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Here’s the Completely Decoded Business Model Of Pinterest And How Its Successful

by | Case Studies | 0 comments

As one of the largest social media platforms in the world, the Business Model of Pinterest is something you ought to know!

Pinterest is one of the most successful social media platforms in the world, letting its users explore their interests in a fun and interactive manner and enjoy content curated especially for them.

The 3rd largest social networking site in the U.S, it has over 367 million active users all over the world as of 2020 and a customer base of 460 million people worldwide. It earned a revenue of $1,693 million in the year 2020 with over 2,200 employees working under it.

In order to decode the social media giant’s success, we have elaborated in full detail the business model of Pinterest – which includes its revenue model, value proposition, key partners and customers.

But before we start with learning more about the business model of Pinterest, let us start by glancing at more information on the company.

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About Pinterest

Pinterest is a social media site for sharing and categorizing images from the Internet. The site is described as a visual bookmarking site in its content. Pinterest is short for Pin and Interest. They have many categories like food, fitness, architecture, etc.

It was founded in the year 2009 by Ben Silbermann, Paul Sciarra, and Evan Sharp – who are all ex-Google and ex-Facebook techies. It has its headquarters located in San Frascisco, California U.S.

Many people find inspiration for their lives and almost anything you can think of, such as new daily activities to try, dinner recipes, fashion styles to emulate, house remodelling ideas or preparing for a marathon, etc. 

Pinterest was very inventive in the way they made a hobby and interest exploration app into a platform that also acts as a mediator between seller and consumer. The platform is fast becoming a powerful base for marketers around the world to utilize and the company has been busy in order to keep on adapting the business model of Pinterest to make sure that their users are engaged. Pinterest also has effectively created a monetization model for its users and content contributors to keep growing the community and foster it. 

Let us now start learning in detail the business model of Pinterest.

Business Model of Pinterest

The business model is used to determine a company’s plan for generating revenue. It determines the products or services the business plans to sell, its identified target market, and any anticipated expenses.

Pinterest’s model is to help people find good recipes, images, and items and find more random pictures on the internet in one place. Suppose someone is interested in making money on Pinterest on a long-term strategy. They can start writing Blogs, work as a virtual assistant, and also be an affiliate marketer on Pinterest and many more

Let us now start detailing the business model of Pinterest by learning in detail about its revenue model.

Business Model of Pinterest – Revenue Model

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

  1. Cost per thousand impressions (CPM)
  2. Cost per Click (CPC)
  3. Cost per action (CPA)
  4. For videos: Cost per View (CPV) or CPM

Let us now see the value proposition of Pinterest.

Business Model of Pinterest – Value Proposition

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. In order 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.

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 on the basis of different factors like their likings, taste, ideas, etc. by using specialized algorithms.

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

Value Proposition for Businesses

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

Most of the 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.

Let us now see the key partners of Pinterest.

Business Model of Pinterest – Key Partners

Pinterest is a platform that mediates between people who wish to learn more about hobbies or interests, content creators and businesses who wish to provide products that align with each users interests. Let us learn the crux of the business model of Pinterest by learning how these key partners interact with each other.

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 soo much that they create video and image content specifically targeted at Pinterest users.

Search Engines and Social Media Platforms-

Google and Facebook 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.

Let us now learn more about the key customers of Pinterest.

Business Model of Pinterest – Key Customers

The business model of Pinterest has two key players:

  1. Pinners 
  2. 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 customized and organized according to the user interests within the pinboards.

Pinners get this service for free where they don’t need to pay money. The business model is completely built on top of its Pinners, where they are the core for the business. 

More precisely, Pinterest claims to work on providing the “right” content for their pinners, using the following principles at its core:

  1. Transparency
  2. Enforcement 
  3. Accountability 

The business model of Pinterest is diverse and built on the creation of a common platform that is self-sustaining as it is solely based on UGC and forces its business partners to provide purely value additive content-based products.

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Conclusion

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. They also provide their 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.

Wasn’t it interesting to know the business model of Pinterest? Learn how to grow your business using digital marketing, by attending the Free Digital Marketing Masterclass by the Founder and CEO of IIDE, Karan Shah, to understand what digital marketing is all about.

If you are interested in digital marketing and wish to be in touch with our academic counsellors then connect with them at admissions@iide.co for a free counselling session.

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

Do share your thoughts about the case study in the comments below and keep the discussion rolling.

Lead Trainer & Head of Learning & Development at IIDE

Leads the Learning & Development segment at IIDE. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. He has been a guest speaker at prominent colleges in India including IIMs......[Read full bio]

Aditya Shastri

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