Pinterest: The next social ad for SuperFB and Twitter?
Pinterest recently began experimenting with selling ads, which are highly sought after by marketers. Forbes recently wrote an in-depth analysis of the company in terms of service attributes, advertising forms and advantages over rivals, saying the social media service is expected to become an advertising giant, even bigger than Facebook and Twitter.
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A few weeks ago, Pinterest, a social media service popular with women and amateurs, began experimenting with selling ads to its 70 million users. Because many marketers wanted to participate, Pinterest limited the experiment to more than a 10-brand sponsor, which earned more than $1 million per transaction.
It's fair to say that Interest has been quite hot lately. On this visual social network, people can create and share atlases of content, such as recipes, hairstyles, baby homes, and more, on their phones or computers. Pinterest is less than five years old, but just looking at the female community (more than 80 percent of its users) is already more popular than Twitter, which has a market capitalisation of more than $30 billion. Pinterest's U.S. user base is expected to exceed 40 million this year, the same level as Twitter and Instagram. Overseas markets are also catching up with Twitter and Instagram, which have opened offices in London, Paris, Berlin and Tokyo in the past year. International users now account for nearly half of Pinterest's new registered users, according to Semiocast, a market research firm. Its active male users have even doubled in the past year.
So far, Pinterest users have created more than 750 million nail boards, with more than 30 billion nail plates added each day. During the 2013 holiday shopping season, Pinterest accounted for nearly a quarter of all social sharing activities. Of the major social networks, only Facebook, with 1.3 billion users, has overtaken Pinterest in channeling web publishers.
Will super Facebook and Twitter?
This activity sounds striking, but it's not enough to illustrate the huge opportunities facing Pinterest. While it is still in its early stages of commercialization, it is only a matter of time before Interest surpasses Facebook, Twitter and other mainstream social networks in terms of average per-user revenue, according to many analysts and observers. "Pinterest's annual revenue will be billions of dollars. Dave Weinberg, founder of Loop88, a social marketing company, says.
For marketers, Pinterest has a unique value, it is an unprecedented new medium. One difference between it and other popular social networks is the temporal state of content. As Pc ceo Ben Silbermann explains, Facebook is "about your contacts, your past, and your memories." Facebook users voluntarily provide a variety of personal information, such as birthdays, mother's name, emotional status, and so on, which the social network can use to push highly accurate ads. Twitter has less detailed user information, because it earns half as much as Facebook, about $3.50 per user. Twitter's value still exists primarily in "ongoing" events, allowing advertisers to use real-time discussions on popular events such as the World Cup, the presidential election, the hit TV series "Orange Is the New Black" and more.
If Facebook is the dominant past, and Twitter is the dominant theme of the present, then Pinterest's focus is on the future. "Pinterest is about what you want to do, it's about what you want to do next. Silberman said. This future is exactly what brand marketers want. When a user puts a picture of her wedding dress or a coffee table on her nail board, it sends a signal to the merchant that the latter may want to sell her a wedding dress or coffee table. "There is an intention behind every nail." Joanne Bradford, head of business at Interest, said: 'The nail chart is like saying', 'I'm going to put this organization into my life', like cutting a paper out of a magazine. "
Marketers are excited to think of the ability to target consumers at a delicate time when browsing behavior turns into shopping. "From a strategic point of view, one of the things we want to figure out is how to reach consumers early in the inspiration or planning phase. "We don't have a good way to identify consumers in that process," said David Doctorow, senior vice president of global marketing at Expedia, one of Pinterest's chartered advertisers. "
Advertising is currently Pinterest's only source of revenue. But it only takes a small step to become a middleman for hundreds of thousands of retailers that already display their products on its platform. "Our next step will be, how to make it easy for you to shop for the items you want. Silberman said. That's Amazon's place, but Facebook and Twitter have been working on a "buy" button to create a smooth and convenient shopping experience. But Pinterest, by contrast, has a natural advantage in e-commerce. Independent research data show that users of its social platforms are more likely to share product links and complete large single transactions than users of other social platforms.
You have to turn Google upside down.
If Pinterest is to establish himself in the future, it will have to knock down google, a very powerful market ruler. Google is also involved in using buying intent signals to sell relevant information to marketers. That's the basis of its search advertising business, and it's the source of about two-thirds of the company's annual revenue ($55 billion).
Mr Silberman, who worked as a product specialist in Google's advertising division for two years, knows exactly which opponent he will face. In a keynote speech at the Cannes Advertising Festival, he called Google the "ultimate card catalog" - an outdated technology that only comes in handy if you know what you're looking for. Evan Sharp, another co-founder of Interest, also points out that Pinterest "allows people to see the possibilities that they don't know exist."
Pinterest seniors call this open search form a discovery. Tim Kendall, Pinterest's head of product, says coming up with how to do this well "is the biggest business opportunity in the internet space for the last 10 to 20 years." His chosen time frame is no accident: as Facebook's director of monetization from 2006 to 2010, he shaped the strategy that ultimately put the social network at a market value of more than $200 billion. In Kendall's view, Pinterest will be bigger than Facebook and Google. "That's why I joined Pinterest. "
So far, Pinterest has received $764 million through seven rounds of financing, with investors including FirstMark Capital, Andreessen Horowitz and Bessemer Venture Partners. In May, it completed a $200m capital raising at a valuation of $5bn, giving it the "fuel" to expand internationally.
The company currently employs more than 400 people, up from less than 20 at the beginning of 2012. It recently signed a lease on the new office building (its current building has only been in place for two years). "I spend a lot of time trying to do a good job of internal communication to make sure people move in the same direction. "Technology makes it easier for small teams to scale products quickly, but no one has been able to invent something that makes it easy to build a corporate culture quickly and proportionately. "
The cornerstone of Pinterest culture is a principle called Knit. Other big tech companies in Silicon Valley are led by some kind of skilled person - Google is an engineer, Apple is a designer - and Pinterest solves problems by combining different skills. "In that case, you can do something that a specialist can't do on their own." Kendall, the company's chief product officer, said. "We're trying to create a culture that highly appreciates talents. Sharp said.
Promoting nail-push items
In Bellevue, Washington, a group of Pinterest ambassadors met to teach Expedia executives the art of nailing. Larkin Brown, a user experience researcher, explains to them the different purposes of the product - planning projects, comparing different styles, or simply getting inspiration - that correspond to the stage of product purchase: cognition, consideration, preference, and purchase. "It's understood that the nail plot triggered this pattern. Brown said. Then Kevin Knight, Pinterest's head of advertising agency and brand marketing, stressed that every nail board created by a brand should correspond to a possible interest, because that's how users organize their own nail boards. "Outdoor furniture is not an interest; He said. Expedia spent more than $1.7 billion on advertising and marketing in 2013, and its brands include Expedia.com, Hotels.com and Trivago.
Pinterest held the five-hour workshop for more than a dozen partners in its PromotionPins project, each of which invested $1 million to $2 million in a six-month promotion. After participating in the workshop, the participant's pin interaction rate was usually increased by 25 per cent. Bradford, which sells, says that making sure advertisers know what's going on before they start spending money can make sure they're happy with the performance of their ads. Pinterest must also ensure that they are satisfied, as they are said to pay Pinterest between $30 and $40 per thousand impressions, several times the cost of Facebook.
Compare Facebook's advantages
Similar to Facebook's sponsored posts and Twitter's promotional tweets, Pinterest's promotional pins are a native form of advertising, in the same way that users generate content. Native ads are suitable for serving on a phone screen, where ads must appear in the main stream. According to comScore, more than 90 percent of Pinterest's usage comes from the mobile side, higher than Facebook (68 percent) and Twitter (86 percent).
Compared to other social networks, Pinterest has an advantage over native ad displays. Facebook may know you're a Cleveland Browns fan, wearing XL code, but when it shows you an ad about a Browns jersey in Your News Feed, you still feel intrusive, after all, who's going to buy a jersey on Facebook?
Pinterest users, on the other hand, are essentially in a state of planning how to spend their shopping. If you're browsing the beach vacation idea, Expedia's instagram display of beach resorts around Cancun won't intrude you - it's more information for you. "Pinterest is a place where people love to discover things. "Brands are the center of that place, " says Don Faul, the company's head of operations. "To avoid advertising being too much like advertising, Pinterest has developed some basic principles: each promotional nail-pin must initially be a generic nail-biting on a partner's nail board, and partners are not allowed to engage in gimmicks such as price promotions and contests."
The right situation means everything, especially for high-end marketers. Marissa Mayer, Yahoo's CEO, calls the situation a "Vogue phenomenon", meaning that magazine ads look like part of the overall reading experience, while online advertising is always offensive. Yahoo's $1 billion acquisition of Tumblr, another visual social network, is intended to recreate that phenomenon at the pixel level. By contrast, Pinterest, who has a larger, more active audience, is more likely to do that.
"On Pinterest, people at least show some intent to get what you're giving them. "As a luxury brand, this is a big step in the right direction," says Megan Burns, marketing director at Vineyard Vines. We can buy impressions all day long, but the point is to keep people in touch with the brand. "
Pinterest offers a suite of tools to help brands negotiate the time and return on their investment, and to work with them to develop new measurement tools that meet their needs. Mr Burns said his company's network traffic and new users had grown since it began to launch the pay-per-view campaign, and its non-pay pints had performed better in terms of audience reach and interaction. A data analysis of 25,000 retailers showed that Users of Pinterest's e-commerce site were 10 per cent more likely to end up shopping on orders than those on other social networking sites. Still, Burns wants to see more evidence that the brand's Pinterest fans can turn into sales. "I'm looking forward to another number saying, 'Shoppers are going to shop here.' "She said.
Once this happens, can Pinterest sell the product directly? E-commerce is clearly part of the Pinterest road map, and although it has ample financial support, the business has not yet been formed. It still employs only one-eighth of Twitter's workforce, much less than Facebook and Google. Pinterest is still a one-off, although this gives competitors a first-mover advantage.
That didn't bother Silberman and Sharp. Their minds are not on selling goods to their users.
They are now looking at a much bigger business opportunity than e-commerce. "How do we do what Google does in search in the discovery space?" Silberman mused, "How are we going to show you what you don't know you're looking for, but what you'll like?" We believe that if we can answer this question, other businesses will naturally come to an end. "
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