlight some universal advice when possible, but fair warning, it really is just an examination of some of my strengths and weaknesses, and how they apply to business, and I guess a little bit to life in general.

I have increasingly been spending much of my time working on @free. As I continue to shape it into what I hope is a successful business, I find myself having to address a common small business owner’s problem . . . doing everything.

When you have to do everything, you quickly start to pick up on what you excell at, what you can do, and what will be a struggle. As with anything, it is never absolute with only strengths and weakness, but I have broken it down largely in that way as I could write forever about every nuiance if left unchecked.

It is hard to talk about one’s greatest strengths without feeling self conscious or boastful, but if you read to the end, you will see my weaknesses are many.

Strengths:

Curation

I have been involved in curation one way or the other since I first got on the Internet in 1998. While I don’t agree with most of his political views, Matt Drudge was one of my early inspirations on the Internet. The idea that he would spend his whole day finding the most interesting articles on the Internet and then sharing them in one place was fasinating to me.

I have been inspried by and have practiced curation since I first got on the Internet. My first effort was the web site Documentary Films .Net. I sold the site late last year (2011). But from 1998 to 2005, I routinely used this site to curate information I could find on documentary films. I also was paid to do curation as a community manager from 2003-2009. I enjoyed it, and I did it over and over. This has all led to an understanding of curation at a high level.

Twitter lends itself to curation, and I think that is why I enjoy it so much in addition to…

Conversation

I like people. I find them interesting. Even if someone is talking about something I am not particuarlly interested in, I know that they have a story or life experience that I would enjoy hearing about. I say this not to make anyone who has a conversation with me self conscious. I do this all intuitively, but I do enjoy conversations, and so people who are also good at it, I naturely gravitate toward.

Evaluation

This comes with multiple exposures. The more people you interact with both in person and online the more you begin to pick up on patterns and cues. Thankfully, we all are unique in our own ways, but I do feel I am a decent judge of character. This has allowed me to work in industries were trust and hand shake deals are frequently the only commitment. Being able to work with someone you never met and actually do business, is an increasing advantage in the online world.

In the middle:

Hobbiest Mentality

I don’t consider doing something fun, work. This is likely true for you as well. Most of the best job advice tends to focus on doing something you like as one of three pillars of having a rewarding job (the other two are working with people you like & getting fair compensation for it). What is less discussed is that almost anything worth doing requires at least moments of working on things that you don’t like. Even if you have a team to outsource a task to, you still have to manage them, and very few people feel like management is fun.

Inquisitiveness

I like to learn. I find most topics interesting. For a long time I took most of this information as an input, and did little to output it aside from conversations with friends and the curation I mentioned previously. Learning for learning sake certainly has value, but greater understanding generally comes from doing. I straddle this line frequently.

Weaknesses:

Not proud of it, but in full disclosure, here is a picture of me at my desk last Fall.

Organization

My office is chaotic: notes everywhere. As I duscussed in my blog post on Evernote, I have been trying to give up on physical notes. I have a pile of notes a foot high that are so overwhelming and unorganized, that it is highly unlikely I will ever look through them. I now type all notes I take, however small, in Evernote. At a base level I can always search to find what I need. And every couple months I will take a whole day to organize all my notes including consolidation multiple pages into one. A lack of organization can make achieving complex goals difficult. In the past two years, I have started to use a variety of techniques to learn better organization. Trello is a helpful organization tool, and Google calender has helped me better organize my time.

Sales

I am all about the soft sale. I certainly will go for what I want, but I have a high threshold when it comes to imposing something I am working on, on someone else. I will say that over time, I have gotten better at this, but I don’t forsee myself every surviving in a sales job.

Web Development

While I love the Internet and have for years, that love has not transfered into deep understanding of what powers it. I can create a basic Word Press site or signup for a DIY style blog, but I don’t write code, I just fiddle with it.

Focus

I live in my mind at times. I believe that many people do this, but I have to check against neglecting all aspects of my life to focus on the one thing that I find interesting in the moment. Even this blog suffered last year as I spent more of my time on @free. As I have gotten older, I have learned that with a little discipline and some outsourcing, I can now manage more than one part of my life at once. Want to know how you can successfully achieve a huge goal that seems unattainable? Neglect all other parts of your life. It isn’t healthy, but I have certainly done it at times. This double edge sword is something I work with on a daily basis.

So ends this highly personal blog post. If you made it to the end, perhaps you consider some of your own strenghts and weaknesses, and how you can continue to build and improve on them respectively.