Thursday, August 12, 2010

Link Clickers Beware - But You Can Opt Out

[Update, August 12]:  An anonymous comment provided a link to the FTC guidelines covering endorsements and testimonials. You can see the relevant section for bloggers in the third comment at the end of this post. It sure looks to me that this totally violates those guidelines.]

BloggerBuzz had a post recently announcing a new way to 'monetize' one's blog:

. . . Any time you write about a product or service, you're connecting your audience to that product. If someone makes a purchase, the seller benefits from your written wordyou influenced a purchase. There are thousands of websites that will pay you a fee for any business you bring them through a form of online advertising called affiliate marketing. With affiliate ads, web publishers are compensated for driving online actions.

VigLink is a content monetization company that makes affiliate marketing very easy for bloggers. We offer a simple snippet of code you can install in your blog that automatically and transparently does all the work for you. We've catalogued and signed up for more than 12,500 affiliate programs and we collect all the performance information and deliver you a single integrated payment. In return, VigLink takes 25% of the incremental revenue you earn. [emphasis added].
There's also a two minute video.

What's wrong here?    Most might say, nothing at all.  This is the American way of life.  Nothing has value unless it has a price.  Unless we can make a buck off of it.  People who blog for free are losers.  Well, here are the problems I have:

1.  The reader doesn't know the blogger is being paid and thinks the endorsement is uninfluenced by a payoff.

When I was a cab driver in LA, a fare once wanted to go to a strip club.  When I dropped him off, the club guy came to my window and gave me $5 and told me it was always $5 per person I dropped off.  So if someone asked me if there were any good clubs around, you know where I'd take him.

This is the same sort of problem these unmarked links set up.  The reader thinks it's a genuine endorsement uninfluenced by the promise of a payoff. Currently, there are ads in some blogs, but they are labeled as such.   Readers suspect or know that the blogger gets a commission on these. 

In their FAQ's, the company writes this about reader awareness:

Will my users notice?

Likely not. VigLink does not change the user experience one bit. No links are inserted or removed on the page, there are no double-underlines or pop-ups, and mousing over a link looks "clean."

But, it's really dirty is what they seem to be saying.

This is like tv shows and movies that pay film makers to embed their products in their shows.  So buying Full Circle Farm produce no longer is an integral aspect of the character, but rather they wrote that in because FCF has paid them for this stealth ad.

I've gotten emails offering me payments if I plug a product on my blog and they will pay more if I don't say that I'm getting paid.  The advertisers believe that if the readers don't know the bloggers are getting paid, they are more likely to believe.

In the FAQ's, they even tell merchants:
Additionally, VigLink increases confidence, click-through rates and conversions by making the links to your site appear to be "natural" links instead of obviously embedded affiliate codes. [Emphasis added]
They are selling the fact to merchants that they are deceiving viewers into thinking these are natural links.

As a viewer, YOU CAN OPT out.  There's a page where if you click on the button, it says
If you'd like to disable VigLink on sites that you visit, click the button below.
I'm not sure what that means.  I have no idea how the average viewer would ever find the page, or even know there is something to opt out of.  Does it mean they won't collect data on you?  Does it mean that the blogger doesn't get his payoff if you purchase something through his link?  There's a link there to a long privacy policy which includes statements like:
We do not knowingly collect personal data from children under the age of 13. If you are under 13, please do not give us any personally identifiable information.  [Emphasis added]

How many kids read privacy policies?  How many adults read privacy policies?  How many people even know this company exists? 

2.  The blogger starts pushing products, not because he really likes them, but because they will make him money.

Behavioralism is a school of psychology that tells us, among other things, that people repeat behaviors that are rewarded.  So, if bloggers get paid for writing posts that get people to click on links and buy products, they will start writing more such posts.  And eventually, some bloggers will recommend products they don't really believe in because they know they will get rewarded.  

3.   Trust in Blogs Will Turn to Suspicion

Before this new company arrived, readers knew that if they clicked on an ad, the blogger would get some small amount of reimbursement, but if they clicked on a link in the post, there was no compensation.  They could reasonably assume that the blogger put in the link because he believed it was in the reader's interest to click on the link.

Now though, as surfers begin to understand this new system, they will become suspicious of all blogs and bloggers (and probably the websites of newspapers and everyone else will do this as well.  Maybe they already do.)

Even if bloggers, like me, post announcements saying that we do not have paid links, there's nothing to stop people who DO have paid links from putting up the same announcements. 

Note:  People should be skeptical about what they read on blogs.  But there has been a sense of innocence in many blogs that are written by people who just enjoy sharing their ideas and without the corrupting influence of money. 

4.   Bloggers are probably also being ripped off

So, if VigLinks is willing to hide from the viewer the fact that the blogger is getting paid, why should we be surprised that they are also snookering the blogger?

  • Blogger pay is probably pretty tiny.  One reason putting up ads is not even a temptation is that I know I would get so little revenue from the ads anyway.  If I'm going to sell out it's going to be for a lot more than $50.   I looked into google-ads  when I first started blogging and learned that only blogs with at least thousands of daily hits are likely to make any real money.  The ads for this company don't talk about how much a blogger would actually get.  I looked through more of the links on the website.  You get vague things like:

How does payment work?

VigLink will pay by check in the United States and PayPal anywhere it is available. We are expanding our payment options over time. VigLink will ask for payment information and pay publishers as soon as their balance reaches $25. VigLink typically takes 25% on commission earned by publishers. Often publishers still receive higher payouts due to collective bargaining and high volume commission levels. We will issue an IRS Form 1099 to any publisher who makes more than $400 in a fiscal year.
What percent of bloggers will even earn that $25?  If they don't, what happens to the money?  So, we don't really know how much you get per click.   Actually, another FAQ says you get paid if someone makes purchase only.  It doesn't say how much.  Instead it says,

How does VigLink make money?

You earn a commission for every sale made on a linked site. VigLink takes a small fee from that commission and then passes on the rest to you.

Small fee?  It's true it will be a small fee in absolute cents.  But it is 25% of what the blogger earns.  Gryphen at Immoral Minority said that Tank Jones and Rex Butler's commission from Levi Johnstons' earnings is only 20%.  I don't know if that's true, but Gryph seemed to think that was a significant chunk.  This company takes 25%.

But if the blogger doesn't make much money at all, what's 25% of nothing?  Well, there's something called the salami technique:
Employee embezzles large amount of money by stealing small sums from many different accounts.
This linking scheme isn't stealing because they tell the blogger and the blogger agrees to it. Though they intentionally do not want the viewer to know what is happening.   But, the vast majority of bloggers who might sign up for this probably wouldn't make much money.  It's possible a lot won't even reach the $25 threshold necessary for them to write the first check.  And as I asked earlier, what happens to this below threshold accumulation?  Why don't I think they'll donate it to decrease our national budget? 

I'm guessing, based on talking to people who have google ads, most people won't make more than, say, $50 a year, and that's probably high.  A few of the very big blogs with  thousands of hits a day, might do well.  But if this company got a million blogs to sign up - and it's really easy to add the code - and they get 25%, and if that amounted to about $10 per blog, that would be $10 million per year. (Hatrickassociates claims there are 400 million active English-language blogs in 2010, so my estimate is probably way low.)

So a scheme like this would
  • pollute general trust in blogs with 
  • minor benefit to most bloggers who sign up, 
  • cause deception for readers, and 
  • cause companies to pay a salami slice commission for links that they had in the past for free. 

The main beneficiary would appear to be this new company, and, probably Blogspot, WordPress, and TypePad also get a cut.  I couldn't find any mention of that.  

It seems to me that blogs with stealth links like this should post a notice at the top of the blog:

"This blog may receive kickbacks from merchants if you click from here and our reviews of products may be biased because of that."


  1. Thanks for the heads-up. Who knew all this was going on? I agree with your suspicions regarding this new company - it has rip-off written all over it.

    Glad to sense that you are an honest blogger who blogs for the joy of sharing information! We appreciate it!

  2. This bothers me-- I hated commission sales for women's clothing for this reason. I worked at a downtown store in the late '80s and occasionally we had promotions that were behind the scenes for the sales clerks. Only we would be paying attention, but we had to log reciepts and what we sold for specific brands. I was 19 and 20 years old and I hated it and never paid attention because I wanted to focus on what my patrons looked good in; they came to ME for my taste and honesty.

    I was too young to have figured out your ethical explanations. You give vocabulary to what I could only say that my gut told me was wrong. My parents were both sales people and they were silent because they wanted me to do well and make a living, but they also knew it was wrong. Maybe that was why I gravitated toward social work after seeing how greedy my own management was. I felt like the stores were there to prey on people as opposed to providing wonderful clothing. I hated the attitude that "the customer can always say no, you aren't forcing them to do anything!" I asked if coersion meant anything to them and I would leave the field in disgust.

    The internet is a new frontier and people are trying to figure out the boundaries. Hopefully what you are bringing up won't last.

  3. The FTC guidelines clearly don't allow this:

    The revised Guides also add new examples to illustrate the long standing principle that “material connections” (sometimes payments or free products) between advertisers and endorsers – connections that consumers would not expect – must be disclosed. These examples address what constitutes an endorsement when the message is conveyed by bloggers or other “word-of-mouth” marketers. The revised Guides specify that while decisions will be reached on a case-by-case basis, the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service.

  4. Anon (10:20pm) Thanks for the FTC link. That's good to know. Glad that even the government thinks there's something wrong with this.

  5. You're right, the FTC doesn't allow this without disclosure. But there is a page on that says exactly that:

  6. Another Steve, Thanks for pointing this out. This is helpful, but I spent a lot of time poking through the Viglink pages and never came across that page. I'm guessing you get there if you sign up to Viglink which I didn't do. But this doesn't guarantee that the readers will ever know this. It says:

    "Linking to this page with one of our badges is a great way participate in our referral program while simultaneously disclosing to your readers that you use VigLink to monetize links."

    So, I'm assuming that someone could link here if she chooses, or not. But VigLink's marketing to merchants emphasizes that people won't know that the blogger gets compensated.

    Also that page says, "Regardless of this potential revenue, unless stated otherwise, the site only recommends products or services they use personally." They have no way of knowing if this is true or not. I would guess that some people will start adding links in hopes of getting more revenue.


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