It's not impossible to write a neutral or negative review for an item and still include an affiliate link -- the only slant I could see happening is trying to include something positive, but I would argue that we should be doing that anyways when we are criticizing something. If you are an honest reviewer, you may be concerned about people not clicking affiliate links for badly-rated items. The solution is to try to find something similar that you can honestly give a positive review for, then link to that positive review from the negative review. Your readers will appreciate you for your honesty and will be more likely to trust your positive reviews if you follow a policy like this.
The problem becomes a bit harder as a person reading someone's reviews. You can usually identify affiliate links pretty easily just by scanning the URL. If the author is using an affiliate link, it is up to the reader to determine how much faith they have in that author. If they do not believe in the author's integrity, then why are they reading that author's reviews in the first place? After all, affiliate links aren't the only way to skew a dishonest author's integrity (think: free goodies, free trips to "review" expensive items, etc.).
First of all, I think we focus way too often on the "average" or "median" behavior when trying to define how humans behave. In a lot of cases (optimizing a website or arranging a retail outlet), this makes perfect sense. In many areas, this is misapplied.
Imagine that a researcher did a study on dunking a basketball. They are very careful to take an appropriately-representative sample of a country's population, and they find that something like 0.5% (totally made up) of the people can dunk on a standard 10-foot basket. They find that lowering the basket to 9 feet allows about 5-10% to be able to dunk, and they provide arguments for why this 5-10% figure is an ideal number for maximal excitement of a basketball game. We can clearly see that this is a bad reason to use for lowering an NBA hoop to 9 feet. NBA players are extraordinary, and appealing to the average is silly.
In the same way, I think this could be regarded as a similar case. Clearly only a small percentage of the population is capable of writing good reviews. It is automatically narrowed to people who are capable of writing not only clearly, but also in a way that makes a somewhat dull topic more interesting. We should be able to further narrow "good reviewers" to that group of reviewers who are always honest in their review, those (perhaps rare) people whose reviews are not swayed by potential monetary gain. And there are certainly people like this.
Perhaps what we really need is a way to differentiate the best across all kinds of categories, something like an NBA of professionals. Currently we rely on various magazines and news sources to select the best reviewers, but this narrows the field too much and too arbitrarily, while irrelevant things like seniority and past results affect judgment of a person's abilities. Perhaps it's time for the business/information world to take something from the sports world.
If someone writes reviews (about lots of books, for example) and all of them have an affiliate link, regardless of whether it's a positive or negative review, and they state clearly, somewhere (rather somewhere on their blog/site than in every link) that they get a percentage of each copy sold, I think that's a good thing. I think they should, and they should tell the reader that if they buy the book via this link, they help support the magazine.
Combined with BrandonM's suggestion to steer readers in the "right" direction, and point them to another item instead ("this book wasn't that good, but this book about a similar subject is worth picking up!), that's a nice service which nobody should have to be ashamed about.
Of course this suggests that readers have a reason to trust you, but then again (as BrandonM points out): If they don't, why are they reading your review?
The problem is that most people barely know what an affiliate link is, let alone spot one. This fact makes producing biased reviews attractive and that's why I think the answer to nate's question should be: generally they are.
Personally I don't trust a review when I see an affiliate link. A 'sponsored link' disclaimer would reestablish my trust though.
Furthermore, as I pointed out it's not only affiliate links that can slant a review. I'm taking any review I read with a grain of salt, and my estimation of the author's or publication's integrity is a large factor in how much faith I have in a review. This is why it is such a big deal when stories come out like the TechCrunch author who demanded merchandise in exchange for reviews.
Perhaps some other type of notice would be more appropriate, but I can't think of what that would be.
My question is, why do these people with so much money already waste their time on a a 40 cent commission for a book?
It'd be better for them to avoid the suspicion. Take the ulterior motive out of the equation. Trust is worth a lot.
Because it calls into question things about how much money Tim makes, which is sort of none of my business, but since he writes a book and blog about how you can be basically make more money more efficiently, it sort of becomes interesting to me.
Does he need the supplementary income from Amazon because he doesn't make enough from his books + lecturing + investing?
How much money is he making with this kind of thing?
And maybe it was sort of unintentional to post an affiliate link and his Wordpress installation just auto links those somehow?
I haven't changed the main content of my site - the news portion - and if an album comes out, I'll post pre-orders for Amazon, Best Buy, and anywhere else that takes pre-orders, and I continue to emphasize the cheapest one, even if it's not Amazon.
With eBay, the affiliate program got me interested in utilizing their API, with which I built some smart filters and created a page on my site where you can buy secondhand records and posters (which aren't available new) from a list that I maintain, keeping out bogus vendors and counterfeits. I built something that I as a reader would actually use.
If you allow your affiliate links to dramatically change how you post, that's kinda crappy. But I think I do an okay job of integrating affiliate links in an appropriate fashion.
I think you can get around any moral qualms by clearly pointing out any affiliate links. If you're turning readers on to a good book, they'll be happy to intentionally click your affiliate link.
And contrary to what you are proposing (mention it's a 'sponsored link') you'll often see that people who place these affiliate links in their articles/overview-sites are explicitly stating to be objective (or having the compiled the best overview possible, etc). This of course because it increases their conversions.
In the consumer-review industry, for example, I think we all can say that we trust Consumer Reports, their incentive being to give the most accurate information because they rely on a revenue stream from the consumer. If they don't give accurate information, they won't be trusted and their customers will stop paying.
On the other hand there's Top Ten Reviews, who perform a similar service as Consumer Reports, but do reviews on software and other technology products. Their business model is to include affiliate links for each of their products - this gives them the incentive to find the highest-paying commissions and best-converting landing pages. They have little incentive to give the best information because of where their revenue comes from. I think that most savvy people don't trust them. It's true that there will always be a "sucker" who won't realize the conflict of interest and will buy a product - this fact allows Top Ten Reviews and sites like them to be profitable. But they will never gain the trust or stature of Consumer Reviews, because the savvy visitors won't rely on the information they have, and savvy honest people won't recommend the site to others.
I'm in class so I don't have time to edit this to make sure my arguments flow without any logical inconsistencies, but you get the idea.
It doesn't make any difference to me if a review is bad because it's a forced shilling exercise or because it's an uninformed review, it's just bad and easily ignored, usually by the first or second paragraph.
I click on so few links that if an occasional shill gets some change from my purchase, I don't care, because I would have bought the item (or not) anyway, and not based on a single review.
As for identifying affiliate links, I don't think it's necessary from a moral perspective. I think the FTC is nosing around in the area of late, so it might be a safe thing to do. I can't think of an unwieldy way to do it though.
If you want to make it obvious you'd put it in the link text, ">The Bible (sponsored link)<". That kind of looks ugly, although if it became common maybe I could get used to it.
A tool tip (title attribute) might be good enough, and less distracting when merely reading the text.
One overlooked point is the potential costs of writing biased articles to boost affiliate commissions. Anyone serious about maintaining and building readership would avoid this at all costs. In the long-run, doing so would ultimately be ROI negative (unless the author's sole goal is to create a thin affiliate site).
As other commenters have mentioned, most savvy Internet user can see through these ploys. The victims are the more unsophisticated that find review sites through long-tail Google searches and not through blog subscriptions. Thin affiliate sites are generally to blame, not the serious content producers.
As for "do affiliate links make me look dirty" it depends on your writing style and your audience. If, say, I wrote an article on kuro5hin.org and included affiliate links, even with my usual self-deprecating tone, I'd be castrated as a spammer. Hacker news has a fairly positive view of advertising, so as long as your page had some real content and wasn't obviously made to only push the links, you are probably okay.
(Now, I have slipped affiliate links on K5, but only to my book; It's my book, so affiliate link or no, I'm expected to be biased.)
I've been thinking about this some, as I've been considering signing up for the affiliate programs of my competitors; I mean, I do certainly recommend my competitors to some of my potential customers, so why not get paid for it? The worry there is that it could increase the feeling of prgmr.com being super tiny, which I guess we are, so maybe I should embrace that?