Pinterest is beginning to look a lot like Google.
The company today announced the launch of promoted pins which allow companies like Kraft or Target to sponsor images on Pinterest in its search and category feeds. The images are clearly marked as advertisements and are built on the same basic principle as the ads in Google’s search results: that no matter what a consumer searches for, there’s probably a company that wants to make sure its product is at the top of that list.
Pando’s Carmel DeAmicis noted the similarities between Pinterest and Google in April, when Pinterest announced its improved search feature, writing that Pinterest is to inspiration as Google is to information. This could also help brands advertise to more people, most of whom search for a categories of items on Pinterest instead of specific pieces of information — That is, if it can convince users to click on promoted pin instead of scrolling right past them as they do with Google.
Perhaps the biggest problem standing in Pinterest’s way is its lingering perception as a place where young women plan their weddings or children collect images from Disney movies. The service can be used for so much more than that — it’s not like all photographs relate to weddings or animated films, after all — and its emphasis on discovering new things instead of retrieving old information lends itself to all kinds of use cases. Still, that perception remains.
Google doesn’t have that problem. It’s used by everyone, and hasn’t been pigeonholed to suit one demographic or another. Pinterest might offer better ads, and it might be reaching users when they’re most likely to respond to an advertisement, but Google still has size on its side. S0, as DeAmicis put it in her report: “If Pinterest is successful at its new Guided Search product, well then it may turn out there’s room for more than one Google in this world.”
Reactions from around the Web
Gigaom notes that promoted pins are hardly a novel concept:
Pinterest’s experiment with Promoted Pins — which are essentially native ads within its platform — falls in line with the strategies of other social media companies. Facebook and Instagram have both rolled out advertising units designed to look like user-generated content, and the latter even released a handbook earlier this year to advise brands how to promote within the site. Pinterest’s slow rollout of ads, which also includes an open door for users to provide feedback, shows that it is sensitive to its users, and trying its best not to alienate them as it opens up new revenue streams.
TechCrunch places the announcement in perspective:
The launch of paid ads is a notable milestone for Pinterest, whose massive Series E round of $225 million valued the company at $3.8 billion. The company now has to prove that it can effectively monetize its user base of “tens of millions,” who have now added over 30 billion pins to the service, notes this morning’s blog postabout the launch of paid ads.
Pando weighs in
On Pinterest’s utility outside the veil-and-cartoon movie set:
Anyone who believes Pinterest is only used by scrapbooking grandmothers in the Midwest is underestimating the power of the application. With a huge range of topics on there — from motorbikes, to sports, geek, celebrities, art, science, kids, education, health, and fitness — Pinterest is a visualization and brainstorming tool for a wide swath of demographics.
These demographics come to the website when they aspire towards something and when they want to stimulate themselves, seek out beauty or design in whatever form, indulge in hobbies and passions, cultivate wedding or travel plans, or remodel their home.
And therein lies Pinterest’s sales power. It has the potential to offer ads with high click conversion rates because people see the visual ads for exactly the products and brands at the same time as they’re in the market or at least contemplating the purchasing of such goods.
On Pinterest’s sky-high valuation with no revenues:
It’s a brilliant move for Silbermann to not take money from advertisers for the promoted pins. Then, he doesn’t have to worry about the reality of what companies are willing to pay to be promoted on Pinterest. He can just show investors the world of possibilities.
It’s like a monetization teaser for investors. Pinterest was playing the stripper who daintily picks up her skirt to show a single stocking clad leg beneath it. ‘Here’s a taste of what I have to offer…but if you want more you’ll have to pay.’