Why Does Anyone Tolerate Skimlinks?

Pinterest has been growing absurdly fast (despite a laid-back work culture. It’s gotten to the point that marketers are doing a find/replace on their old “How to use Twitter” blog posts.

So it’s inevitably time for some sort of weak backlash. This time, the problem is their revenue model. They have one: they’re modifying links to add affiliate codes, through a service called Skimlinks. The direct complaint (that they’re editing user pins) is pretty weak; users have zero reason to care about it, and editing links is just one way to track where the traffic comes from—advertisers could use exactly the same model to attribute traffic based on their internal referral data.

(Google has even blessed this model by investing in a Skimlinks competitor.)

The Skimlinks/Viglink value proposition is pretty easy to understand from a publisher’s standpoint. But from an advertiser’s view, it makes little sense—indeed, to an advertiser it’s hardly a coincidence that “skimming” and collecting a “vig” both have slightly criminal connotations.

Skimlinks claims that this is fine; Betabeat sums their argument up as “merchants are fine paying for affiliate links through Pinterest—because the site sends tons of traffic and it needs revenue to survive.” Which is pretty bogus: yes, the site needs revenue to survive. And yes, the site sends lots of traffic—but it sends exactly as much without the modified links. Pinterest needs cash to survive, but it’s not a charity case: why would anyone want to subsidize a site that’s sending them traffic a) partly at the expense of other traffic sources without affiliate links, and b) while sending traffic to affiliate link-free competitors?

Skimlinks’ PR rep also claims that charging for otherwise free traffic is equivalent to Google’s AdSense program (she almost certainly means AdWords). That’s a weak argument: Google offers advertisers a chance to pay for traffic, and gives them ways to get the traffic for free; it doesn’t take a free source of traffic and mark it up. AdWords ads on branded terms would appear to be an exception to that argument, but they’re also a way for advertisers to own more screen real estate, and push more sales pitches—Google is charging them extra for something extra, rather than charging them for something they’d otherwise get for free thanks to the actions of a third party.

The strongest argument against Viglinks and Skimlinks is how hard it is to distinguish between what they do and classic cookie stuffing. In both cases, a third party is getting affiliate commissions in exchange for doing nothing other than gaming the affiliate system. While those commissions might be used in a way that benefits the publisher, and thus ends up benefiting the advertiser, there’s no guarantee of that. And it’s hard to excuse misbehavior on the grounds that it ends up having net positive effects—when retailers that target teenagers let kids shoplift, on the grounds that shoplifters are trendsetters, that’s a business decision made in light of the reality of shoplifting; it’s not an endorsement of shoplifting itself.

Perhaps the real test of this reasoning will be when affiliate networks ban Viglinks and Skimlinks. By the Skimlinks argument, retailers are just finding a way to profit from clicks they’d already get. And since online retail in general is necessary for the success of the affiliate industry as a whole, it’s hard for Vig/Skim to object. A business model that lives by handwavy justifications can die by them, too.