Shopping Sites Pay Contributors Who Drive Traffic to Retailers

The following is an excerpt from an article in:


The New York Times
Wednesday, October 03, 2012

Shopping Sites Pay Contributors Who Drive Traffic to Retailers

By STEPHANIE CLIFFORD

Julie Medeiros thinks her taste in fashion is worth something. Turns out it is: about $50 a month.

Ms. Medeiros is not a style pro; her day job is at a talent agency in Manhattan. But in a little-known practice, social media shopping sites are offering payments to shoppers who post product links that drive Web traffic and sales to retailers.

In the case of Ms. Medeiros, it is the sneakers and lipstick she added to Pinterest and the night life collection she posted on the shopping site Beso.

Favorable mentions on blogs have been for sale for years. Product reviews can also be bought. Now social media sites are taking citizen marketing to a new extreme, turning anyone’s Twitter message, Facebook post, Pinterest image or e-mail into a possible paid promotion.

The shopping sites are open about the moneymaking mechanics and argue that readers no longer expect everything online to be commercial-free. But the Federal Trade Commission says the practice blurs the line between a recommendation and a paid endorsement and needs to be flagged to readers.

“It’s turning word of mouth into a revenue opportunity,” said Mary Engle, who directs the commission’s division of advertising practices. “Since they’re getting compensated, in a sense, for their endorsement, then they should disclose that.”

Social media shopping sites let users select items from across the Web and share and comment on other users’ selections. They don’t sell anything themselves but make money by taking a cut from retailers on their sites.

Beso formally introduced a program on Tuesday that Ms. Medeiros has been trying, which pays users to send clicks to hundreds of major retailers, like Target and Gap.

“If they drop a link onto Twitter about a pair of shoes that they’re dying for, or a new handbag they’re coveting, and they refer users to Neiman’s or whoever sells that item,” said David Weinrot, the chief marketing officer for Shopzilla, the parent company of Beso, “they could actually be rewarded.”

Other large social shopping sites and apps, including the Fancy and Pose, recently introducedsimilar programs, and Referly, a site introduced in May, is entirely based on people referring products to friends and receiving money in return. Referly says 10,000 people have already signed up. The programs are too new to evaluate their financial success, but Web marketers say consumers should expect more similar programs, in part because visitors are no longer offended by the idea.

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