Brief:
- Pinterest reported its holiday-quarter revenue surged 46% to a record $399.9 million from a year earlier. The social media company also launched a verified merchant program to help shoppers find and buy from trustworthy brands, according to a separate announcement.
- Pinterest set up a waitlist for the program, which will require sellers to share a clear shipping policy and customer service contact information, among other features to support the online shopping experience. The image-pinning platform also restricts marketers of financial services, alcohol, tobacco and gambling, among others, from becoming verified merchants, per its website.
- For the full year, Pinterest reported a loss of $1.36 billion as expenses more than tripled to $2.53 billion. Revenue lifted 51% to $1.14 billion, while the company's user base expanded 26% to 335 million, beating estimates of 331.3 million, per data cited by Reuters. Pinterest forecasts 2020 revenue of about $1.52 billion, compared with analysts' average estimate of $1.5 billion.
Insight:
Pinterest's verified merchant program gives marketers another way to reach consumers who express their purchase intentions by collecting images of products and services they might want to buy. As Pinterest's user base expands, marketers can reach online consumers who spend more time on digital platforms than with traditional media channels like broadcast TV and print.
Almost all (97%) of the top searches on Pinterest are unbranded, according to the company, giving merchants a chance to stand out. Meanwhile, 83% of "pinners," as the company calls its users, have made a purchase based on branded content on the platform, per Pinterest.
The new verified merchant program is the latest piece of Pinterest's recent push into e-commerce, aiming to convert passive pinners into active shoppers. By requiring merchants to meet certain guidelines, Pinterest can reinforce the idea that it provides a safe place to shop. That theme is consistent with last year's effort to emphasize Pinterest as a "place for inspiration" while resisting the "social network" label in preparation for an initial public offering. To prepare for the holiday shopping season, Pinterest in November created the @PinterestShop to showcase a selection of smaller merchants selling products on its platform. Last month, it debuted a shoppable augmented reality (AR) try-on feature for cosmetics brands selling lipstick on the platform.
"Pinterest continues to perform well for brands, and this is reflected in media budget allocation," Aaron Goldman, CMO at marketing technology company 4C, said in a statement to sister publication Mobile Marketer. "While brands in the retail and packaged goods categories have been prevalent on Pinterest for years, we're starting to see much more adoption from advertisers in categories like travel, financial services, entertainment and automotive."
Pinterest's quarterly and year-end results indicate that advertisers have boosted their spending on the platform. It doesn't break out sources of revenue, but its 46% growth is greater than the gains of major digital media rivals, although from a smaller base. Snap's Q4 revenue rose 44% to $561 million, while Facebook's ad revenue advanced 25% to $20.7 billion. Google's YouTube boosted revenue by 36% to $15.1 billion, while the search giant's total ad revenue rose 17% to $37.9 billion. Twitter's ad revenue increased 12% to $885 million, per a quarterly report. Meanwhile, e-commerce giant Amazon boosted ad sales by 41% to $4.8 billion.
"Pinterest's impressive Q4 revenues and swing toward profitability prove the company is realizing its potential. Recent product improvements are driving engagement with both users and advertisers in the U.S., while momentum in international user growth and monetization lays the foundation for a strong 2020," eMarketer Principal Analyst Andrew Lipsman said in emailed comments to Mobile Marketer.
