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.
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.
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.
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.