Pinterest: Quietly Making Money From Your Pins?

Pinterest, the darling of the web

It’s no secret that I, like just about everyone else on the planet, am in love with Pinterest. But in conversation over virtual coffee this morning, my very erudite friend Daniel E. Agee pointed me to a post by Josh Davis that got me to thinking about the way Pinterest is quietly monetizing the links posted there in a way that I’m not sure I love.

Don’t get me wrong, I’m all for startups making money – especially startups that I really like and enjoy using. What I might not like as much is the thought that someone is modifying links that I post and adding their own affiliate code to it, and making money as a result. I’m thinking out loud here, so bear with me. It’s not the making money part of the equation that gives me pause instead it’s the doing it without any disclosure that annoys me.

As an aside, I was reading about Path, another startup darling, the other day and noticed some uproar about the fact that the service apparently uploads your entire iPhone address book on its servers. Blech. I remember my immediate thought was “Oh no, that sucks. And I really liked Path, too. Too bad they’re not as cool as I thought.” The danger here is that when it comes to consumers, perception is reality. And my immediate perception upon reading the Path news was that what they were doing wasn’t cool and that I might need to rethink using the platform. And I’m sure I wasn’t the only one who felt that way. Therein lies the danger for brands and failing to think their TOS and disclosure policies through before publishing them.

I kind of feel the same way about the news about Pinterest. The news? In a nutshell, if you post a pin and it links to an ecom site that has an affiliate program, Pinterest modifies the code using a service called SlimLinks (which is essentially a slick affiliate marketing technology) and gets paid when anyone purchases. It’s not that I mind Pinterest making money, it’s that I just wish they were up front about it, so that when everyone is extolling their virtues, I’d have a clearer picture of who they are, what they do and why it makes sense and, most likely, why I don’t have a problem with it.

Here’s a for instance. It you post a pin to Pinterest from Amazon that’s some really cool product you want to buy, after you make the pin, the Pinterest team (probably more likely SlimLinks peeps) slide in and modify the link to include their affiliate code. Ergo, anyone who clicks on your pin and ultimately makes a purchase results in money being put into Pinterest’s pocket. A bad thing? Not necessarily. I’m cool with affiliate links. I’m less cool with not knowing it’s going on.

I’m thinking here about the strict requirements for bloggers on disclosure and can’t help but wonder how this kind of disclosure isn’t something that’s required of SlimLinks and Pinterest with regard to this cozy relationship. In fact, considering the great lengths that I and other bloggers go to to make sure we disclose everything, it really kind of hacks me off.

And knowing about this relationship also explains a lot about Pinterest’s growth to me. comScore reported that Pinterest just hit 11.7 million monthly unique visitors, getting to that 10 million mark faster than any other standalone site in history. Holy catballs! And Shareholic’s recently published report shows that Pinterest is referring more traffic than Google+, LinkedIn and YouTube, combined. Double holy catballs!
Pinterest Referral Traffic as reported by comScore

Everything I’ve been reading talks about the totally organic growth of Pinterest and how amazing it is, but I think that this affiliate marketing twist might just have something to do with that growth. Am I crazy? In my experience, affiliate marketers are pretty smart – and a lot like piranhas. When they see an opportunity, they dive on it. And I understand – and appreciate that. But I would venture a guess that part of the reason for Pinterest’s exploding growth is not only because users think the site is fun and cool, it’s because affiliate marketers are mining every opportunity to make money through linking. Doesn’t it only make sense?

As an agency, we’ve been paying a lot of attention to ways that businesses can potentially use Pinterest, and we’re not alone on that front. If you want to know more on that, read this comprehensive post from SocialMouth’s Francisco Rosales, Pinterest: Everything You Need to Know is in this Massive Post.

But when I’m advising clients on the benefits of using Pinterest, I need to know all the facts. And this affiliate code fact is a doosie. In fact, it could be a great way to convince a client engaging in ecommerce to take a chance and experiment with the site. But I can’t evaluate what I don’t know about.

What do you think? Is this something that consumers (and Pinterest lovers) won’t really care about and it’ll just be geeks like me who are annoyed by this. Or is it a privacy issue that users of the site (many of whom are bloggers who are bound by disclosure requirements) might actually care about? Would love to hear your thoughts.

  • Wendy Piersall

    The FTC only requires a legal disclosure when an affiliate link is used in conjunction with an explicit endorsement by the person who will benefit monetarily from the resulting sale. So Pinterest is acting legally by doing this, and it is in their TOS that they reserve the right to do stuff like this.

    That being said, I think it’s skanky of them to do it without being more up front with their users. But I guess not skanky enough for me to stop using their site! :/

  • http://twitter.com/allenmireles Allen Mireles

    ‎”By making available any Member Content through the Site, Application or Services, 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 only on, through or by means of the Site, Application or Services.”

    I am not sure that I would have read that to mean taking an affiliate link that I pinned (not that I have or plan to pin affiliate links. Just for the sake of argument) and converting it to one that pays Pinterest instead of me. I think the subject of how terms of service agreements are written is one that bears further scrutiny. In any case, this will be interesting to see play out…

  • Anonymous

    I agree with you Allen .. funny how TOS agreements are so often written in language that is vague – like this.

    Like I said in the post, I don’t really mind Pinterest doing this, I just wish they’d been a little more up front about it.

    It might actually drive even MORE business if marketers like me, who work with companies with ecom sites, knew about it in a more clear fashion!

  • Anonymous

    Wendy, I do so love it when you use technical terms like “skanky.” A girl after my own heart. And please don’t quit using Pinterest because I repin all your shit. I mean all your great pins :) )

    I think Pinterest is acting legally – that’s not my issue. I just wish they were more transparent (even though I loathe that word) (for obvious reasons) about it.

    BTW, loving the glam new profile pic … hawt mamma.

  • Anonymous

    Since you linked to me, does this mean I have to start using Pintrest now?

    Or just buy you beer?

  • Anonymous

    Only the beer part.

  • http://twitter.com/lauraBseymour Laura S.

    It would make sense to me that bloggers might be slightly annoyed by this. It seems Shady McShaderson. I don’t like it.

  • http://www.facebook.com/davevandewalle Dave Van de Walle

    I prefer the obvious.

    For instance, on one of the side projects I’m involved in – AND I’M ABOUT TO LINK TO IT – we say “ADVERTISEMENT” before anything that is, indeed, an advertisement. Shown here: http://newfrugality.com/how-to-obtain-lean-juicy-meat-for-pennies-per-pound/ (NOTE: One of the ads is for the Craft Beer Club or some such. Plus it’s about deer meat. YUM!)

    But, when we headed down the path of a site with this sort of thing, we were blatant about it and didn’t want to get bitten on the ass. Which happened to the startup I ran – when an affiliate linkage thing went awry and porn was shown on my site. Good times.

    In any event, just be freakin’ up front here, people, and we’ll like ya even more.

  • Anonymous

    I always love references like Shady McShaderson. They never fail to make me smile!

  • Anonymous

    I agree with you one MILLION percent, Dave. For me, disclosure – clearly articulated and not hidden in legalese – makes a world of difference.

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  • http://twitter.com/SmartWoman Vicki Flaugher

    If you look at Pinterest’s privacy policy on links, it explicitly denies affiliation with 3rd party links on the site. You can’t deny that affiliation if you have it, and if you’ve slid your affiliate links in, the affiliation exists. I believe the FTC rules for disclosure apply here – I am so steamed about it I wrote a blog post today covering it. I am afraid this might be a serious misstep for them. Slimy move – not the idea of monetizing their start-up that way, but not disclosing. If it’s ok to do, it’s ok to tell us you do it – in a clear, open, and conspicuous manner. My two cents…

  • http://freetraffictip.com Tinu

    I have mixed feelings about this. I’m happy when a startup I like has a way to make money baked into their product. I feel icky when they don’t disclose this fact upfront. As far as consumers, I don’t know that they’ll become aware, or care if they do. All I know is that I’ll be careful posting links to their site that point to books on Amazon. I’ll point to the author’s web site instead.

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  • http://www.pammarketingnut.com PamMktgNut

    Wow, I didn’t know this. This reminds me that band Milli Vanilli that faked they could sing.  Everyone loved them but then to find out that they were only lip syncing and the real singers were behind the curtain. Definitely going to have to look into it further. Appreciate you taking the time to layout some details for us here. 

    I agree at first read this makes me feel “yucky.” It really is too bad if this comes down to a privacy issue and lack of disclosure. What started out as a great, happy feeling, friendly site could wind up with yucky mud on their face that could have been avoided. Plus I don’t think “ignorance” is going to work as an answer either.

    It will be shocking to me if they actually did this on purpose. One would think that given the backlash we have seen w/other social networks who have tried to take advantage of our privacy that any social network would learn from their mistakes. 

    Guess only time will tell on this one!

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  • http://www.ann-sense.com/ Ann Marie van den Hurk, APR

    In many ways, it is still the Wild West out there where the line between right and wrong is blurry. Start-ups need to make money and I’m OK with that. I just wish they had been more upfront.

  • http://www.facebook.com/roncallari Ron Callari

    Shelly, you inspired me to research this further and I must say weighing the pros and  cons, I think you hit the nail on the head -  Pinterest is too new on the scene to be trying to play the “disclosure only given on a need-to-know” basis.

    Even entities as large as Facebook and Google haven’t been able to get away with that approach. Today’s digerati are a lot more savvy then they were even a year ago, and lapses of judgement like this don’t bode well for a start-up trying to make its mark.

    That said, it’s really a damn neat site – great functionality and opportunity for brands to market themselves in a less intrusive fashion – and the PIN buttons may even out-do FB’s LIKE buttons over time!!!

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  • Anonymous

    How did I miss this comment. And yes I had the very same thought, Neicole :)

  • Anonymous

    I agree with you, Ron. Oh wait, you were agreeing with ME! Haha. I love Pinterest. And really have no problem with the monetization they’re doing. I just think that going way out there and saying “here’s what we’re doing” is a good idea. Just about every time. Especially for a startup.

  • Anonymous

    Me too, AMVDH!

  • Anonymous

    You are correct. And I’m hoping, like you, that this was just one thing that wasn’t very well thought out.

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