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What was learned from the Pinterest link modification story. | LL Social

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.

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11 Responses to What was learned from the Pinterest link modification story.

  1. avatar sarainitaly says:

    They provide a free service, a site I am addicted to, so I don’t see the big deal in making some money off of links.

  2. avatar Nick S. says:

    I appreciate the knowledge, but I don’t see the big deal, either.

  3. avatar Ronda says:

    I think the big deal is the non-disclosure to users. Will most users care? Probably not. But do they want to know that Pinterest is using their own users’ curation to make some cash? Yes, I think so. And I also think the big deal is what TechCrunch pointed out–the power of SkimLinks to be a revenue generator. It seems like a non-intrusive (to the user) rev gen model that goes beyond annoying ads. That will likely be terribly appealing to businesses.

  4. A really well-balanced follow-up, thank you and well done! It was frustrating to read so many people misunderstanding an industry that is mature, respectable, and the life-blood of so many websites, especially when the real message behind the story is that it is fantastic that sites are thinking about monetization early on, and doing so in clever unobtrusive ways. Really appreciate you making the effort for such a fantastic follow-up article!

    Alicia Navarro
    CEO – Skimlinks

    • avatar Josh Davis says:

      Alicia,

      Thanks for all your comments and clarifications on this story.

      I really believe, since Pinterest chose not to comment, that you provided some greatly need clarity to the situation.

      When I have the traffic on @free (http://www.FriendsOfFree.com) to justify it, I plan to try out your service, and of course… I will disclose it. ;)

      Josh

  5. Ok, now I don’t feel so bad after pinning some of my own products on my Pinterest boards!

  6. Perhaps it’s not a terribly big issue, but I thought we all learned about transparency some years ago. Now’s not the time to backslide. So shame on Pinterest for that. They certainly haven’t engendered trust in their brand. It’s silly that they wouldn’t disclose something no one would have cared much about — except that they didn’t disclose it. I’m glad they’re making money, however, because it means I can keep pinning. A double-decker bus couldn’t keep me away from pinning!

  7. avatar Erin Ely says:

    I’m not opposed to it, monetizing the site has to be done and this does seem like a pretty unobtrusive way to do it… my issue is with the lace of transparency and disclosure.

    You have to make money to stay in business, there is no argument with that. Transparency is key.

  8. avatar Bill says:

    The fact that this knowledge is now so widespread means Pinterest will see a plethora of competition begin to emerge. This competition will no doubt offer commission to ‘Pinners’ making it a more attractive option.

    The fact they didn’t offer this from the beginning and that three guys specifically made a site to target women and give them somewhere to “organize and share all the beautiful things you find on the web… plan their weddings, decorate their homes, and organize their favorite recipes.” seems a little wrong to me.

    People seemingly invest a lot of time in the content they choose to pin and these guys are sitting there with their feet up making money off the back of others efforts. Nothing wrong with that if your users are aware of and happy with it, but keeping it a secret taints things in my opinion.

  9. avatar Mike Troiano says:

    Nets down to no big deal. Glad they’re doing it, in fact, because it means they’re more likely to stick around.

  10. avatar sanja says:

    Well I was wondering the whole time since hearing about Pinterest about another issue that no one seems to care about: copyright infringements. Pinterest actually encourages users to pin pictures from web, but by the law you always need owners permission when using someone else’s content; be it text, pictures, poems…I know many don’t mind because it drives traffic to their websites. But ask artists how they feel about it! Why do you think CC was created ( creative commons license ). If you ask me it is completely illegal what most of the Pinterest users are doing ( copping pictures from web or repining them ) and Pinterest too because they support and even encourage it!
    Other than that, I actually like Pinterest.