*This article first appeared on the Guardian Media Network

Image-sharing site’s experimentation with different monetisation models, offers brands new ways to engage with consumers

Last week Pinterest announced that it has raised $225m in investment from venture capital firms, making its valuation rocket to a staggering $3.8bn.

After successfully completing a round of fundraising, Pinterest is exploring how to monetise its picture-sharing format. Photograph: Shutterstock

After successfully completing a round of fundraising, Pinterest is exploring how to monetise its picture-sharing format. Photograph: Shutterstock

But how can a site, which hasn’t yet generated a single penny in revenue, be worth so much?

Forget Tweeting, LinkedIning, Redditing or google+ing, apparently now we’re all too busy pinning for anything else. In fact, in February ComScore reported that Pinterest had reached 48.7m users globally.

But Pinterest’s allure is not only based on the huge audience which it attracts, but also on its great ability to drive this audience to other sites, and therefore proving to be a precious tool for publishers and brands.

The latest data from Shareaholic showed that Pinterest drove 3.68% of traffic to publishers in September, second only to Facebook and more than Twitter, LinkedIn, Reddit and Google+ combined.

Another study, conducted by Play.com earlier this month, showed that Pinterest had increased referral traffic to Play.com by 200%, which may explain why the Japanese e-commerce firm, Rakuten became one of Pinterest’s lead investor in a previous funding round.

The social discovery site, in its effort to leverage such a large fan-base and powerful networking potential, has started to try out different monetisation models.

In fact, it has recently struck a deal with Telefonica, (which carries 316m mobile customers), which will see a preloaded Pinterest widget on all new handsets sold in Latin America and Europe.

O2 customers in the UK will be the first to benefit from this exclusive app, providing users with direct access to their personalised Pinterest feed – and giving brands the privileged opportunity to be present on their customers’ most personal device.

Earlier this month, Pinterest went even further, and launched its first foray into paid advertising with “promoted pins”. This move has been a long time coming, as Pinterest tries to monetise the platform to not only prove its value to investors, but to help retailers reach potential customers.

Brands will now be able to insert their own pins into search results and category feeds based on a user’s interest, making the ad relevant and more enticing. Pinterest is currently testing this feature to glean learnings and feedback before launching it to the entire user base.

Specific details surrounding a pricing model for “promoted pins” is yet to be determined and there has been no confirmation as to whether advertising on the platform will expand beyond promoted pins; but brands should start to think about how Pinterest and “promoted pins” can work to amplify their social strategy in the near future.

But why should brands get so excited about Pinterest?

First of all, Pinterest is effective. It uses flow-oriented media, so the information flows to the user in a timely, emergent and engaging manner. Users find it effortless to explore the images and discover products, while brands, through rich pins, can link products directly to their webpage, which features more information and includes current pricing details. Rich pins also show up in search results, enabling the store to determine where a consumer can buy the product they’re looking for.

But even more importantly, brands are able to target a valuable and engaged audience, as the platform attracts people who like shopping and are actively looking for things to buy.

As a result, Pinterest users tend to spend more when they’re referred from the site than Facebook’s, for example.

They’re also interested in what’s hot and see themselves as influencers, so brands can use them to amplify the message and pass it on to other social networks.

In fact, Pinterest works at its best when it is integrated with everything else, widening the brand’s reach and making it easier for consumers to engage at every owned touch-point.

And as for any social platform, it is a great listening tool too, where brands can discover what makes current and potential consumers tick and what might interest them in the future.

As an increasingly highly sophisticated and knowledgeable audience gathers around the platform, brands have to be imaginative and creative in order to make Pinterst work for them. Honda, for example, asked followers to take a “Pintermission” – offering the most active Pinners $500 to go out into the real world for 24 hours and experience some of the things they’d been pinning about. This created a huge buzz and millions were exposed to the #Pintermission boards.

#Pintermission

#Pintermission

So while it is yet to prove profitable, Pinterest, virtually unknown just a couple of years ago, is fast becoming the social platform that brands and retailers can ill afford to ignore.

On October 9th, Pinterest announced their first foray into paid advertising with ‘promoted pins’. This move has been a long time coming as Pinterest tries to monetise the platform to not only prove it’s valuation to current and future investors but help retailers reach potential customers. Brands will now be able to insert their own pins into search results and category feeds based on a user’s interest making the ad relevant and more enticing. Pinterest is currently testing this feature to glean learnigns and feedback before launching to the entire user base in the near future. Specific details surrounding a pricing model for promoted pins is still yet to be determined and there has been no confirmation as to whether advertising on the platform will expand beyond promoted pins but brands can begin to think about how Pinterest and promoted pins can work to amplify their social strategy in the near future.

SO MOnday

February 11, 2013

Abbey Torrance and Lexi Brown round up the best mobile and social news from the past week.

Love is in the mobile air

With Valentine’s Day fast approaching, many people will be buying those last minute chocolates or roses in the name of love. Do they go in-store or online? A recent study by a mobile network has revealed that 52% of women would prefer to buy Valentine’s Day presents for their other halves on their Smartphone rather than go in-store. Valentine’s fever must be spreading the country as the Interflora App is currently ranked in the top twenty in the UK app charts.

Consumers shopping behaviour continues to evolve and a new report stated that 37% of PC users have moved their desktop actions to mobile. Three quarters of Facebook traffic is through mobile now and web browsing is increasingly done on mobile than on desktop.

Debenhams Free WiFi is keeping shoppers happy

In June last year Debenhams rolled out free WiFi to all customers in their stores. Eight months in and the retailer has reported that users have been really positive about the service. Men particularly have been enjoying the free WiFi, with the average time spent roaming at 30 minutes, possibly as they wait whilst their other halves peruse the store. It is a great way of keeping customers in store and online, so they can check for additional sizes/colours if they are out of stock in store. The top ten sites that have been visited whilst in Debenhams are:

1.   Facebook

2.   Sky Sports

3.   LiveScore

4.   BBC Sports

5.   YouTube

6.   Yahoo!

7.   Live.com

8.   Instagram

9.   Google

10.  Tumblr

Add content to your chocolate

Cadbury’s Dairy Milk is letting UK customers personalise their chocolate bars as part of its ‘Joyville campaign’. Users can not only add their names, photos and a message but can also add their own selected web content from YouTube Videos to Facebook photos. Users can compose their bar online at the Joyville Made website or via the Cadbury’s Dairy Milk Facebook app and get their chocolate sent by mail directly to the recipient. Perfect for birthdays and Valentine’s Day!

Lego gets Vine

These simple, well thought out and visually enjoyable vines from Lego are the first branded example that has really understood the platform to create some great stop motion animations.

Straight from the Runway

Fashion shows are expanding into interactive online experiences from Topshop’s live stream fashion show on Facebook that allowed users to take screen shots and share content with Facebook friends to Gucci Connect’s E-vent a live stream of the Milan show where the “virtual guests” could chat liveduring the runway show.

adidas 2013

The 2013 Y-3 runway show from Adidas not only had an interactive live stream of the fashion show, but had multiple cameras which would switch between various live shots both on the runway and behind the scenes. By streaming the show with four different views onto the runway, the online audience could magnify one view without losing perspective of the show as a whole – have a look here. Users could also take snaps of the show and instantly pin them on Pinterest. More backstage content was given through Twitter and Facebook as well. It’s a shame that Adidas didn’t close the loop with the ability to let users click to buy but it’s an innovative way to increase their reach.

The popular image-sharing website will need to show its hand if it is to persuade investors it is worth the $2.5bn valuation it is after, says Lexi Brown.

Rumour has it that Pinterest is seeking additional funding to secure a $2.5 billion valuation, despite the fact that it has yet to generate a significant revenue stream. Investors providing the funding are gambling on the ‘potential value’ of Pinterest and it is clear that they have major expectations.

The big question is how will Pinterest actually monetise the platform and grow as a business?

Pinterest’s main strength is its focus around images. It is less limited by language barriers which increases its potential as an international platform. By connecting people with the same interests via images, the commercial potential of group buying or ‘co-buying’ could be huge. Allowing all those who want to purchase the same product to do so collectively will significantly reduce the price for all parties involved.

Pinterest currently has a ‘gifts’ section which it has probably already monetised. It could feature brands or products here, recommend products to users based upon their interests, or go even further and become an e-commerce site in its own right. I would assume that it is already working as an affiliate but there is also the potential to grow this area further.

Pinterest could also have a featured pins / user section, similar to how Twitter features users similar to those you already follow and Google has promoted search results. It could look into ‘sponsored pins’ whereby it shows pins relevant to the keywords you search for or the pins you have posted. It could also insert pin-shaped ads anywhere on the page, similar to how Facebook has ads directly in users’ newsfeeds.

Another potential revenue stream would be to allow users to turn their pinboards into physical scrapbooks. This would work really well for people collecting information and creating look books for their wedding day, redecorating their home or recipes for example.

Pinterest’s main concern is developing an API which not only provides an important point of integration for retailers whilst extending a seamless experience for the consumer, but also allows the developer community to open up the Pinterest ecosystem.

This is a strategy that has worked very well for Facebook and it now has a very strong developer community.

There is potential for Pinterest to monetise itself through a number of strategies, but if it is to meet the expectations of its investors, it will need to show its hand one way or another.

PINTEREST-ING BRANDS

April 26, 2012

Pinterest has been the talk of the social world for the last few weeks. But how are UK brands are embracing the platform?

Using strategies similar to those employed in the early days of Facebook, Twitter and Foursquare, most brands are running promotional campaigns on Pinterest. BMIHarrods and ASOS are all good examples. This strategy offers freebies and prizes in exchange for likes, followers and, in the case of Pinterest, pins and re-pins.

This is not a strategy to necessarily frown upon. Admittedly its long-term value is questionable but in the short-term it can build a loyal user base.

However ideally, brands should focus on defining their personality and voice on the platform. This will create a community of active users who regularly interact with them, becoming social advocates of the brand.

Advertising through social networks is not new. But on Facebook it feels forced. People can feel conned when liking a Facebook brand page, which actively makes them a brand advocate throughsponsored stories.

On Pinterest however, people are pinning and re-pinning the products and items they genuinely lust after and are happy to let people know from where they can source them.

For ASOS, one of our clients, this is beginning to happen of its own accord (just type ASOS into Pinterest search to see how many items have been pinned). However, ASOS doesn’t just rely on it loyal customers, it has put some thought and effort into their own brand page. ASOS really showcases the essence of its brand of ‘discovering fashion online’ through Pinterest.

Through their boards and pins it is reinforcing how it can help customers who are fanatical about fashion discover the new season trends with those of likeminded people. The ASOS Pinterest page not only connects you instantly to thousands of products, but also inspires you on how you can use these to shape your wardrobe and add to your own personal fashion style.

Mattell has opted for a  different strategy with iconic doll Barbie, attempting to showcase Barbie’s personality by showing what the doll herself would pin. The page is still fairly sparse at this stage and doesn’t link back to the brand.

In summary, there aren’t many UK brands taking the leap onto the platform, and most that have stepped on to Pinterest are playing it safe and testing the water. Hopefully more brands will embrace the challenge soon.

Chances are by now you’ve heard of Pinterest, the’ next big thing’ taking the social media world by storm. The site has been around for a while in the US, but its recent growth in the UK has been absolutely explosive.

The site defines itself as a place to ‘organise and share all the beautiful things you find on the web’. Pinterest is a virtual noticeboard or scrapbook, where users can pin what interests and excites them in different contexts and collections. It is another platform allowing users to express themselves, this time using visual content. And the good news for brands is that users are pinning images of things they lust after, want and desire.

In fact Pinterest is full of good news for brands. The majority of users, 61 per cent, are lucrative ABC1s. More than half the visitors to the site are aged 18-34. It is fairly safe to assume, then, that Pinterest is full of affluent users with a high disposable income and a keen interest in expressing themselves and investing in lovely things. As Russell Davies notes in this piece in Campaign, the stereotypical user is a bride-to-be planning her wedding, creating mood boards showcasing her perfect day. Pinterest is also attracting a substantial amount of users who are looking to redecorate and refurbish their homes and are again creating mood boards and scrapbooks documenting inspiration and their own personal style. Food and fashion are also popular niches. The site allows brands to add prices to each pin – generating a substantial amount of referral traffic and offering real business value from smart use of the platform.

At the moment, there are slightly more female users than male in the UK, although in the US a massive 82 per cent of users are female. ‘If you look at the other sites visited and other interests data for the UK, you see that SEO professionals dominate,’ says Graeme Wood, strategy director at Carat. ‘I’d guess that brands, or people working for brands, make up the majority of Pinterest usage in the UK. Clearly fashion, design and other visually-based professions are making use of the platform, but currently the linkbuilding potential for images is the most valuable usage for brands.’

What Davies also notes is the potential for Pinterest to be used to showcase good taste. Those with an eye for the visual and the ability to sniff out ‘cool stuff’ may be able to utilise that innate sense of style to generate substantial business value for their clients. In fact digital ad agency Work Club is putting this theory to the test by recruiting a creative director through the site. And brands could look to inspire consumers through designing creative and ‘must-have’ visuals to drive interest and sales.

To generate additional visibility, brands can connect with influencers who actively like their products, who in turn will expose their products to new audiences who can re-pin the item to their own board if it appeals to them. This functionality is great for brands launching new products and collections, to get them seen and shared, and offers the tantalising prospect of harnessing the endorsement of users with followers who trust their taste and recommendations. More than 80 per cent of pins are re-pins, according to this analysis of Pinterest by RJMetrics.

 The company itself has kept quiet about its data, but the RJMetrics analysis, which was based upon an analysis of nearly one million pins, noted that the site is retaining and engaging users as much as three times more than Twitter did at this early stage.

But there are still question marks around the site. No UK brands have really begun to dominate the space yet, although in the US Whole Foods, Mashable, Sony Music and Gap have all made their mark using Pinterest.

The biggest danger, however, is that Pinterest will turn into another social network that had its moment to shine but failed to really cash in. The stats show that 23 per cent of Pinterest traffic comes from Facebook, which suggests integrating the site as an app in the new Facebook timeline could have helped to drive the recent spike in growth. Of more concern is the RJMetrics discovery that the quality of new users, whilst high, is declining. Users who joined the site in recent months are two to three times less active during their first month than more established users were during their first month on Pinterest. It could be speculated that the spike in growth comes from users who have heard Pinterest billed as the ‘next big thing’, joined, and found the site wanting. In many ways the rapid growth stage is the most precarious for a new social site. Remember Quora? Exactly.

Stickability is definitely far from established, and there are issues the site needs to iron out, such as the search function that prioritises pins over people. But if brands with online retail sites can harness it, they could see a surge in referral traffic. In fact the brains behind Pinterest might do well to position the site as an affiliate marketer for brands – turning it into a social commerce site rather than just another social network. Michael Roberts, comms planning manager at Carat, says: ‘At a mere two years young Pinterest is now driving more referral traffic than Google Plus, LinkedIn and YouTube combined, with 3.6 per cent of all referral traffic in January 2012 according to Shareaholic blog. To brands looking for visual and curated storytelling opportunities, Pinterest appears to be a substantial and timely place to be.’