Convincing humans to buy products is a massive business called marketing, and few areas of marketing are growing as fast as influencer marketing. Influencers on platforms like Instagram, Pinterest, and YouTube can command prodigious fees based on their audience size and engagement: some data suggests that a single video on YouTube by a top influencer can command as much as $300,000. While top influencers often have direct partnerships with product companies, others with smaller audiences often take advantage of affiliate networks to build their revenues. These networks allow an influencer to take a small cut of any sales that are generated through their unique affiliate link, and their flexibility means that influencers can prioritize products that they believe best match their audience. This industry is regulated by the Federal Trade Commission, which has set out a series of rules requiring paid affiliate links to be disclosed to users. There’s just one problem according to a new analysis by Princeton researchers: very little content on sites like YouTube and Pinterest with affiliate links actually disclose their monetization. Computer scientists Arunesh Mathur, Arvind Narayanan, and Marshini Chetty compiled a random sample of hundreds of thousands of videos on YouTube and millions of pins on Pinterest . They then used text extraction and frequency analysis to investigate URLs located in the descriptions of these items to determine whether the URL or any redirects behind it connected to an affiliate network. For all the growth in affiliate marketing, the researchers found that less than 1% of videos and pins in their random sample had affiliate links attached to them. Some categories had a significantly higher percentage of affiliate links though, such as science and technology videos on YouTube which averaged 3.61% and women’s fashion on Pinterest, which had a rate of 4.62%. What’s more interesting is that content with affiliate links was statistically more engaging than videos without affiliate links. The researchers found that affiliated videos had longer run times as well as more likes and view counts, and a similar pattern was seen on Pinterest. The incentives around affiliate marketing then are clearly working. The researchers next investigated the text of content with affiliate links and analyzed whether they made any disclosures about their economics to users. Among content that had affiliate links, 10.49% of YouTube videos and 7.03% of pins on Pinterest had disclosures. Worse, the disclosure language recommended by the FTC…

Source: TechCrunch – Social Princeton study finds very few affiliate marketers make required disclosures on YouTube and Pinterest