Pinterest clamps down on (non-Pinterest) e-commerce

For years, brands and bloggers have been using Pinterest to generate sales and affiliate marketing revenue. Now, Pinterest is trying to shut off affiliate networks in order to obtain more control over how commerce is conducted on its platform.

The digital scrapbooking service has enacted a universal ban on affiliate links on its platform, Pinterest spokesman Mike Mayzel confirmed to Digiday in an email. Bloggers who have made money by posting affiliate links to Pinterest will have their business models rendered obsolete.

The decision coincides with news that Pinterest will be adding a “buy” button to pins in the next three to six months, according to a report from tech publication Recode.

But the two initiatives are almost certainly not coincidental. Pinterest is adding buy buttons so it can make its site shoppable and earn a commission on sales conducted through the platform. Affiliate networks run a similar hustle, though — their members pin links to products and receive a commission whenever those pins result in a transaction on the destination website.

The ban also applies to companies such as HelloSociety, a startup that manages a collection of popular Pinterest accounts and doubles as an affiliate marketing network. Its “power pinners” post certain items to Pinterest and use affiliate links generated by HelloSociety to log when those pins are clicked on. The retailer is able to drive traffic to its site, and both the pinner and HelloSociety get a cut for having elicited the activity.

Everyone wins in this scenario except for Pinterest, which sees no revenue from these types of transactions despite having facilitated them.

By blocking affiliate links, Pinterest is preventing affiliate networks from generating e-commerce revenue on its platform. Its buy button thus becomes the only way for retailers to drive sales through Pinterest, and Pinterest finally gets a taste of that action.

RewardStyle, an affiliate network whose members use Pinterest, will undoubtedly have its business model affected by the ban.

“We will continue to be the advocate on behalf of the 10,000 global rewardStyle content creators, and will be collaborating with Pinterest teams on a seamless process that will help maximize premium digital content in the future,” rewardStyle CEO Baxter Box said in an email.

HelloSociety could not be reached at time of press.

Mayzel said Pinterest has no plans to institute its own affiliate program in lieu of the ban. He added that the decision was not about monetization but as a way to protect the user experience. Many affiliates were broken, and some were using them to spam other users, pinning items just so they could generate revenue instead of ones they were genuinely interested in.

He did not comment on the buy buttons.

Pinterest’s blocking affiliate links is just the latest instance of platforms exerting more control over how their platforms are monetized. Whenever a new popular platform emerges, so does an ecosystem of companies that find innovative ways to make money off that platform. These cottage industries typically function independently, finding ways to advertise on a platform without having to buy that platform’s ads. Usually, this in the form of having popular account holders send branded posts directly to their followings, as does HelloSociety and its network.

But platforms are now seeing value in conducting these kinds of businesses themselves to stop those fringe companies from “riding their coattails.” Twitter acquired Niche, a company that manages social media influencers, last week in order to match Vine stars with brands. Tumblr is also now trying to broker deals between brands and its talented users. And YouTube has invested hundreds of millions of dollars over the past several years toward producing and marketing original programs.

Platforms enjoy billing themselves as open, but sometimes it pays better to be closed.

Homepage image courtesy Shutterstock

Correction: An earlier version of this story incorrectly stated that HelloSociety is paid for driving transactions on retailers’ websites. HelloSociety is paid to create content for brands and drive traffic to their websites, but not for driving purchases.