
Inside Pinterest and its ad sales operation - prostoalex
http://www.businessinsider.com/pinterest-worth-11-billion-valuation-revenue-grow-5x-2015
======
hayksaakian
speaking as someone who's actually purchased pinterest ads:

the review process is much more careful than facebook or google. they only
really want content that would make sense organically on pinterest.

facebook and google are pretty loose about the "salesy-ness" of ads, but
pinterest is pretty strict in comparison.

obviously with all these restrictions, agencies don't like it because they
have to cater their message to pinterest instead copy and pasting the same
noise on every platform.

pinterest probably won't kill google proper, but I could easily see pinterest
killing google images.

When is the last time a company seriously decided to take on image search at
google scale? Google doesn't even show ads in it's image search.

another reason agencies probably don't like pinterest is the high fixed-floor
bids of 10 cents.

you could have lower effective cpcs, but your ads actually have to be
engaging, and they have to get repins and shares.

bottom line: Pinterest simply demands more effort from advertisers, and
they're pretty picky. Consequently, users don't mind their ads as much.

The best case scenario for pinterest's investors (in my mind) is an
acquisition by facebook as part of a strategy to take on the web search
market.

~~~
pjc50
_easily see pinterest killing google images_

Not with their annoying interstitial it won't. And pinterest isn't great for
finding images of things that aren't "products".

~~~
chestnut-tree
_Not with their annoying interstitial it won 't_

This is my main gripe with Pinterest: the hostile and intrusive block on
viewing the site unless you register first. This wasn't always the case. I'm
guessing the permanent prompt to register turns many users away (I'm sure
they're tracking this this to see how it's faring).

 _And pinterest isn 't great for finding images of things that aren't
"products"._

Pinterest is a great resource for finding visual design inspiration, not just
products. You'll find plenty of design examples no matter how broad or narrow
your search: typography, graphic design, illustration, web design, mobile app
design, book covers, comic book design, calligraphy, geometric patterns,
packaging design, paper sculpture, origami - the list is endless. In fact, the
site deliberately overwhelms you with related pins and pages that scroll
forever to keep you browsing as long as possible.

If you are a designer or developer creating a web site or a mobile app, then
you are missing out on lots of visual inspiration if you don't use Pinterest.

~~~
overcast
That blocking overlay drives absolutely insane when I stumble upon an image
through Google, and it lands there. It's infuriating. I can't see how that
encourages ANYONE to register.

------
frik
Pinterests recommender system algo (picture suggestions) is flawed/broken. It
shows you always the same pictures, of the same k-mean group.

And their nag screen to login/signup is as annoying as on Quora. Btw: Has
Quora completed their pivot already, they joined YC like a year ago?
[http://venturebeat.com/2014/05/09/meet-the-oldest-y-
combinat...](http://venturebeat.com/2014/05/09/meet-the-oldest-y-combinator-
startup-ever-quora/)

Glad to see _pg_ doesn't like the nag screen either:
[https://news.ycombinator.com/item?id=5217449](https://news.ycombinator.com/item?id=5217449)
(full context: [https://www.quora.com/Why-did-Quora-join-
the-2014-Y-Combinat...](https://www.quora.com/Why-did-Quora-join-
the-2014-Y-Combinator-batch) )

~~~
tajen
Pinterest's nagging panel is in my uBlock Origin rules... What a nice era we
live in, where we can ban knee-jerk behavours.

~~~
jsprogrammer
It's an even better era than that: you don't even have to click on a link to
Pinterest.

------
RyanZAG
_> So if you're a marketer with a budget, where do you allocate it? Put it on
Google or Facebook, where there are tons and tons of users where you can
target very well? Or on Pinterest, which is a much smaller audience, female,
lower-income, where you can't target well? It's just not as efficient."_

This part is really interesting considering how other tech companies put a
huge amount of effort into acquiring that exact female crowd from their mostly
male mid-to-upper crowd.

~~~
raverbashing
"considering how other tech companies put a huge amount of effort into
acquiring that exact female crowd"

Exactly this.

Pinterest caters to a niche. You can advertise to your target directly and
probably spending less money

Much better than FB or Google "targeting"

~~~
TheLogothete
ROAS numbers do not agree with you.

~~~
raverbashing
Do you have a quote for that? (Also might be an issue of not tailoring
campaigns to Pinterest)

It seems to be getting behind Instagram, that's for sure
[http://www.adweek.com/news/advertising-branding/new-
social-s...](http://www.adweek.com/news/advertising-branding/new-social-
stratosphere-who-using-facebook-twitter-pinterest-tumblr-and-
instagram-2015-and-beyond-1622)

~~~
TheLogothete
The very same article we are commenting under, for one. And it's not an issue
of not tailoring campagins. In fact, you are forced to make Pinterest-specific
campaigns. It's an issue of inferior ad units, targeting and operations in
comparison with FB and the same plus inferior monetization model in comparison
with GOOG.

I don't know why you linked to that adweek article. It's about demogprahics
and usage, not adspend efficiency.

~~~
raverbashing
Yes, however I pointed the niche potential of Pinterest, which is there
regardless of their inefficiency in leveraging that, which seems to be the
point of the article

------
paulpauper
_The visual scrapbook platform should be printing money. Its predominantly
female audience browses Pinterest 's various boards for inspiration about
their next fashion purchases, vacation destination, or on how to decorate a
house — and they also act as free brand representatives by "pinning" their
favorite products, making them visible to others._

It may come as a surprise to some, but making money is not important. That's
why so many people lost their shirts shorting the 'unprofitable' Amazon.com

Rather, it's the the demonstrated ability to make money, which is more
important. Should the time come to turn on the advertising money printing
press, Pinterest and Snapchat, like Facebook, should have no difficulty making
money. There's already a huge line of advertisers ready to plow hundreds of
millions of dollars into Pinterest ads. Investors are patient, knowing that
Pinterest will start printing money when the time is right. But right now,
Pinterest is still building the userbase and perfecting their ad platform.
Like Facebook, Pinterest's profit margins will be extremely high, and it would
not surprise me if this company is worth $50 billion soon. But right now,
Pinterest, like many web successful web 2.0 companies, is more interested in
taking its time to build positive user and advertiser experience, than milking
every user for every last dime.

~~~
onewaystreet
> Investors are patient, knowing that Pinterest will start printing money when
> the time is right.

 _Someone_ isn't patient, otherwise this article wouldn't have been written.

~~~
asdfologist
Not necessarily. It's trendy these days to bash unicorns.

------
inthewoods
I'm bullish on Pinterest for two reasons:

1\. Limited number of advertising options that reach a broad audience -
especially women. There just isn't a lot of inventory out of there that isn't
cats and dogs. You've got Google and Facebook (Tier 1),
Buzzfeed/Twitter/Yahoo/Bing (Tier 2/3) and then individual media properties
(Business Insider et al) - the tiering here is fairly arbitrary. My point is
that if you are a larger purchaser of advertising, there aren't that many top
properties to go to - so Pinterest, with it's very good audience, is
particularly interesting.

2\. User information from Pinterest is very different from other venues.
Google can show purchase intent based on search criteria - excellent for
immediate purchases. Facebook can show ads based on demographics, location and
behavior. Pinterest can show what users are interested in buying in the
future, or what their wants are - a very unique dataset and one that is very
interesting to a lot of advertisers.

------
DanBC
> The visual scrapbook platform should be printing money. Its predominantly
> female audience browses Pinterest's various boards for inspiration about
> their next fashion purchases, vacation destination, or on how to decorate a
> house — and they also act as free brand representatives by "pinning" their
> favorite products, making them visible to others.

Pinterest tried skimlinking, but the some of the userbase _hated_ that,
claiming it was hurting their business.

When I used Pinterest I would not have cared if they had used skimlinks for
anything I posted, but it doesn't seem to be an option I can turn on. And I
want Pinterest to protect me from people posting their own affiliate links. A
bunch of people post low quality content and stuff it full of affiliate links.
Pinterest is worse with those people on the platform. One thing it could do is
skimlink everything, and charge for people who want to use their own affiliate
links. Most services provided to businesses are charged for, and allowing
someone to run an affiliate marketing business on Pinterest is a service that
Pinterest should charge for.

> You have a lot of lower-income, middle-America people on Pinterest than you
> do on other sites, and it's very female-centric. So if you're a marketer
> with a budget, where do you allocate it? Put it on Google or Facebook, where
> there are tons and tons of users where you can target very well? Or on
> Pinterest, which is a much smaller audience, female, lower-income, where you
> can't target well? It's just not as efficient."

Wait what? I see people pinning stuff for weddings (average cost of US wedding
is $26k) or home redecoration (average cost of US kitchen remodeling is over
$15k) so these may be lower income people, but they have something that
they're saving up for and are prepared to spend considerable amounts of money
on.

Carefully placed ads could be amazing for that market.

The real problems with Pinterest are the _awful_ _awful_ _awful_ mobile
experience which is very hostile to the user. Almost embarrassing. I don't
post any links to Pinterest anywhere because of that hateful experience.

~~~
inthewoods
"The real problems with Pinterest are the awful awful awful mobile experience
which is very hostile to the user. Almost embarrassing. I don't post any links
to Pinterest anywhere because of that hateful experience."

What's awful about it?

~~~
leppr
Try browsing it while not logged-in. You'll never want to come back to it
again.

~~~
inthewoods
So you regard the experience as bad because they don't offer an experience
that doesn't require logging in?

~~~
leppr
They make you taste the product then slap you in the face one second after.
Yes, putting a nag up over content (especially which you don't own) while
someone is looking at it is the mental equivalent to slapping that person on
the face.

Only on the internet does this seem to be a best practice.

(Furthermore there's nothing inherent to the experience's design that prevents
it from being delivered to non logged-in users, the block is artificial, not a
design constraint)

------
franze
Wow, sounds to me that Pinterest is on the right track.

F#ck the CPM sales "community", focus on the product.

~~~
TheLogothete
Yeah, fuck the people who pay you.

~~~
Ronsenshi
So many assumptions in one short sentence.

Why do you think CPM-people pay him? He might as well work in a company that
does not rely on marketing/advertising industry. Those do exist.

Even if he was paid by CPM-people - so what? A lot of people work for money,
not because they like their employers or share same views.

~~~
lmartel
The "you" he's referring to is Pinterest, not the commenter.

~~~
Ronsenshi
Don't quite see the issue. If Pinterest cares about what kind of advertising
to show. If they are interested in a quality curated advertising that fits the
content of the website instead of mindless ads where you only care about CPM -
I'd say great for them and for their users.

> The "you" he's referring to is Pinterest, not the commenter.

It is a commenter that said: "F#ck the CPM sales "community", focus on the
product.". Don't see where is he trying to portray the words as if they were
coming from Pinterest.

------
rajacombinator
Sounds like some VCs really desperate to dump the IPO on the market before
everything implodes (hence pushing this submarine article), some butthurt
sales monkeys who didn't get their commissions, and oh hey there's Pinterest
doing what they've always done, being really careful about building a great
product.

------
paulpauper
Businessinsider is a notorious click-bait aggregator, spinning minutia into
hype.

Reminds be of the Uber California court report they hyped last year, which
predictably didn't really anywhere
[http://www.nytimes.com/2015/06/18/business/uber-contests-
cal...](http://www.nytimes.com/2015/06/18/business/uber-contests-california-
labor-ruling-that-says-drivers-should-be-employees.html?_r=0)

That was seven months ago and Uber didn't die as many predicted it would

Some people so badly want for this to be 2000 all over again they they have to
make things up. They have to turn molehills into mountains.

~~~
eggie
> Some people so badly want for this to be 2000 all over again they they have
> to make things up.

Why do you think this is the case?

~~~
ytNumbers
It's just human nature. Misery loves company.

[https://en.wikipedia.org/wiki/Schadenfreude](https://en.wikipedia.org/wiki/Schadenfreude)

------
nl
Disclaimer: I'm pretty bullish in Pinterest. I wish I could put money into it,
even at the $11B valuation.

 _and it 's not all good_

Well.. now I've read the article I'd agree. But there was nothing in that
article that I found particularly concerning - indeed, the fact they are
focused on product at the expense of monetisation makes me even more bullish.

The thing that does concern me wasn't mentioned though. Their growth seems to
have leveled off, albeit after very fast initial growth[1][2].

[1]
[https://www.google.com.au/trends/explore#q=pinterest%2C%20sn...](https://www.google.com.au/trends/explore#q=pinterest%2C%20snapchat%2C%20ebay&date=1%2F2011%2061m&cmpt=q&tz=Etc%2FGMT-10%3A30)

[2]
[https://www.google.com.au/trends/explore#q=pinterest%2C%20sn...](https://www.google.com.au/trends/explore#q=pinterest%2C%20snapchat%2C%20ebay&date=1%2F2011%2061m&cmpt=q&tz=Etc%2FGMT-10%3A30)

------
TheLogothete
Buyable pins reported to be an (embarrassing) flop, according to an article on
qz.

~~~
eva1984
I think those buyable-button-like initiatives are inherently flawed from
ground up.

Clicking ads, comparing to viewing them, is rare enough, with a lot of are
done by mistakes, so what makes those people think their users could make a
decision of purchase, which often takes several rounds of researching,
comparing ,hesitating to make the final stride, by randomly scrolling through
something might bot even be relevant, is totally beyond me.

Even if the user happens to like the item in the ads, the actual action would
come after several hours, do they expect user to come back to app, find the
ad, then click the buy button?

~~~
keithpeter
Quote from OP

 _" Most notably, Kendall also led the move to narrow Pinterest's ad focus on
just two categories, retailers and consumer-packaged-goods brands, as The Wall
Street Journal first reported in December."_

Smallish purchases (music, books, household items, some aspects of holiday
spending): I tend to go with the first thing I find that _looks right_. I
could imagine using a 'buy' button next to an entry in a discovery system such
as Pinterest, although I'm not in their majority demographic.

Larger purchases (stage piano, new laptop &c): yes, I research and have a bias
towards places where I can try stuff out (I'm old).

This organisation seems to want to specialise.

~~~
ddingus
As I believe they should. I got on Pinterest really early, one of the first
waves of, "you are on the list" invites.

What amazed me is the number of professional women who use Pinterest very
regularly. Often, it's not casual use either. They will get on, and use it
hard for a good long time. Lunch, burning a little time at the end of the day,
various casual times...

The whole thing works a lot like window shopping with friends, and the lists
of things they want and like keeps building. These people want stuff, and they
use Pinterest to refine that want down to a science, at which point they will
be willing to pay easily for things at the top of those lists.

Because it has that shopping, but not really shopping look and feel combined
with the essence of scrapbook creating and sharing activity, careful analysis
and great care is going to be needed to keep it light and as immersive as it
is.

Right now, most users I've had a chance to observe and talk to about
Pinterest, love it. It meets some basic need they have and they will be
willing to help Pinterest make money, so long as that need gets met with a
great experience.

Otherwise, may as well go shopping elsewhere...

------
flashman
I got 'page not found' and had to go here instead:
[http://www.businessinsider.com.au/pinterest-
worth-11-billion...](http://www.businessinsider.com.au/pinterest-
worth-11-billion-valuation-revenue-grow-5x-2015-2016-1)

------
JabavuAdams
I use Pinterest mostly for concept art. I don't think I'd use it at all if it
became overrun by in-your-face ads. Of course, I'm just one user.

------
chris_wot
This article appears to have been pulled. Anyone else getting a page not found
error?

~~~
chris_wot
Ah. Well that's rather stupid, they have detected I'm from Australia, so they
redirect me to an Australian 404 error page. But then they suggest I look on
the U.S. site. and get me to click on:

[http://www.businessinsider.com/pinterest-worth-11-billion-
va...](http://www.businessinsider.com/pinterest-worth-11-billion-valuation-
revenue-grow-5x-2015?r=US&IR=T/?IR=T)

Dang or someone, could you update the link to this URL?

------
awakeasleep
Fellas, that goose must be FILLED with golden eggs!

------
joelrunyon
So wait, the hyped investor valuations aren't going to match what the IPO
valuation will be based on revenues. News at 11.

