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Research Outline
Prepared for Valentina B. | Delivered July 15, 2019
Pinterest's Business Model
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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.
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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.
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