Research Outline

Pinterest's Business Model

Goals

To understand how Pinterest has monetized their platform in order to action upon their revenue channels. One known channel is their use of sponsored posts.

Early Findings

  • Pinterest recently raised $1.43 billion after its IPO in May 2019.
  • In the run-up to its IPO, the company released its S-1 document, which gives significant insight into its earnings and different revenue channels. Their 2018 revenue was $755.9 million primarily from advertiser relationships. The quarterly average revenue per user was $3.14 in 2018.
  • "Performance" pins make up around 2/3 of Pinterest's revenue. These are "Promoted Pins" (sponsored posts) bought by advertisers that show up in a user's home feed and search results. All ads on Pinterest are bought via an auction system.
  • Its main advertisers are in the CPG and retail verticals.
  • The rest of Pinterest's revenue generally comes from click-to-buy shopping ads on the platform which use a "buy it" button to integrate with Pinterest and major ecommerce platforms BigCommerce, Shopify and Salesforce Commerce Cloud so users can buy directly, rather than visiting a merchant's separate site.