Of all the trends accelerating due to the pandemic, the rapid growth of e-commerce is the one most likely to stay — and Pinterest is poised to benefit.
Not only does the social network have an audience growing at breakneck speed — nearly 50 million new customers started using Pinterest since the onset of the pandemic, according to the company — it has also secured more advertisers over the same period.
As a visual search engine, Pinterest positions itself as an alternative way to reach audiences at a time when many advertisers have maxed out the amount of reach they’re able to get from more search and social media. Plus, the whole Pinterest experience is clickable making it easier for advertisers to turn browsers into customers.
“We’re seeing more of our retail clients particularly the smaller to medium-sized ones, put Pinterest on plans,” said Daisy Leaback, senior account director at Threepipe. “There are a lot more formats on Pinterest now that make it more shoppable for advertisers. Yes, they want to do more awareness, but they ultimately want sales from the media they buy.”
That’s an increasingly intriguing proposition for traditionally reach-based advertisers that are being forced to act like direct-to-consumer ones in the absence of in-store retail. So far most of that interest has come from either larger endemic advertisers in CPG and retail like Adidas and Swarovski or smaller-to-medium-sized businesses. Some spending is also coming from those advertisers in non-endemic categories like finance and automotive, according to the businesses.
“The conversations we’re having with advertisers are really about how they’re going to drive topline sales while replicating some of the traffic that’s not going to be coming into the store,” said Jon Kaplan, head of global sales at Pinterest. “We want to drive more transactions in general.”
New solutions for advertisers launched earlier this week (Sept. 29) reflect this aim. Pinterest opened three of the most visited areas to shop on the site —Pinterest Lens, the shop tab in search and shopping on Pins.
Meanwhile, users in the U.K. will be able to buy more products directly from the platform, whether its from search results, their own personal boards or even through the Lens camera visual search feature.
Pinterest advertisers will also be able to see more clearly the impact of both paid and organic content on-site visits and checkouts when they use the analytics tool Conversion Insights. With less holiday travel and more at-home time do to the ongoing coronavirus crisis, Pinterest, like many other retail businesses, is banking on a sales influx over the coming weeks.
“For one of our other CPG brands, Pinterest has moved to an always-on channel, from only running small tests in 2019,” said Paul Kasamias, managing partner of performance at media agency Starcom. “The platform is used actively for purchases — and planning future purchases — in a way that other platforms provide more passive consumption.”
But Pinterest’s plan isn’t just about convincing advertisers it can help them get early sales. The hope is that advertisers also use the social network to build remarketing and audience segments to be used over the holiday season. In other words, Pinterest wants more advertisers to use it as a full-funnel marketing solution.
Pinterest’s media business is still a long way off the likes of Amazon and Google, but it does sit within a different consideration phase for longer-term purchases. The other e-commerce channels have yet to master these types of purchases so it offers Pinterest space to expand and then work back down the funnel from there.
Take Pinterest’s recent spin on the popular Stories format. Last week, the platform announced it was testing Story Pins, which combine multiple pages of images, videos, voiceover and overlaid text. The aim is to show users how others on the platform are trying new ideas and products. Unlike, other Stories, those on Pinterest aren’t ephemeral, meaning they won’t disappear after a set period of time.
An evergreen feature like this could open up further monetization opportunities, particularly around social commerce, once it is opened up to advertisers. Indeed, social commerce is set to be another big monetization opportunity for Pinterest as it tries to ease its reliance on ad spending. In May, the platform partnered with Shopify to allow sellers in the U.S. and Canada to turn existing products on their store into Product Pins on Pinterest, for example.
“Spending on Pinterest has definitely increased over the last six months,” said Oliver Brooker, head of paid social in the U.K. for Reprise Digital. “With the likes of Facebook being under pressure due to brand safety and policy issues we have seen brands wishing to diversify their spending with Pinterest being high on their place to test budget,”
The success of those conversations will be key for the social network going into a holiday season unlike any other. The usual ramp-up to Thanksgiving and Christmas holidays usually observed by retailers and advertisers will not occur this year. Instead, those businesses are pushing campaigns earlier than ever, jockeying for sales before its too late. That meant a lot more media dollars were locked in earlier than normal.
Pinterest expects revenue to grow in the mid-30% range in its latest quarter to around $364 million. Some of that will be predicated on how well its international business does give that it accounted for 15% of its second-quarter revenues despite making up almost 75% of the user base. In the U.K., for example, the platform has been offering to match the spending of advertisers keen to test the platform.
“Over the summer there was a big drive from Pinterest to incentivize advertisers to spend,” said a media buyer on the condition of anonymity. “If you spent up to a certain amount you would get free advertising worth the same. But you didn’t have to spend lots as we saw some tests for as little £5,000 ($6,429).”