1. It's the most scalable way for them to generate revenue without shoving ads down your throat.
2. Skimlinks doesn't "modify" your links, they simply put it through a redirect to see if it affiliates. The link you've submitted to Pinterest will likely stay as is.
3. If users submit affiliate links already, then services like Viglink/Skimlinks don't overwrite your cookie (i.e. Reaffiliate it) so those users will continue to see revenue.
It's awesome that skimlinks exists...years ago I worked for a company that relied on affiliate revenue and we had someone working full time to maintain relationships. I imagine they lose some of the pickier affiliate programs, but this is an awesome way to test out the revenue model.
It also brings up another interesting point. If this revenue model works for pinterest, it means it could also work for pinterest users. Someone can create a browser plugin that automatically converts user links to affiliate links when they get posted to pinterest, and kicks back the commission to the poster. Probably too hard to distribute the plugin, but still thought it was worth mentioning.
There's a strange pattern of posts where commenters suggest an affiliate would be negatively impacted by a sudden uptick in referred customers successfully completing a sale.
In what bizarro world is this a problem?
If the customer acquisition cost (%) becomes higher than the vendor would like to continue paying, they will lower the commission they offer.
Vendors that pay affiliate fees do so willingly. They do this because all traffic comes from somewhere, and it is seldom free. If Amazon only has to pay one-referral for a completed sale vs. 100 click throughs required to complete the same sale, they're happy. If not, they'll down-correct their referral amount offered.
I would think the affiliate programs would be the ones who would have an issue. No affiliate link to adding one costs them profits they wouldn't otherwise have to give away.
What's Pinterest going to do if this option doesn't exist, remove the links? No.. they could change the display algorithm to display links with their affiliate code more often, but that may mess with quality of content and click-rates..
I don't see why affiliate programs would have an issue here. If Pinterest didn't exist they wouldn't be getting the traffic.
Pinterest has every right to monetize their website in the least intrusive way possible. These referal links are transparent and provide a neat way to get some income.
What suprises me is how they are giving away 25% of their profits by using a third-party service instead of making something themselves.
They may have an issue if this completely changes the scale, demographics, and therefore the economics of their affiliate program. It's one thing to have and affiliate program for bloggers that may bring dozens or hundreds of interested viewers, vs Pinterest bringing thousands or millions of casual viewers.
Some (many?) programs will need to adjust their terms for this practice, or they may face one of those Groupon-like situations where a family bakery needs to serve 100k muffins, at a loss, in a weekend.
Most affiliate programs I know reward actual purchases, not clicks, and share only a small fraction of profits. I don't see how 100k people ordering a book could ever be a bad thing for Amazon.
They assume a proportion of the buyers will be repeat purchasers. Paying for a loss-leader product for 100k casual visitors with unknown demographics or purchase patters is riskier than many businesses are comfortable with (for good reason!).
Also, if you are Fred's custom napkin business, and you usually sell 10 napkins a week and suddenly you receive 100k orders you are going to have a problem scaling a physical business that quickly.
Say 100,000 people ordering a book makes $1,000,000 for Amazon.
Say if those 100,000 people came through an affiliate link, they only make $900,000.
If you're Amazon's affiliate manager, indeed your first thought is, "Wow, Pinterest is great! Look at all these sales"
But your second thought is, "Wow, if I just drop Pinterest from my program, I'll make an extra $100,000." In its current state, Pinterest will not do anything to stop these sales from being generated, so the merchants are just throwing away money.
The real problem here is that Pinterest doesn't deserve the commission, Pinterest's users do.
1. It's the most scalable way for them to generate revenue without shoving ads down your throat.
2. Skimlinks doesn't "modify" your links, they simply put it through a redirect to see if it affiliates. The link you've submitted to Pinterest will likely stay as is.
3. If users submit affiliate links already, then services like Viglink/Skimlinks don't overwrite your cookie (i.e. Reaffiliate it) so those users will continue to see revenue.