Tag Archives: disclosure

Groupon Affiliate Program Pin to Pinterest

Groupon is the first merchant to facilitate & encourage their affiliates to pin on Pinterest.

In the last month there has been a considerable amount written about affiliate links and Pinterest. While Pinterest did use Skimlinks to modify user submitted links to add affiliate codes, they stopped that practice even before my initial blog post on the subject.

Today a Groupon Affiliate manager sent an email to affiliates encoraging them to pin Groupon offers to Pinterest.

Anytime you see a deal that you’d like to pin to your Pinterest boards, all you need to do is click the button, and it’ll get pinned with your affiliate tracking intact!

From the Groupon Email

This is accomplished by using the Affiliate Link Generator bar. Affiliates sign into their Groupon account and then can share directly from the offer page to a variety of social networks with just one click. Now Groupon has added Pinterest into the mix.

Your affiliate tracking link will be passed through, and anytime someone re-pins your pin, your affiliate tracking link will remain intact! Don’t forget, we have a 30-day cookie as well, so even if someone doesn’t buy what you pinned, you’ll still get credit for any purchase they make within 30 days of your initial referral.

I spent 30 minutes searching Google for affiliate programs that encouraged pinning, but I didn’t find any. As a personal user, I am not thrilled that the pins I see will now be influenced by affiliate programs, but at the same time, the follow/unfollow model of Pinterest means that I am never more than a couple clicks away from unfollowing someone who posts excessive affiliate links. In addition, the email from Groupon did at least show an understanding of how Pinterest works. It began:

I am, admittedly, a Pin-aholic. I’m pretty big into sewing and crafting, so Pinterest has been a great place to consolidate my inspiration. I also set up a board where I pin pictures of places I’d like to visit, and as it happens, quite a few of those places are culled from Groupon Getaways.

So I thought, wouldn’t it be great if I could pin a Groupon Getaway onto Pinterest, with an affiliate link intact? And that’s when we came up with the idea to add a Pin It button to our Affiliate Link Generator!

Most commentators believed that Pinterest was not at legal risk for their decisions to not disclose affiliate links being put into pins. The thinking was that Pinterest was not uniquely promoting monetized content over other content. That isn’t the case with affiliates using Groupon. They do have a financial incentive, and the email that was sent by Groupon didn’t encourage any type of disclosure of the financial relationship. Using Pinterest as encoraged by Groupon could put individual affiliates at legal risk.

 

Pinterest adds disclosure about how they (might) make money. Conversation with Pinterest CEO.

Ben Silbermann, the CEO of Pinterest, called me this morning after reading my story on copyright issues. While he didn’t want to go into detail about how they will continue to address that issue, he did provide me with his take on the affiliate link modification story.

Ben told me that it was never Pinterest’s intention to be deceptive. He indicated that the use of Skimlinks was a test, not a business plan, and that Pinterest had stopped using Skimlinks a week before I wrote the original story on the subject.

My Error

The image I provided with the original story actually showed a piece of code that didn’t relate to the Amazon’s affiliate program. At least one reader commented on my blog that the link I listed wasn’t an affiliate link, and several people emailed me indicating that they couldn’t replicate the link modifications when posting pins. This makes more sense now, as Pinterest had stopped using Skimlinks a week before I published the story.

Pinterest’s silence on the affiliate link story.

Despite the popularity and reach of the Pinterest, the compnay only has 16 employees and the vast majority of them are focused on development issues. Ben indicated that Pinterest is still figuring out how they best want to respond to issues as they come up.
A Google News search of the term “Pinterest” returns hundreds of stories and guides each day about the service. Ben indicated that Pinterest wants to be transparent, but as a startup trying to continue to develop a compelling product, their team doesn’t want to be constantly reacting to every new article or story about their business.

Pinterest has updated their site with a disclosure.

In order to provide transparency and clarification going forward, Pinterest added a new section on their help page to address any possible future questions around the monetization issue. The new section is called “How does Pinterest make money?”:

Right now, we are focused on growing Pinterest and making it more valuable. To fund these efforts, we have taken outside investment from entrepreneurs and venture capitalists. We’ve tested a few different approaches to making money such as affiliate links. We might also try adding advertisements, but we haven’t done this yet.

Even though making money isn’t our top priority right now, it is a long term goal. After all, we want Pinterest to be here to stay!

Skimlinks was not a monetization effort, but it was testing.

Ben stated to me, “Our focus right now is not on monetizing, but we have tried a few things out to better understand how people use the service. We want to be a profitable company, but we want to make sure whatever model we eventually use, works with customers. We haven’t decided on one way to do it.”

Ben indicated that Skimlinks was more about testing how people used Pinterest rather than a long-term plan for monetization. Using Skimlinks, Pinterest was able to test a number of things including whether users would make purchases when linked to from the Pinterest site.

In the end, most Pinterest users, who were aware of the link modifications, wanted some type of disclosure, and they got it. Whatever route Pinterest ends up taking to a sustainable business model, it seems they have taken the approach that users need to be aware of some of the behind the scenes testing that may go on in the process.

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.