The Business of Pinterest: How The Emerging Platform Is Already Generating Income

There has been some heat on Pinterest lately in response to the discovery of affiliate links being amended to shared URLs to generate revenue for Pinterest itself from user generated content. The criticism is coming from two angles: the retailers and the users.

Affiliate marketing is a way that retailers partner with independent marketers or networks of marketers to drive traffic and sales on their site. Any retailer that is working with affiliate marketing networks has already weighted the pros and cons of the practice for their business and made the judgement call on whether they want to work with affiliates. They are okay with the idea of sharing revenue with referral sites, for the extra traffic, and the sales volume it can potentially generate for their site.

For those sites affected by the Pinterest practice of amending affiliate links, there is only gain. Pinterest has created a free platform for individuals and brands to share content and the pay off for using the site is increased discovery of content and the resulting traffic.   Pinterest is a stylish, well built and curated link farm. The rewards for retailers and merchants of any size is the astronomical volume of traffic the site can drive.

On the user end the practice only detrimentally affects pinners who are using it as a tool in their affiliate efforts. Now this is not to say that as an affiliate you cannot use Pinterest as an affiliate traffic driver, however, there is an extra step you have to take to manually attach your affiliate link to the pin. Once you’ve attached your affiliate link, Pinterest will NOT amend it. However in the minute or so between the upload and when you manually change the link there is the potential for that non-affiliate link to be shared/repinned and get the Pinterest generated affiliate link attached to it instead. This is a minor draw back, but something that impacts affiliates non-the less.

It would be nice to see more disclosure about the affiliate link swapping, however the practice does not affect the majority of the users on the platform.  If I’m not an affiliate marketer myself, Pinterest’s use of their own affiliate links is not costing me anything and does not affect my experience.

Pinterest has achieved a major win, in my book, by developing a rather clever way to monetize the user-shared links *without ads or sponsored content, and by generating revenue without detrimentally affecting the user experience. On the contrary, generating revenue at this early stage in the life of the company has put them in a position to develop the platform at an accelerated rate, which is a good thing for users, the large volume of whom are looking for a great user experience, not profit.

Their financial success is our gain. I’m still an avid Pinterest fan and proponent for retailers with a visually compelling product line to use the site as part of their online marketing strategy.

Michelle

Michelle