Sunday, November 28, 2021

Pinterest Grows, Violates FTC Rules?

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Pesach Lattin
Pesach Lattinhttp://pacevegas.com
Pesach "Pace" Lattin is one of the top experts in interactive advertising, affiliate marketing. Pace Lattin is known for his dedication to ethics in marketing, and focus on compliance and fraud in the industry, and has written numerous articles for publications from MediaPost, ClickZ, ADOTAS and his own blogs.

According to ComScore, Pinterest, the photo social networking site has already hit over 10M unique visitors per month, which puts it as the fastest growing site every to hit this milestone. Another interesting number is that Pinterest has become extremely addictive with the average user spending 98 minutes per month on the site. This means that Pinterest, which has a huge base from both the coasts and Middle America is showing that it could be a significant player against Facebook.

However, already people are up in arms about something. The company has been secretly changing links when their users promote items to include their affiliate code. According to Josh Davis of LLSocial.com:

 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.

Several blogs have questions this, not only as being deceiving but a possible violation of FTC rules that require that disclosure when content is disguised as an advertisement. Pinterest’s argument could be that they themselves are not actually promoting the product, they are changing the code and thus it’s not a real placement.  Either way, its something they need to address because the FTC has already shown they don’t appreciate when people hide advertising in content without telling users about it.

Feb 8th 2012:  SkimLinks responded to this on their blog

Online communities need ways to generate revenue to support their operations, and the preference is always to earn this revenue without disrupting their users or detracting from their UI with flashy advertisements. Creating a beautiful, user-friendly site, as Pinterest has done, mandates a non-intrusive way to make money.

By providing a platform where people can post things they like, Pinterest isn’t endorsing particular products for the sake of financial gain, just providing a valuable forum for products to be browsed by their community. So it is understandable that they didn’t want to make a big deal of this, especially as so many other content sites also use Skimlinks and affiliate marketing technology to help fund their operations.

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