This IPO is Pinterest’s attempt at raising the capital it needs to realize a few aggressive market opportunities and growth strategy.
The good news is Pinterest’s goals and aspirations mean great things for marketers on a few fronts.
What Are Pinterest’s Market Opportunities?
Pinterest is doing its best to differentiate itself from other social networks.
It explains, “the natural progression of Pinners’ discovery journey—from inspiration to planning, to action—takes them down the full purchasing funnel, and advertisers can provide value to them every step of the way.”
With that said, Pinterest has outlined two key areas of opportunity:
From an online brand advertising perspective, 97% of the top 1000 searches on Pinterest are unbranded. Stats like this prove very attractive to advertisers to raise awareness at the top of the funnel as those who are searching at this stage do not yet know who or what can solve their problem.
That’s where you, as a marketer, have the opportunity to make a difference in your funnel.
Compared to offline brand advertising, Pinterest believes it has an opportunity to capture advertising dollars traditionally spent on print, direct mail, television, and radio as Pinners' behavior mirrors those seeking inspiration from magazines and catalogs.
This is a huge win for brands that felt like they were left out of the shift to inbound marketing.
In a category like, let’s say, DIY projects, where companies may have felt like they needed to resort to traditional advertising methods for potential customers to find them, Pinterest opens the door for them to be more inbound-y. It connects someone who is actively searching for inspiration with your brand at the start of their search.
Like a magazine or catalog, Pinners are browsing photos looking for inspiration. Unlike a magazine, however, Pinterest enables users to immediately act.
Online Performance Advertising
Here it is, the real bottom line revenue driving stuff you’ve been waiting for.
Its view of bottom-of-the-funnel advertising, or as Pinterest calls it “online performance advertising,” plays into the bigger, overall strategy of Pinterest. eCommerce.
But first, earlier I talked about how Pinterest doesn’t see itself as a typical social network and is working hard to prove it.
It believes that “Pinners don’t just dream about their futures; they explore real options and often want to bring their dreams to life. They browse ideas, visit merchant websites, and eventually buy products and services.”
“These middle- and lower-funnel behaviors,” the team explains, “are highly valued by advertisers seeking consideration and conversions.”
In other words, Pinterest is making its case to advertisers that it has the data they need to better target users that will ultimately attribute to conversions and actual purchases.
According to IDC, search advertising is projected to grow to $169 billion in 2022 from $118 billion in 2018. Pinterest is working hard to capture its piece of the pie.
As I mentioned at the start of this article, Pinterest averages over 2 billion monthly searches.
Untapped potential for advertisers and Pinterest? I think so.
Pinterest’s Growth Strategy
Pinterest has outlined some really cool and seemingly apparent market opportunities, but none of it is possible without the strategy to get there.
This relentless obsession with improving products for both Pinners and advertisers is what will drive future user and revenue growth for Pinterest.
With this in mind, Pinterest plans to grow in two major areas:
This is the term Pinterest uses when referring to the variety of ways Pinners use the platform such as the visual inspiration feed, discovery tools, and most importantly, tools that allow Pinners to go from inspiration to action.
The hopes of making Pinterest more attractive to creators using new(ish) technologies, like Lens, that will help deepen engagement with users.
It is also looking at creating more utilities for users to take action; To make Pinterest more shoppable, and therefore more attractive to marketers and advertising dollars.
It plans to do this through the use of shoppable ads and Product Pins that will make items shoppable with up-to-date pricing, information about availability and links that go directly to the checkout page of a retailer’s website.
Doubling down on the eCommerce experience of Pinterest may be its greatest and most valuable move.
App users are purchasing more than ever and each click they remove from the purchase process adds value to users.
Because we are lazy -- and one click could be the difference between cart abandonment and completion.
This announcement comes just days after Instagram launched “Checkout on Instagram.” Another feature that makes a competing social network more shoppable and attractive to both users and marketers.
Pinterest plans on improving its relationships with existing advertisers by improving its measurement tools that will provide the insights that marketers crave when looking to demonstrate return on ad spend.
The platform’s future advertising improvements include better ad relevance, building new products that deliver value to Pinners as they search, diversifying the advertising base, and investing in both first and third-party measurement tools.
Its targeting verticals such as automotive, technology, financial services, media and entertainment, and travel as a priority, however, as it increases these investments, the hope is that it will attract the ad dollars of SMBs as well.
Although Pinterest is still in the early stages of its monetization and ad offerings, the hopes are that its ability to develop new and improve existing advertising products will be an instrumental driver of future growth.
Why This Matters To Marketers and Advertisers Alike
Pinterest is planning to be the literal one-stop shop for users and marketers.
Its plans to go public and use the money to reduce friction to the in-app purchasing process to make users’ lives easier and update and expand its ad network to deliver more relevant and contextual ads for brands. This music to any marketers ears, especially if you’re in an eCommerce business.
If Pinterest wasn’t already apart of your digital marketing strategy, it may be time to start considering it.