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    May 7, 2019, 11:23 a.m.
    Business Models

    Publishers love getting affiliate revenue from their reviews. So is it okay for Amazon to pay to get more of those reviews upfront?

    This might be a rare instance of the goals of a platform genuinely aligning with the goals of a publisher — or another case of publishers’ revenue streams being at the mercy of a tech company’s priorities.

    I’m not sure if this is an example of a healthy platform/publisher relationship or what, exactly, but it’s certainly different: Amazon is so into sites like The New York Times’ Wirecutter, BuzzFeed’s shopping channel, and New York’s The Strategist driving shoppers its way that it is considering paying those sites to expand their buying recommendations internationally, Vox’s Peter Kafka reports.

    From Kafka’s piece:

    Amazon already pays internet publishers that refer shoppers to the company via “affiliate links” embedded on their site, but it thinks that business could grow significantly if US publishers had more readers outside of America.

    Right now, publishers are paid when a shopper clicks on a link on their site, heads to Amazon, and eventually buys something. But sources say Amazon has been proposing various deals that would give publishers money up front in order to expand their international sites or open up new markets.

    This would seem to be a relatively rare instance of the goals of a platform actually aligning with the goals of a publisher. The New York Times, which acquired The Wirecutter for a reported $30 million in 2016, is gaining international subscribers faster than U.S. subscribers, and Australia, Canada, and the UK are its largest international markets; it could conceivably create buying guides for those markets without the additional complication of a language barrier.

    And while BuzzFeed has retrenched internationally, some kind of deal with Amazon might, just possibly, keep some international staff employed a little longer (though it wouldn’t necessarily rebuild the investigative forces that BuzzFeed has lost abroad). New York Magazine, with its Strategist, seems like a bit of a different case — it is after all called New York — but it too is reaching for a broader international audience. Last year, when it launched its $5/month membership program, the press release cited “a global audience of 45 million readers per month,” and then-EIC Adam Moss noted, “New York has expanded far beyond its namesake city, both in its scope of coverage and audience.”

    That said, this is sure to raise ethical questions, as affiliate relationships often do for publishers. The main tension lies most typically between the editorial independence of reviewers — whose objective skill in evaluation is, after all, the value they’re adding — and the business side, which knows both that (a) positive reviews generate more sales (and thus more affiliate revenue) than negative ones, and that (b) some retailers give publishers a larger cut than others, potentially skewing the recommendations readers get.

    Publishers have made pains to show they’re operating above board, with statements like this one from Wirecutter:

    Our writers and editors are never made aware of which companies may have established affiliate relationships with our business team prior to making their picks. If readers choose to buy the products we recommend as a result of our research, analysis, interviews, and testing, our work is often (but not always) supported through an affiliate commission from the retailer when they make a purchase. If readers return their purchases because they’re dissatisfied or the recommendation is bad, we make nothing. There’s no incentive for us to pick inferior products or respond to pressure from manufacturers — in fact, it’s quite the opposite. We think that’s a pretty fair system that keeps us committed to serving our readers first.

    Or this from New York’s The Strategist:

    Our guiding principles are to be trustworthy and persuasive about what is worth spending your money on. If you purchase something through our links, we often earn an affiliate commission, but we never recommend anything we don’t fully stand behind.

    Does that ethical equation change if a specific company — say, the largest online retailer in the world, 2.5× bigger than its closest global rival and 4.5× bigger than its closest American one — is funding the content upfront? It’s hard to say that the writers of a (let’s say) Wirecutter India won’t be “aware” of which company’s money pay their salaries. And a recommendation site typically features two different layers of editorial judgment: which products to recommend and which online retailers to link readers to in order to buy them. Would Amazon be okay with the reviewers it provided startup funding for linking to Jet if it has the cheapest price on the best waffle iron?

    It also feels worth noting that Amazon’s search experience — when you are looking for a broad category of item rather than a specific one you already know the name of — seems to have gotten noticeably worse in recent months; it is, in a word, “sketchier” than it used to be. It is ridden with sponsored links and other ads, the core of what has become an $11 billion business for Amazon; unknown brands dominate; fake reviews are rampant.

    (Want an example of what I’m talking about? Search Amazon for “steamer,” as I did recently. It is impossible from that page to tell what you should buy. I ended up going over to Wirecutter, and its recommendation didn’t even appear on Amazon’s first page of search results.)

    This seems like something Amazon could fix on its end, but that would require it to give up on that sweet sponsored product revenue. So maybe it’s outsourcing the “reliable” recommendations to publishers instead.

    Photo of an Amazon box by Like_The_Grand_Canyon used under a Creative Commons license.

    POSTED     May 7, 2019, 11:23 a.m.
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