Have you noticed wherever you go on the web, you encounter articles that recommend products and offer product reviews with titles such as “The best deals on Amazon”? Today I opened up the Wall Street Journal and came across this feature article, “Your Morning Routine Needs a 2024 Reboot. These Gadgets Will Help.”
When I later went to CNN I encountered a section called “CNN Underscored” with numerous articles such as “The 19 best polo shirts for men,” and “The Best Products on Sale this Weekend.” NBC News website features this article:
These articles are not news stories nor are they curated product reviews properly done by experts product reviewers in their testing labs. They are a pure money-making scheme by these sites to get readers to buy products and earn a referral fee from the seller. They are promotional pieces often disguised as serious recommendations. I’ve read many of them and I wouldn’t trust them, because little of it is based on any serious comparisons with competitive products.
As much as we might fault these news sources for mixing news with promotional pieces and not distinguishing between the two, we can also lend them a bit of sympathy for why they are doing it: a desperate move to survive.
Income is dependent on traffic to their sites. The more traffic, the more opportunities for a visitor to click on an ad, providing income when they do. Referral fees offer even another opportunity for revenue when a visitor buys a product from a site that offers referral fees, a practice Amazon began that pays a percentage of a sale when the customer comes from another site.
Here‘s a list of the referral fees Amazon’ pays:
| Category | Referral Fee Percentage |
|---|---|
| Automotive & Powersports | 12% |
| Beauty | 15% |
| Books | 15% |
| Camera & Photo | 8% |
| Cell Phone Devices | 8% |
| Clothing & Accessories | 17% |
| Consumer Electronics | 8% |
| Grocery & Gourmet Food | 8% |
| Health & Personal Care | 8% |
| Home & Garden | 15% |
| Industrial & Scientific | 12% |
| Luggage & Travel Accessories | 15% |
| Sports & Outdoors | 15% |
| Tools & Home Improvement | 15% |
| Toys & Games | 15% |
| Video Games & Video Game Consoles | 15% |
The generosity of these fees offers the publications a new source of income that they desperately need as their readership diminishes, and as Google soaks up much of the advertising revenue. And their plight is going to get much worse with the advent of AI.
Currently a Google search, say for a current news event, will bring up a list of websites with relevant articles. I searched on a current event in the new, “Houston severe weather,” and up came this result:
I now can choose one of the results that will take me to the site where I can read the story, read other stories, and perhaps click on an ad.
But with AI search, instead of getting links to these websites, we will get an AI-created story of the subject we searched for, perhaps a few paragraphs that tell the story, likely picked from these and other sites on the web. No additional click is needed and I never get a link to other sites. From a user perspective, it’s quicker and more direct. But from the perspective of these sites, it’s devastating.
This means a big drop in traffic to these websites and a corresponding loss of revenue. Now AI engines such as ChatGPT shouldn’t just take the work of others and serve up their own results, and they are being sued by the NY Times for doing just this. But it will be very difficult to figure out where the AI sources its information, since it can check many on-line sources and create its own story in it’s own voice. It really is a nightmare scenario for so many news sources that rely on traffic to their sites. It’s more galling knowing that they are competing with their own content!
While I really dislike these meaningless recommendations, I’m a little less critical when I see the shameless promoting of products to gain referral fees. It’s an act of survival, but a small one, that won’t be enough to significantly disrupt the online news industry even further.