Pinterest, an online pinboard where you can discover new things and collect stuff you love, has just announced that it will start to experiment with advertising.
The $2.5 billion dollar company (as of February 2013), has just shared with its user that they will be experimenting with “promoting certain pins”. Here’s the note by CEO Ben Silvermann:
“Just over a year ago, my wife and I welcomed our son into the world. Since his first day, I’ve been pinning fun things we can do together, right now while he’s still little and later when he gets older. I know many of you do the same. Pinterest is where you keep your wishlists, vacation plans, dream home ideas, and other things you want to do soon and in the future.
That’s why for us, it’s so important that Pinterest is a service that will be here to stay. To help make sure it does, we’re going to start experimenting with promoting certain pins from a select group of businesses.”
Finally after four years, the company is taking a serious look into monetizing its users. The trend for Silicon Valley companies has always been to scale up and get as many users as you can, and then figure out its monetization and revenue model. Facebook, Google, Twitter, LinkedIn are all examples of these companies with phenomenal success.
And all of them relies on advertising as their main revenue stream.
Unsurprisingly, Pinterest is following suit. The initial tests of ads will be in search results and categories feeds. For example, when you search for healthy food, you might see a salad serving from a local shop that had pinned the food. This was, businesses are able to amplify the reach of their organic content by paying for “promotion”.
Pinterest’s growth is slowing down, so it’s business time:
Perhaps another point worth noting is this: its web total unique visitors number is dropping. According to web traffic analytics company comScore, Pinterest had 46.9 million monthly unique visitors worldwide as of July, down from a high of 54.2 million in April. The analytics firm says Pinterest.com had 3.8 million average daily visitors in July.
Another analytics service Compete also had a similar observation: pegging Pinterest’s US monthly unique visitors at 29.6 million, down from 32.2 million in May.
While its web traffic might be falling, Pinterest told Techcrunch that its mobile and total traffic is actually growing. While its not clear what Pinterest’s mobile user count is, Google Play puts its total app download numbers between 10 million to 50 million installs.
Here’s the statement by Pinterest on its mobile growth:
“The world is going mobile and we’re excited about that trend. Traffic continues to grow, breaking records consistently month over month and week over week. Mobile usage became the majority of traffic last summer and continues to grow in absolute numbers and as a percentage of traffic, which may account for third party discrepancies in measurement.”
Perhaps this is why the company is finally starting to look carefully into monetization. We know for a fact that mobile monetization is still a tricky thing to nail. Why? Dominant players such as Twitter, Facebook and Google have been scratching their head on how to do “mobile advertising” right without turning off their users. Recently Facebook owned Instagram joined the advertising bandwagon too, rendering advertising even more competitive for Pinterest.
With Pinterest’s traffic shifting from the web to mobile, it is definitely best for the company to monetize their users first before it is too late. With growth slowing, it’s definitely time for real business now for Pinterest.
Soon, there will be promoted pins showing up on Pinterest, like how there are promoted posts and tweets on Facebook and Twitter.
Oh, and congrats CEO Ben for being named Fortune’s 40 under 40! And Marissa Mayer too.
Ads are coming to your favourite services: First it’s Instagram, now it’s Pinterest – Click To Tweet