Why Pinterest Is Only Scratching the Surface with Advertising Revenue
Pinterest has what it takes to grow in the future. The unique dynamic of this platform will make it an increasingly attractive draw for brand dollars, while its relationship with consumers will enable it to expand ad inventory over time. Ultimately, Pinterest has the makings of one of the largest players in advertising, writes, Aaron Goldman is CMO of 4C Insights.
Pinterest impressed the Street with its performance in the second quarter of 2019 with a 62 percent year-over-year increase in revenue. That’s an impressive number but, make no mistake, this is just the beginning for Pinterest.
There are multiple reasons to be confident that Pinterest has what it takes to grow in the future. The unique dynamic of this platform will make it an increasingly attractive draw for brand dollars, while its relationship with consumers will enable it to expand ad inventory considerably over time. Ultimately, this visual discovery engine has the makings of one of the largest players in advertising.
Also Read: How In-App Programmatic is Changing the Mobile App Advertising Marketplace
Influence and Interface
Pinterest’s initial success has been predicated not only on its popularity among consumers, but also its ability to help advertisers connect with consumers across the entire customer journey—from awareness to purchase. Its particular strength within the middle of the purchase funnel makes it unique among other social and digital media platforms, as people regularly turn to its content for inspiration and ideas along the path to purchase. In other words, advertising on Pinterest offers the ultimate opportunity to influence influenceable.
It’s more than that, though. The nature of Pinterest’s content draws a valuable audience of considering consumers, yes. But its interface and the visual presentation of that content are what make Pinterest a rare platform on which people welcome, rather than merely tolerate, the appearance of brands within the experience.
What is considered interruptive on other properties is simply additional content within the Pinterest experience. Additionally, the platform’s tiled interface will likely prove easier to monetize, and to a greater degree over time when compared to the linear feed of other social platforms.
People and Purpose
The beauty of Pinterest lies in its variety of use cases. People come to the platform for many purposes, and advertisers have an opportunity to directly align their ad messaging with users’ intent.
- Daily Decisions: People want to know what to wear today or make for dinner.
- Seasonal Celebrations: People want to plan amazing holiday parties for friends and family..
- Life Moments: Whether having a baby, getting married, or buying a home, people use Pinterest to plan life’s biggest moments.
All of the above are key apertures for brands. And ads are seen as valuable contributions to the Pinterest ecosystem since they solve for people’s needs.
The first movers to adopt always-on Pinterest advertising were in the retail and packaged goods space, as they offered products and/or places for buying things in Pins to address daily decisions and seasonal celebrations. Over time we’ve seen brands from all categories begin to embrace Pinterest advertising. Interest Targeting on Pinterest allows brands to tap into people’s interests, tastes, and life stages, which has opened up unique opportunities to reach people based on life moments.. As examples, banks can reach home buyers with mortgage ads, hotels can lure honeymoon planners, and auto manufacturers can show minivans to people having babies.
Also Read: Discovering New Ways of Mobile Advertising with TikTok
Goals and Growth
For brand advertisers, reaching people early in the process of decision making is critical. Beyond standard ad formats, video on Pinterest has proved to be particularly effective. In Q2 of 2019, brands using 4C increased their investment in video ads on Pinterest by more than 50 percent over Q1 and over 200 percent compared to Q2 2018.
As Pinterest moves deeper into shoppable ad experiences, the platform will bring greater value to advertisers with direct response goals. A recent Neustar study with retail clients found 2x higher return on ad spend from Pinterest than from social media and a 1.3x higher return than from traditional search.
Given its strength across the marketing funnel, it’s no surprise that Pinterest revenue is growing. Among the hundreds of brands that use 4C to buy advertising on Pinterest, we’ve seen a steady acceleration in the rate of ad spend growth for each of the past six quarters – and Q2 2019 hit triple digits. In other words, from an advertising revenue standpoint, Pinterest has only just scratched the surface.
