Pinterest's Business Model
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.
- 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.
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