Pinterest announced its quarterly results, beating estimates and providing some good news for the advertising business.
Pinterest reported quarterly revenue of $443 million, an increase of 58% year-over-year (YOY). Similarly, Global Monthly Active Users (MAUs) increased 37% YOY to 442 million.
“More than ever before, people are coming to Pinterest to get inspiration for their lives—everything from planning early for a socially distant Halloween to creating great home schools for their kids,” said Ben Silbermann, CEO and co-founder, Pinterest. “Our top priority is to continue making Pinterest home to the most inspiring and actionable content. This quarter we launched a set of tools to empower creators to show and share their ideas with people who are ready to act.”
Just as telling, however, is the projections moving forward. Based on a rebound in advertising, the company expects an increase in Q4 revenue of roughly 60%.
“The strong momentum our business experienced in July continued throughout the rest of the third quarter. We’re extremely pleased with the broad based strength of our business, driven by recovering advertiser demand as well as positive returns from our investments in advertiser products and international expansion,” said Todd Morgenfeld, CFO and Head of Business Operations, Pinterest.
Pinterest’s results are good news for the online advertising sector, as it’s one indication of a recovery in the industry in general.
“I don’t know about social commerce overall but I definitely know that our users often want to buy the things they find on Pinterest,” said Pinterest CEO Ben Silbermann while discussing going public on the NYSE. “A lot of people say they discovered a product or service while browsing Pinterest,” says Silbermann. “We just want to make it easier for them to go from that inspiration all the way to reality, which in this case would be a purchase.”
Pinterest was initially priced at $19 per share, which gave it a value of $10 billion on Wednesday morning. The company closed Friday up 28% at $24.40, which vaulted Pinterest to a value of just under $13 billion.
Pinterest Goes Public on the NYSE!
Ben Silbermann, co-founder and CEO of Pinterest, discusses on Bloomberg how Pinterest is unique both in how consumers use the product and how advertisements have simply become part of the experience:
The Ads On Pinterest Can Actually Be Really Additive
We really talked with investors about how regular people use the product every day. People use it to get inspiration for a whole range of things, everything from the food they cook to the clothes they wear to their homes. It’s really more about your personal inspiration and it’s less about your friends. It’s not really about following celebrities in the news. We wanted to make sure that everyone understood that because that’s how our users see the product every day.
The thing that makes it really special is that the reason people are on Pinterest is to get inspiration and do things with their life. It’s really lined up with what advertisers want which is to inspire new customers and get them to buy products and services they really love. What that means is that the ads on Pinterest can actually be really additive as long as we do a good job of making sure they’re highly relevant. I think that’s just really different from a lot of media companies where ads are candidly a little bit of a tax. That difference in alignment I think is the biggest difference between us and some other media properties.
My Eye Is On What’s Going to Make Pinterest Great 10 Years From Now
I still think there’s a real opportunity to grow over time and increase engagement. A lot of people might use Pinterest for one thing or two things but they don’t know the wide range of different ways people all over the world use the product. I also got to say that we’re super proud that we’re growing globally. If it (IPO) was just a few years ago the story would have been primarily a US-based service. It’s just really fulfilling for the company to know that the product works all over the world.
We’re in the very first chapter of that story (selling internationally) so we’re just hiring our first local sales teams in places like Canada, Western Europe, Germany, and France. We’re just at the beginning of the journey but I think there’s going to be a real opportunity to show the same great results we’ve seen in the United States to advertisers all over the world. We’re going to continue to invest for the long term. We’ve shown really good margin improvement over the last few years but my eye is always on what’s going to make Pinterest great three years, five years, and even ten years from now. That’s going to be how we continue to run the business and we’re really excited to see it keep growing.
We Want To Make It Easier For People To Go From Inspiration To Purchase
We’re always working to make sure people can bridge that gap between seeing something inspiring and doing it. One area that we’re investing in is making sure that we match inspirational images with more and more products that are at a price point that matters for people and for retailers they really trust. We just enabled people who are retailers to upload all of their catalogs into Pinterest. We’re investing a lot into computer vision technology to match those products with images and we’re not just doing it with shopping, we’re also doing it with all the different use cases. If you have a recipe on Pinterest now you’ll see the ingredients and people can write reviews. If you have a DIY project you can see other people’s experiences, whether it was easy or whether it was a little harder than they expected.
I don’t know about social commerce overall but I definitely know that our users often want to buy the things they find on Pinterest. A lot of people say they discovered a product or service while browsing Pinterest. We just want to make it easier for them to go from that inspiration all the way to reality, which in this case would be a purchase.
Making It Easier For People To Go From Inspiration To Purchase – Pinterest CEO
Pinterest is hard at work convincing businesses to advertise using its Promoted Pins. It’s been emailing profile admins suggesting pins to promote and it’s been selling itself as another option for marketers to spend money from their search budgets on.
CEO Ben Silbermann spoke at IAB Mixx in New York on Wednesday discussing how effective the ads are, and pointing out that few elect to not see them. Martin Beck at Marketing Land says recaps:
Promoted Pins, the main ad product, has been around for 14 months and have very low opt-out rates from users, “rates that are well below the industry,” Silbermann said.
People can’t opt out of the ads entirely, so that’s a little misleading, but they can tell Pinterest when they don’t want to see specific ads. They can also put limits on how Pinterest targets them. The company says this in its help center:
If you don’t like a Promoted Pin, tap the X button that appears on each Promoted Pin, and pick “Hide this Pin”. Pinterest uses your feedback to help make sure you see more interesting and relevant Promoted Pins in the future.
So presumably, what Silbermann meant is that people aren’t doing any of this a whole lot. That’s actually not very surprising, because like search ads, these ads are typically geared toward what the user is browsing in the first place. The fact that a pin has been promoted is likely of little interest to those actually looking for something. To most people, the ad will be just another pin. That does bode well for the format in general.
It’s going to be interesting to see how Promoted Pins perform through the holidays. People are, in fact, already hard at work pinning holiday-themed content.
Pinterest recently announced that it has over 100 million users.
Pinterest is now on the business map, and is now estimated to be a $2.5 Billion company. Pinterest, the newest hit in social media scrapbooking site , is used by web surfers to share and discover images. It has sold $200 million worth of new stocks to new and existing investors for less than 10 percent of the company.
Constantly expanding, Pinterest had 28 million unique monthly visitors last month, compared to last march with 17 million monthly unique visitors. It generates more than 1.7 billion monthly pageviews.
This is a smart investment. Pinterest could be the next Facebook according to investors because its particular platform. Its goal is to drive web traffic and does so more than most other social mediums combined. Revenue isn’t generating from Pinterest, yet. Tim Kendall was hired by Pinterest in March. Kendall is known for Facebook’s monetization strategy. Creating a revenue, or the potential to, translates into Pinterest to being worth much more than anticipated. The possibilities for revenue is there and could explode if Pinterest finds a way to make money from the links posted and shared by users.
