Investing News

Founded in 2010, Pinterest (PINS) is a San Francisco, CA technology company that is best known for its pinboard-style photo-sharing website. Users leverage the platform to create and manage theme-based photo collections of hobbies, events, or anything else of general interest. Pinterest went public through and initial public offering in April 2019 and the stock trades on the New York Stock Exchange under the symbol PINS.

A Unique Way to Share Photos

The rise of social sharing has been meteoric over the past decade, highlighted by Meta’s (formerly Facebook) $1 billion acquisition of Instagram and the continued success of Snapchat. Advances in digital photography are certainly one reason for the increased social sharing. With traditional photo-sharing websites—such as Facebook, Instagram, or Snapchat—users share their personal photos with friends and family.

Key Takeaways

  • Pinterest is a San Francisco-based social media company that offers users a platform for sharing photos and video.
  • Shares of the company trade on the NYSE under symbol PINS after an April 2019 IPO.
  • Pinterest monetizes its social media websites by selling digital advertising in a unique, targeted, way.
  • Pinterest is different than Facebook or Twitter because it wants users to use the platform as a tool for planning future projects.
  • In some ways, Pinterest is more of a search engine than a social media site because it allows users to stumble upon unique pieces of new information.

Pinterest is a unique platform with an equally unique business model that differentiates it from other photo-sharing websites. Rather than having users share photos directly with friends, users instead curate personal pinboards of existing photos uploaded by friends, strangers, and even companies. In addition, users can upload their own photos and pin to their online portfolios, which are known as pinboards.

Registered users can upload, save, sort, and manage images, as well as other consumable media content such as videos. This creates a more personal experience for individual users and still allows friends of those users to see what they’re up to by checking out their personal pinboards.

While Pinterest is often lumped together with other social media websites, the company does not approach its business or business model in the same way. The company views itself as a discovery service, and it helps its users plan for the future by allowing them to curate images or a set of images. For example, one of the top use cases for Pinterest is women that are planning their future weddings.

New Updates and Improvements to Advertising Strategy

One way to monetize social media websites is through digital advertisements. Pinterest knows this, and it created a business plan that monetizes the platform with advertisements. However, the company does it in a unique way.

While the Facebooks of the world charge advertisers based on the cost-per-click model (CPC), Pinterest has created a promoted an ad strategy that charges advertisers on the engagement or action. This means that an advertiser only pays when an existing user engages with a promoted pin, which has the potential to increase the advertiser’s return on investment. Pinterest also offers CPC and cost per thousand (CPM) options for advertisers.

In addition, with Pinterest’s unique use of pinboards, advertisers can target users based on their interests, personas, or life stages. Doing so gives advertisers the chance to target potential customers on a more granular level than they can on other social sharing platforms, which can provide an added boost toward a positive return on investment (ROI) on advertising budgets.

Pinterest has also introduced an in-house creative studio, the Pin Factory, which allows advertisers to pay for more appealing promoted pins. That is, the service helps advertisers design images and write more engaging descriptions.

Focus on Discovery

While other social sharing sites focus on the interactions between friends, Pinterest has built a business model that instead focuses on letting its users discover new and interesting things. In this way, Pinterest is highly differentiated from Facebook or Twitter in that the company wants its users to use it as a tool for planning future projects.

In some ways, Pinterest should be seen as more of a search engine than a social sharing site because the company allows users to stumble on new information rather than look for specific pieces of information, which makes the business model unique. This focus on discovery is highlighted by Pinterest’s partnership with Apple, which allows users to discover new apps in the Apple app store.

Articles You May Like

Faraday Future (FFIE) Stock: To the Moon or Straight to Zero?