Like a certain social network that came before it, Pinterest already appears to be doing a few things behind the scenes.
CNN reports that the popular virtual pinboard social network site has been “appending affiliate links to some pins,” particularly those featuring goods from Amazon, eBay, Target and thousands more merchants. If someone clicks on one of those affiliate links and buys a product featured in one of the pins, Pinterest makes money. But no one would have known this if the following blog post on LLSocial.com had not appeared.
Shortly after LLSocial.com’s original post, Josh Davis wrote a follow-up post entitled “What was learned from the Pinterest link modification story.” He lays out the main reasons why Pinterest started doing what they are doing. It’s quite simple, actually.
Pinterest’s TOS pretty much allows them to do anything they want with users’ pins. This is not surprising. The question now is, how many users actually read the terms of service before signing up for Pinterest? As LLSocial.com points out, Pinterest’s broad language makes it easy for them to rationalize using content on the site as they wish:
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
Pinterest isn’t legally obligated to disclose their affiliate link modification. It uses Skimlinks, and CEO Alicia Navarro is quite upfront about that. Says Navarro:
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.
In other words, Pinterest is acting as the vehicle for traffic, much like Reddit or Digg. Should Pinterest have disclosed its affiliate links? Probably. But if it had, users would have been suspicious. As LLSocial writes, link modification as a form of monetization is “unobtrusive, provides revenue, and really only affects retailers and those who want to pin affiliate links on Pinterest for their own profit.” Still, most people who responded believed that Pinterest should have been more clear about their practice. Navarro states that Pinterest has been using Skimlinks for over a year, and that this has always been a form of monetization.
Pinterest has been picking up steam, quickly becoming the Web’s hottest new social network. It utilizes the interest graph – you pin stuff you like, and cluster around other users who have the same interests – whereas Facebook is more focused on the social aspect. Just like Facebook makes money off of its personalized ads, Pinterest needs to have some sort of revenue stream. But if Pinterest had disclosed this from the start, would it have made a difference?
“Were they purposely being murky and not transparent? It’s possible,” CEO of strategy firm Webmedia Group Amy Webb told CNN. “I would think that they would let people know from the beginning that things they’re posting potentially carry affiliate links. But it’s a free network. No free network carries zero costs.”