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” or “The 75 best gifts for men that we know he’ll love”? 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 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 featured this article:
These articles that proliferate the web are not news stories nor are they real product reviews conducted by knowledgeable experts in their testing labs such as this site. They’re money-making schemes published on these sites to get readers to buy products so they can earn referral fees from the sellers of the products. They are simply ads disguised as reviews.
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 another opportunity for revenue when a visitor buys a product discovered on the site, a practice Amazon began by paying a percentage of sales to sites that send them customers.
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% |
These fees offers the websites 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. Let me explain how.
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 click on one of the results that will take me to the news 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 news story on the subject we searched for, perhaps a few paragraphs with photos that tell the story, likely curated from these and other news sites on the web. No additional click is needed and no need to go to any other site. From a user’s perspective, it’s quicker and direct. But from the perspective of these sites, it’s devastating.
It 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, accused of doing just that. But it will be very difficult to figure out where the AI sources its information, since it can use many on-line resources and create its own story in it’s own voice. It’s a nightmare scenario for the many news sources that rely on traffic to their sites. It’s even more galling knowing that they may be competing with their own content!
I’m now 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.
