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Introducing its first quarterly results as a public company, Pinterest provided new details on the platform's advertising plans, including the introduction of self-serve ad buying technology and the expansion of the base of brands that spend with the service.
Pinterest, the site where people post products and plan their lives, announced Thursday a turnover of $ 202 million in the first quarter, an increase of 54% year-over-year. He also reported having reached 291 million monthly users, up 22% over the previous year. However, the performance disappointed investors as the company lost $ 41 million in the quarter, which was more than predicted by Wall Street analysts.
Ben Silbermann, CEO of Pinterest, and Todd Morgenfeld, Chief Financial Officer, had a phone call with analysts to explain how the company was hoping to reach a higher level in advertising. Here are the most important parts of the strategy:
Self-service and sales teams
"This is an important investment year for us because we are thinking about the diversification of our advertiser base and it comes in two versions," said Morgenfeld. "One of them opens up new international markets … We are also trying to diversify our advertisers base by investing in self-service tools."
Pinterest has increased its number of international sales offices from 7 to 13 last year. But the self-service advertising platform allows advertisers to set up campaigns without being tied to Pinterest's sales staff. Like Facebook and Google, marketers can plan their campaigns online. It's automated.
Expanding Advertisers
"We are investing in the diversification of advertisers because we believe that the ability to place relevant ads in front of our users depends on our ability to integrate a lot into the auction," said Morgenfeld. is expanding the advertising base. "
Pinterest has so far only a limited advertising base. This is a well documented problem since the company announced its intention to become public and had to file detailed activity accounts for potential investors. In public documents, Pinterest revealed that in 2017, an advertiser accounted for 10% of all advertising revenue during that period. He did not name the mark.
Most of Pinterest's advertisers are brands associated with retail and consumer products, which are considered a natural choice on the platform, as users primarily visit the site for advice on # 39; s purchase. However, Pinterest wants to attract more categories of advertisers, such as travel, financial services and automotive. Self-service ads would help attract small and medium-sized businesses.
Pinterest executives have not revealed the speed with which its base of advertisers is growing, but only that its growth is accelerating. Morgenfeld noted that in 2018, half of the growth in advertising sales came from new advertisers, while the other half came from existing advertisers.
Better technology
"We're still trying to make it extremely easy for an advertiser to run a campaign on their phone," said Silbermann. The plan is "to have a very simple way to see how their campaign is going, and when we talk about self-service, it's all that experience."
In addition to creating its automated mobile advertising platform, Pinterest is investing in better-performing measurement technology so brands can track the success of their campaigns.
Video is an increasingly important format for Pinterest, and Morgenfeld said video ads contributed three times more to first-quarter ad revenue than the same period in 2018.
Pinterest develops video ads that offer the same performance options as static ads. Instead of just generating views, ads can be associated with websites and put options. This means that they evolve from simply achieving general brand goals to measurable goals.
"Video is a bonus [ad] produced for us, "said Morgenfeld." We have seen a very strong adoption … it's an extremely convincing format. "
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