To continue momentum and truly rival the likes of Facebook, Pinterest must go global. Still a relatively young network, Pinterest must also manage its rapid growth. The social network is hoping to balance growth and relevance by hiring low key managers in international offices, while developing relationships with high profile brands. At the heart of this strategy is contextualization, setting Pinterest apart from its predecessors. This next-gen network is doubling down on analytics and gaining insight on consumer intent, hoping to monetize a data-rich goldmine Facebook has been chasing from the start.
Also necessary to Pinterest’s success is its ecosystem. Supporting third party apps is key to its expansion strategy, as these services can provide the bulk of analytics and software enhancements as Pinterest continues to establish its user base and build integrated apps of its own. To this end, we can expect more acquisitions, more talent buys and more partnerships.
Lessons in user acquisition
There’s plenty of lessons to be learned from social networks that have come before Pinterest, from Twitter’s focus on user acquisition to Facebook’s premature attempts at monetizing consumer behavior. Now seeking global expansion, Pinterest is taking cues from MySpace. Appealing to local markets, Pinterest is hiring strategic region heads to manage relations between its social network and geographically popular brands. The tactic is indicative of Pinterest’s goals for building out its ecosystem, making an early appeal to brand partners that matter.
France and the United Kingdom were two important target regions for Pinterest’s global expansion, and the managers hired there, Stéphanie Tramicheck and Sarah Bush respectively, certainly seem strategic in more ways than one.
“It’s interesting to see that they have good, relevant profiles that aren’t the typical high profile people that the Twitters and Facebooks of the world would hire,” observes Sébastien Lépinard, Founder and Managing Partner of Next World Group. “Two women, very entrepreneurial, very integrated into the fashion industry. This makes me believe that what Pinterest has in mind is not just developing traffic, but doing partnerships with brands in the lifestyle, fashion and design categories. It’s an interesting angle because you typically associate Pinterest with the major social platforms, but they’re taking a very definitive angle hiring lifestyle managers. This tells you a bit about what they’re planning to do in these countries – looking to those with existing relationships with brands.”
Let’s make a deal
Direct monetization will benefit Pinterest, as its relationships with consumers and brands are converted into marketing schemes. This is really where advertising comes into play, a component of Pinterest’s business that would appear to have been placed on the backburner. Recently taking in a Series E funding round for $225 million and now valued at over $3 billion, Pinterest has yet to turn a profit in just under four years of existence. In an industry where user acquisition and popularity mark both the initial and potential success of a company, Pinterest and its investors are still anxious for future revenue.
The past twelve months have been critical for Pinterest’s advertising schemes, as the pin-board site experiments with “promoted pins.” Working closely with brands and third party services, Pinterest is learning from its ecosystem the best ways to incorporate advertising into its highly social platform. At the same time, Pinterest is hoping to avoid the pitfalls its witnessed from Twitter and Facebook in particular, where rapid growth clouded the direction and implementation of social media marketing solutions. Already Pinterest is showing more promise than its social networking competitors for the realm of e-commerce.
“At a very high level, [brands] are looking to have their products or services discovered,” says Ben Silbermann, CEO of Pinterest. “We’re still learning about the actual creative production process. Different advertisers have different abilities to actually create an ad that works well for this medium. With every new media type, whether it was Google, where you have text ads, or Facebook, which is more social advertising, or folks like Twitter, it takes people time to figure out, hey, what’s my voice in this medium?”
This sentiment is certainly shared by other brands, including Amazon’s flash sale service MyHabit. For MyHabit’s business, there’s this “notion of limited quantities and interesting finds, including vintage products sourced for uniqueness. It’s interesting to see what’s trending for customers on Pinterest differently than Facebook,” explains Matt Repicky, head of marketing for Amazon MyHabit. “Facebook is a great way to share and engage, but on Pinterest you see what’s important in a user’s world.”
Success in context
In order to strike the proper balance between consumer and advertiser, Pinterest must contextualize the experience for both parties. That means leveraging its image-centric boards to inspire discovery across the web, and converting that insight into relevant data points that brands can use.
For users, Pinterest’s contextualization of the web takes the discovery site beyond mere social networking into the world of personalized assistance. Productivity apps such as Springpad and Evernote are also fine-tuning their reach across socialization and recommendations, branching off a string of products like Evernote Food, designed to organize (i.e. contextualize) digital content for the average consumer. Right now Pinterest lacks advanced organization features, but recent acquisitions hint at the platform’s long term goals in this space.
Acquiring Punchfork about a year ago, Pinterest recently launched a recipe search engine in a major move to contextualize much of the content already bookmarked on its site. Mobile also remains an important focal point for Pinterest’s global growth and revenue potential, justifying its purchase of Livestar last year.
Such contextualization extends to Pinterest’s brand partners as well, and this is where analytics plays a strong role in Pinterest’s long term success, creating a service of its crowd-sourced activity to retailers, marketers, entertainers and beyond. In the same way Amazon and Walmart have levied data towards actionable decisions, Pinterest must also provide the right tools to contextualize the user web experience on the behalf of brands.
For Amazon’s MyHabit, the team was able to look at Pinterest’s growth and level of engagement within the platform during a given campaign. More detailed data provides insight as to what users are looking at and for how long, which categories (i.e. home decor, interior or outdoor seating), and better understand how the many pieces of a consumer’s digitally represented intent fit together.
However, Pinterest is still growing as a business and continues to rely heavily on its ecosystem to fill in the gaps. While the pin-board site offers a select toolkit for analytics to brands and advertisers, third party services like Piquora are bridging the analytics chasm.
“Pinterest analytics is designed for small business and pro users, like wedding planners,” says Piquora CEO Sharad Verma, “not designed with an enterprise customer in mind. Ours is core metrics — our analytics are very advanced. I think it’s important for them to demonstrate the value of traffic coming from Pinterest. It’s a good step before asking for money from brands. Our goal is to be very complimentary to Pinterest.”
The next step after analytics is action, and Piquora helps with these efforts as well. Verma’s startup can look at a retailer’s inventory, match it with trending products on Pinterest, and auto-create a custom landing page for incoming users.
While Piquora’s services seem geared towards retailers, Pinterest’s journey to profitability could have something broader in mind. Unlike Fancy, a crowd-sourced discovery tool designed to drive retail purchases, Silbermann wants Pinterest to remain a discovery tool for anything and everything. “It will be getting them to discover the things they want,” he says. “And it may be a product that they buy; it may be a service that they use sometime down the line. But it’s not purely transactional.”