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Pinterest confidentially filed for an IPO last week, seeking a valuation of $12 billion, per The Wall Street Journal.
While Pinterest isn’t going to threaten the duopoly — the visual search engine commands only about 0.6% of the US digital ad pie, per eMarketer estimates — it will become a bigger player in the digital ad space. Pinterest is projected to nearly double its ad revenue to more than $1 billion by 2020, up from an estimated $533 million in 2018, per eMarketer.
Its revenue growth will likely further accelerate as Pinterest makes moves to boost brand attractiveness ahead of its IPO: In late 2018, the company hired its first CMO, and it revamped its self-serve ad buying platform, Ads Manager, for instance.
Filing to go public signals that Pinterest is confident in its digital ad business, and two key strengths could explain why:
- Brand safety is a platform priority. Pinterest has a clean reputation and is willing to keep its platform free of nefarious content, even if that means making tough decisions that border on censorship. Pinterest has stopped surfacing results for vaccination-related searches in a bid to curb the spread of pervasive misinformation around anti-vaccination, per The Wall Street Journal. The move represents a drastic decision by the platform to eradicate an entire interest category to maintain the health of its community, a length other platforms have been unwilling to go to. Pinterest’s willingness to make such decisions indicates that its priority is user and brand safety — a departure from what other platforms have signaled, and something marketers will be encouraged by. Just last week, a new wave of brand safety backlash hit both YouTube and Facebook: If such debacles continue, more marketers could be inspired to shift spend to a more stable standby.
- User behavior lends itself to social commerce. Pinterest is a strong ad platform because of its highly visual nature and the aspirational way its 250 million users engage with content on the platform: Users collect their wants and interests on visual digital boards. That behavior can more easily drive purchase intent, as 78% of Pinners say it’s useful to see content from brands on the platform, and 83% of weekly Pinners have made a purchase based on Pins they saw from brands, per Pinterest data. And Pinterest drives more referral traffic proportionately to shopping sites than rival social platforms: 33% more than Facebook, 71% more than Snapchat, and 200% more than Twitter. Pinterest is likely to continue expanding shoppable features to drive shopping behaviors across its platform, which could help it to drive higher ROI in the form of sales conversions for brands. For example, in late 2018, Pinterest expanded access to its buyable “Shop the Look” Pins, which allow brands to directly shop products in an image. In tests, the product boosted ad impressions by 25%.
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