October 31, 2013
*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.
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.
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.