Business Model of Pinterest: How It Became Successful

In our previous article, we explored the business model of Jolibee. Today, we’ll dive into the business model of Pinterest, a social media platform enabling users to discover, save, and share ideas through visual content and curated boards.

As one of the largest social media platforms in the world, understanding the business model of Pinterest is essential. Pinterest stands out as one of the most successful social media platforms, allowing users to explore their interests in a fun and interactive way, with content curated specifically for them.

Ranking as the third-largest social networking site in the U.S., Pinterest boasts over 367 million active users globally and a customer base of 460 million people worldwide as of 2020.

To decode the success of this social media giant, we have curated this detailed case study on the business model of Pinterest, covering its revenue model, value proposition, key partners, and other important aspects of it.

About Pinterest

Source: Google

Pinterest, founded by Ben Silbermann, Evan Sharp, and Paul Sciarra in 2010, is a visual discovery engine that allows users to find ideas and inspiration for their projects and interests. The company’s mission is to inspire everyone to create a life they love. Key milestones include its IPO in April 2019, reaching over 450 million monthly active users globally, and developing innovative features like ‘Pinterest Lens’ and ‘Shop the Look’, which have solidified its position in the social media and search engine markets.

As a social media site for sharing and categorising images from the Internet, Pinterest is often described as a visual bookmarking platform. The name Pinterest combines two words, ‘Pin’ and ‘Interest,’ reflecting its function. It offers a wide range of categories, including food, fitness, architecture, and more.

Pinterest revolutionised hobby and interest exploration by creating a platform that serves as a mediator between sellers and consumers. Pinterest for business has rapidly become a powerful tool for marketers worldwide. The company continually adapts its Pinterest business model to ensure user engagement which has developed an effective participation from users and content contributors, fostering community growth.

Updated Statistics

• Monthly Active Users: 450 million as of Q1 2023 (Pinterest Quarterly Report, 2023).
• Annual Revenue: $2.8 billion in 2022 (Pinterest Annual Report, 2023).
• Market Capitalisation: Approximately $22 billion as of 2023 (Yahoo Finance, 2023).
• Pins Saved: Over 300 billion Pins were saved by users (Pinterest Statistics, 2023).

Business Model of Pinterest

A business model outlines a company’s strategy for generating revenue. It defines the products or services the business plans to offer, its target market, and anticipated expenses.

Pinterest’s business model focuses on helping users discover recipes, images, and various items, consolidating diverse visuals from the internet into one platform. For those interested in a long-term strategy to make money on Pinterest, options include writing blogs, working as a virtual assistant, and becoming an affiliate marketer, among other opportunities.

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1. Pinterest Business Model: Market Share & Analysis

Source: Google

Pinterest holds a unique position in the social media and search engine markets(Competitive platforms for web searches) with a significant share in the visual discovery and planning niche. It competes with platforms like Instagram, TikTok, and Google Images but stands out due to its focus on idea generation and project planning.

Market analysis indicates that Pinterest continues to grow its user base and engagement, driven by its strong appeal to DIY enthusiasts, home decorators, and fashion lovers. This success highlights the effectiveness of the Pinterest business model.

2. Pinterest Business Model: Product Offerings

Pinterest offers a variety of features, including Pins, Boards, and the Home Feed, which allow users to save and organise ideas. The platform also offers ‘Pinterest Lens’ (a visual search tool) and ‘Shop the Look’ (which enables users to purchase products directly from Pins).

For businesses, Pinterest provides advertising solutions like Promoted Pins, Video Pins, and Shopping Ads. These product offerings cater to both individual users seeking inspiration and businesses aiming to reach their target audience, showcasing the Pinterest value proposition.

3. Pinterest Business Model: Target Audience

Pinterest’s target audience primarily consists of women aged 18-49, who make up around 70% of its user base. However, the platform is increasingly attracting a diverse demographic, including men and younger users. Pinterest appeals to individuals interested in DIY projects, home decor, fashion, and cooking.

For businesses, Pinterest offers a valuable audience that actively seeks inspiration and is ready to engage with brands. The business model of Pinterest has two key players: Pinners and Advertisers. According to the data, 72% of Pinterest users are women followed by 19% of men. Therefore, the key customers of Pinterest are women users.

Pinterest calls its users ‘Pinners’. Blogs are called ‘Pins’. Those pins are customised and organised according to the user interests within the pinboards.

Pinners get this service for free where they don’t need to pay money. The Pinterest business model is completely built on top of its Pinners, where they are the core of the business. More precisely, Pinterest claims to work on providing the ‘right’ content for its Pinners, using the following principles at its core: Transparency, Enforcement, and Accountability.

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4. Pinterest Business Model: Funding & Investors

Pinterest has raised significant funding from various investors, including Bessemer Venture Partners, Andreessen Horowitz, and FirstMark Capital. The company went public in April 2019, raising $1.4 billion through its IPO. This financial backing has enabled Pinterest to invest in technology, expand its features, and grow its user base globally, strengthening the Pinterest business model.

5. Business Model Of Pinterest: Revenue Model

The Pinterest revenue model is primarily based on advertising. The platform generates revenue through Promoted Pins, which are native ads seamlessly integrated into users’ feeds, and Shopping Ads, which allow businesses to promote their products directly. Pinterest also offers Video Pins and Carousel Ads, diversifying its advertising formats. The platform’s focus on visual content makes it an attractive option for brands looking to showcase their products and drive engagement.

Pinterest earns its revenue by charging on the ads they show. The person running the advertisement on Pinterest has to pay Pinterest depending on the different types of advertisements they choose. Some of the pricing methods of Pinterest are:

• Cost per thousand impressions (CPM)
• Cost per Click (CPC)
• Cost per action (CPA)
• For videos: Cost per View (CPV) or CPM

6. Business Model Of Pinterest: Marketing Strategy

Pinterest’s marketing strategy focuses on leveraging its visual discovery engine to attract both users and advertisers. It uses data analytics to personalise user experiences and improve ad targeting. Pinterest also engages in content marketing, influencer collaborations, and partnerships with brands to enhance its visibility and user engagement.

Additionally, the platform invests in SEO and social media marketing to drive traffic and growth. A big part of digital marketing is also covered in this digital marketing course online with placement. Pinterest markets itself as a visual discovery platform and targets users looking for inspiration. With its stunning visuals and personalised touch, it tailors its content to the interests of its users, making their experience unique. It also partners with brands, influencers, and content creators to showcase their products and ideas organically, subtly blending advertisements into the user experience.

Pinterest’s marketing strategy also involves empowering users to freely market their products and ideas. By letting users showcase their discoveries, Pinterest essentially promotes itself for free, tapping into the collective creativity and interests of its users.

Essentially, Pinterest heavily relies on its users’ natural promotion to grow and gain visibility without traditional marketing tactics. This approach is integral to the business model of Pinterest, highlighting how user-generated content drives both engagement and growth.

Let us now have a look at digital marketing strategies used by Pinterest in recent years:

1. It’s Possible Campaign:

The ‘It’s Possible’ campaign is one of the most successful campaigns by Pinterest. Interestingly, the same has been running for quite some time. It is designed to show users how easy it is to discover new opportunities, ideas, and places with Pinterest.

In the most recent phase of the ‘It’s Possible’ campaign, Pinterest released many video ads showcasing the diverse possibilities available on Pinterest. The ads show us how people are using Pinterest to plan and execute projects such as decorating their homes, planning vacations, and throwing parties.

One of the ads under the banner of ‘It’s Possible’ is the 90’s Party which shows us how a woman uses Pinterest to try various fashion trends from 90’s.

As of now, this ad is one of the most popular videos on Pinterest’s YouTube channel with 1.2 Crore views.

Apart from ads, Pinterest also launched pop-up shops in London as part of this campaign where visitors could get beauty bars, create mocktails, and get a tattoo.

2. Not Just Ken:

‘Not Just Ken’ is another great extension of the ‘It’s Possible’ campaign. For this campaign, Pinterest partnered with Warner Bros. Pictures at the time of the Barbie movie launch. The campaign put the spotlight on the character of Ken and encouraged users to embrace their unique aesthetic preferences.

As of now, this ad is the fifth most popular video on Pinterest’s YouTube Channel with 46 lakh views.

For this campaign, Pinterest capitalised on the trending searches related to the ‘Barbiecore’ and ‘Barbie’ mood boards. According to Pinterest data, these searches saw an increase of 980% at the time of the campaign.

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7. Business Model Of Pinterest: Value Proposition

Pinterest’s value proposition lies in its ability to provide a visual discovery and planning platform that inspires users and helps them achieve their creative goals. For businesses, Pinterest offers a highly engaged audience and powerful advertising tools to drive brand awareness and sales. The platform’s focus on high-quality visual content and user experience sets it apart from other social media and search platforms.

The value proposition of any business defines the usage of the product or service offered by them, and it is the main driver behind the success of any business. To learn more about the business model of Pinterest, let us learn by exploring the value propositions of the platform to its users and businesses operating on it.

1. Value Proposition for Pinners (Users)

It provides users with the facility to discover different things through visuals to gain a better idea of the things they find. It provides its users with the most relevant content based on different factors like their likings, tastes, ideas, etc. by using specialised algorithms.

A user can choose what it would like to see by choosing the specific category that they are interested in looking for at that moment or finding ideas for a particular project.

2. Value Proposition for Businesses

Pinterest tries to reach its ads to users who are in the right mindset and believe in it. Thus, this increases the effectiveness of ads on Pinterest.

Most Pinterest users are in search of inspiration and ideas for planning new things and showing ads during this planning process is the best time to help its users by providing their services from related businesses. This makes it a better place for businesses.

8. Business Model Of Pinterest: Operational Model

Pinterest operates on a global scale, with offices and data centres worldwide to support its user base. Its operational model includes advanced technology infrastructure, data analytics, and a robust content moderation system. Pinterest’s commitment to innovation and continuous improvement ensures the platform remains user-friendly and secure, providing a positive experience for both users and advertisers.

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9. Business Model of Pinterest: Strategic Alliances & Partnerships

Pinterest has formed strategic alliances with various companies to enhance its offerings and expand its reach. Key partnerships include collaborations with e-commerce platforms like Shopify, enabling seamless integration for online stores, and media companies for content partnerships. These alliances help Pinterest enhance its features, improve user experience, and attract more advertisers.

Key Partners of Pinterest

• Content creators

These are those people who have their small businesses and create content to showcase their products. They try to get organic traffic for their business.

• Businesses/Advertisers

These businesses and brands create content as well but they are more into advertising their products to the users than indulging in organic traffic. Some brands are into Pinterest so much that they create video and image content specifically targeted at Pinterest users.

• Search Engines and Social Media Platforms

Google and Facebook, also known as Meta, are partners as well as rivals. Ex. Google shows the images from Pinterest on its image search result pages. Whereas Pinterest allows its users to share its pins on Facebook.

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10. Business Model of Pinterest: Technological Innovations

Pinterest invests heavily in technological innovations to enhance its platform. This includes advancements in AI and machine learning for personalised recommendations, visual search capabilities through Pinterest Lens, and improved ad targeting. The platform also focuses on developing new features like augmented reality (AR) for virtual try-ons and expanding its shopping capabilities to provide a seamless user experience.

Corporate Social Responsibility (CSR)

Pinterest’s CSR initiatives focus on promoting mental health, diversity, and sustainability. The company has launched several programs to support mental well-being, including mental health resources and campaigns to promote positive online behaviour. Pinterest is also committed to increasing diversity within its workforce and promoting inclusive content on its platform. Additionally, Pinterest aims to reduce its environmental impact through sustainable business practices.

Top Competitors

1. Google

At first, Google may not seem like a competitor of Pinterest but when it comes to visual search and discovery, Google actively competes with Pinterest. It is still the first choice of users when they are searching for inspiration or visual content. Pinterest went so far as to identify Google as a direct competitor while filing to make itself public. Check out our detailed case study on the business model of Google to learn how it has become one of the biggest tech giants and competes with its competitors.

2. Instagram

With features like Stories, Reels, and Explore, Instagram competes directly with Pinterest. While Pinterest prioritizes search and curation, Instagram directs its efforts toward enhancing content discoverability. With the launch of its shopping feature back in 2020, Instagram has now become one of the biggest competitors of Pinterest.

3. YouTube

YouTube is not a direct competitor of Pinterest but with its vast library of instructional and how-to videos, it fulfils the same purpose as Pinterest boards, especially for DIY projects and recipes. Its long-form format content allows users to dive deeper and get more detailed explanations, making it a valuable resource for users seeking in-depth information. To learn how YouTube stays at the top of its game, check out our comprehensive blog on the business model of YouTube.

4. ETSY

Being a marketplace for unique, handmade, and vintage goods, Etsy is another competitor of Pinterest when it comes to shopping and finding unique products. While Pinterest focuses on inspiration and discovery, Etsy allows users to directly purchase items they find on the platform. This gives ETSY a major advantage over Pinterest when it comes to the e-commerce side of the products.

5. Houzz

Houzz is a platform where users can discover and take inspiration for home improvement projects. It competes directly with Pinterest in the field of interior design and home decor. It is a great resource for homeowners when it comes to finding design ideas and connecting with professionals in the home improvement industry.

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Conclusion

The business model of Pinterest revolves around providing a visual discovery platform that inspires users and offers effective advertising solutions for businesses. Through technological innovations, strategic partnerships, and a strong focus on user experience, Pinterest continues to grow and maintain its position in the competitive social media and search markets. This business model of Pinterest case study highlights its unique value proposition, revenue streams, and market strategies.

On the study of the business model of Pinterest, we have seen that Pinterest is still growing and still has the potential to grow a lot in the market. It earns its revenue from showing ads to its users and chargest on different bases like CPC, CPM, CPA, etc.

It provides its users with different content on their preference, taste, ideas, etc. It also provide its advertisers with quality leads by showing their ads to people who are really interested and are in the right mindset

Pinterest has different partners like content creators, business advertisers, and search engines, and social media apps. They create content and use each other’s platforms to share the content.

Its key customers are Pinners and advertisers who use the platform and create content to post on their profiles and generate engagement.

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Hope you liked this case study and found it informative and insightful!

Extra Details

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