OK, so ‘poor’ may not be the best adjective for the company, which has raised $564 million to date. Unlike both Facebook and Twitter, however, it has no source of revenue.
But Pinterest is growing up; According to Ad Age, it’s one step closer to start making some money for itself.
While its first advertising product isn’t available yet, the social network is asking for commitments of between $1 million and $2 million from marketers interested in buying ads on the platform, the outlet reported. In addition, Pinterest wants to charge between $30 to $40 per 1,000 views (CPMs) for promoted pins that, like promoted tweets or Facebook posts, would display featured products in users’ Pinterest feeds. (As a metric, CNN and CBS reportedly charge slightly more than $20 per 1,000 views for online video commercials.)
Pinterest began testing promoted pins on both its web and mobile apps about six months ago with a set of undisclosed businesses. Ben Silbermann, Pinterest’s CEO, was very clear that the intention was to test the ad product, not make money. “Nobody’s paying for anything yet—we want to see how things go and, more than anything, hear what you think,” he wrote in a blog post.
Is Pinterest crazy for suddenly demanding high prices for promoted pins? Probably not.
It’s been speculated that Pinterest’s influence is often downplayed in the media because the majority of its user base is female – 83 percent of “pinners” are women, compared to 53 percent of Facebook users and 49 percent of Twitter users. But women are more likely to interact with brands on social media, and they buy more online.
In addition, Pinterest users tend to be well-educated with high average annual incomes. That translates into sales. Sephora’s Pinterest followers spend fifteen times more that its Facebook fans; Pinterest shoppers in general spend significantly more per checkout, averaging between $140–$180 per order compared with $80 and $60 orders for Facebook and Twitter shoppers, respectively. And a recent study of 1,000 brands by Piquora, a company that helps retailers run Pinterest campaigns, found that an average pin generates 78 cents in sales and drives two visits to company websites.
All in all, the social network drives purchase intent and brand engagement like no other platform.
In other words, it’s marketing gold.