Pinterest is an image search platform, which functions somewhat like an online mood board. Users ‘pin’ images they like to ‘boards’. Images are uploaded by users, and can then be pinned by other users. Users are also served an algorithmic feed based on selected interests. In 2018, an additional more social feed was added, based on followed accounts, presented in chronological order. Both word and image-based Pinterest searches can be conducted. The algorithm is driven by visual and textual data.
Despite this, Pinterest CEO Ben Silbermann has been keen in the past to insist that Pinterest is not a social site as such, but “a catalogue of ideas”, intended to spur users to take creative decisions in the real world. Suffice to say, Silbermann is in a minority, with Pinterest very much treated as and considered a social media platform…
Pinterest was launched by Silbermann and cofounders Paul Sciarra and Evan Sharp in 2010. Silbermann had previously worked in the online advertising group at Google. He and Sciarra had previously unsuccessfully launched an app called Tote, before teaming up with Sharp. Silbermann has reflected that the inspiration for the website came from his childhood love of collecting.
The site quickly caught on, becoming one of the 10-biggest social sites in 2011 (despite any objections to this categorisation), breaking the record for time taken to reach 10 million users. The launch of an iPhone app in March 2011 contributed significantly to rapid Pinterest user growth.
Accordingly, it was listed as of Time’s 50 best websites of the year. By March 2012 it ranked behind only Facebook and Twitter in terms of US users (in these pre-Snapchat and Instagram days).
This expansion of the Pinterest userbase came despite the fact that the site operated an invite-only registration policy. This was dropped in August 2012. Around the same time an Android Pinterest app was launched, fostering further growth. User numbers grew from 49 million in February 2013 to 70 million in July of the same year. This would more than double to 150 million by October 2016, with the latest figures (March 2018) showing 291 million active Pinterest users.
Pinterest marketing has become a key channel for businesses, with Pinterest for business accounts offered to companies who want to utilise the platform for these purposes. The first Pinterest revenue came in 2013, when it began offering advertisers these businesses to run ‘promoted pins’. While Pinterest may not offer the biggest audience, it can offer a high conversion rate, with Pinterest users seemingly more influenced to make purchases based on what they’ve seen on the platform than is the case on other platforms. Storefront options are also available to retailers, allowing them to sell directly.
In late March 2019, papers were filed for a Pinterest IPO, following on from the filing of confidential papers the previous month. It was initially thought that a valuation of $12 billion was being sought, in line with a 2017 investment round; and with the market cap of image-based rival Snapchat around this time. Shortly before the IPO it was announced, however, it was announced that the valuation being sought would around $10.6-$11.3 billion ($15-17 per share).
Pinterest went public on April 18 2019 as planned, trading at $19 per share (total value: $12.7 billion)
With many other tech unicorns set to go public over the course of 2019, the performance of the Pinterest IPO will certainly be considered as something of a barometer of the current marketplace – hopefully one that proves more inspiring than the first month of Lyft trading publicly.
Want to know more about the makeup of Pinterest’s userbase, its financial performance, and engagement levels? Read on to find out.
Table of Contents
Key Pinterest Statistics
- 291 million monthly active Pinterest users
- 57% of Pinterest MAU are WAU
- Around 70% of Pinterest users are international (non-US)
- 41% of American women are Pinterest users
- 48% of Pinterest users are parents
- Pinterest users have cumulatively placed 175 billion pins
- 80% of Pinterest usage occurs on mobile apps
- 600 million visual searches occur monthly on Pinterest
- Millennial Pinterest users spend 17% more than non-users of the same age
- Pinterest users in general spend 29% while shopping than non-users
- 98% of Pinterest users have tried something new they discovered on Pinterest
- 61% of Pinterest users have purchased something after seeing a promoted pin
- 85% of female Pinterest users use the app to plan life events
- Pinterest users are 39% more likely to be active retail shoppers than non-users
- 48% of US Pinterest users specifically come on Pinterest to shop
- 72% of Pinterest users are inspired to shop when using the platform even if they aren’t looking for anything in particular
- 84% use the platform when they are undecided on which products to buy
- 41% of users continue to use Pinterest when shopping in-store
- There has been a 115% increase in product-related pins in recent years
- 78% of Pinterest users say it’s useful to see brand content on the platform
- Pinterest marketers stand to make $2 for every $1 they spend on the platform
- Pinterest raised over $750 million in ad revenue over 2018
- 95% of Pinterest revenue is domestic
- Pinterest was valued at $12.3 billion in a 2017 funding round
- After suggesting it would begin trading at $15-17 per share (giving Pinterest a value of $10.6-$11.3 billion), Pinterest began trading on the NYSE at $19/share, giving it a valuation of $12.7 billion
Pinterest User Statistics
Pinterest reported 250 million active users in September 2018. Figures from the last quarter of 2018 indicate that Pinterest user numbers climbed to 265 million, while a report from March 31 2019 suggests this has jumped as high as 291 million.
This is well up on the 150 million Pinterest users counted in October 2016, which itself represented an increase from 100 million in September 2015. The date of the former, however, was something of a disappointment for Pinterest, which was targeting 151 million users by the end of 2015.
This ambitious target was even used by Andreessen Horowitz in an attempt to attract investors to a special Pinterest investment fund. These estimates also anticipated 218 million users by the end of 2016.
Pinterest MAU by quarter
Pinterest does not reveal any specific DAU figures, though we are told that as of December 31st 2018, 57% of monthly-active users were weekly active users.
Total US Pinterest user numbers climbed to 82 million in the fourth quarter of 2018. This represents a slowdown in US growth for Pinterest, even as international user numbers continue to climb. Pinterest has deliberately been pursuing international growth by localising content into different languages.
These figures had previously risen from 72.3 million to 77.4 million between 2017 and 2018, according to eMarketer statistics. This represents an increase of 7%, which supplements a 13.8% increase between 2016 and 2017.
This took penetration from 22.1% to 23.5% (total US population).
Pinterest US market penetration
eMarketer predict that US Pinterest user numbers will climb to 84 million by 2020. US growth levels have slowed somewhat, however, despite international growth.
Pinterest user demographics
The majority of the Pinterest user base comes from outside the US, according to official stats. This figure climbs to 80% if only new signups are counted – suggesting that even if US growth is slowing, there’s still plenty of legs left in terms of the growth of international Pinterest users. We did see a dip in international and domestic users in Q2 2018, however, as compared to the previous month. We might note that this is somewhat complicated by a huge rise in the previous quarter, which obviously was not sustainable…
As of the end of 2018, around 70% of MAU were international. Pinterest expect international user growth to continue to outstrip domestic user growth for the foreseeable future.
Domestic vs. International Pinterest users
Source: Pinterest S-1
The US is still comfortably in the lead (compared to other individual countries); as of January 2019, it was the source of 40% of Pinterest desktop traffic. Brazil in second place contributes a mere 8%, which is double that of third-placed India at 4%.
Turkey and Poland interestingly complete the top-five; though we must factor in that this analysis looks at Pinterest desktop and not mobile traffic, which accounts for the vast majority of Pinterest app traffic.
International sources of Pinterest desktop traffic
The IPO filing of late March 2019 reported that ARPU for US Pinterest users was 36 times greater than international ARPU despite US users being in the minority. This amounts to around 95% of Pinterest revenue.
Focusing again on the US market, Pew Research Center data shows that 34% of both the 18-29 and the 30-49 age demographics are Pinterest users. If we break the first down into two halves, we find deeper penetration in the 25-29 bracket as compared to their younger peers.
Over half of Millennials, reports the Pinterest IPO filing, are Pinterest users – setting the estimate a little higher. The official measure of what constitutes a Millennial, it should be noted, would spread across the three aforementioned brackets. The Millennials who use Pinterest are a useful market to target, reportedly spending more than 17% more than those who don’t use it (something they have in common with their older peers, then).
This high preponderance of usage in the older age demographic will certainly come as pleasant reading to marketers hoping to reach this more affluent base of consumers. Indeed, with penetration of 26% and 16% respectively, they would also be reaching a healthy proportion of the 50-64 and 65+ age demographics.
Pinterest US market penetration by age
A study conducted by We are Flint shows that the Pinterest app is consistently in the top-six most-popular across age groups. It gradually climbs up as we move up the age groups, ranking highest among 45-54 and 55-64-year-olds, for whom it ranks fourth, behind only Facebook, YouTube and Facebook Messenger (though it falls back into fifth for the over-75s).
While these groups may not the be the biggest users of social media in general, for those who aim to reach these older users, it can clearly serve as an important channel.
Top US social networks by age group
Source: We are Flint
Over half of US women aged 18-54 had signed up to Pinterest, according to a document leaked in 2015.
Pew Research Center data published in March 2018 reports that 41% of American women use the Pinterest app. Its reach, however, is not limited to this 41%. Indeed, Comscore find that Pinterest reaches an amazing 83% of US women aged 25-54. Hootsuite speculates that the discrepancy here comes from the concentration of Pinterest-hosted results in Google image searches. This creates further impetus for brands to embrace Pinterest marketing, given that they can reach non-users on top of those actively using the platform (see more on Pinterest marketing in the ‘Pinterest for business’ and the ‘Shopping on Pinterest’ sections below).
In its IPO filing, Pinterest referenced an independent Comscore study which found that 43% of American internet users were Pinterest users. One of the most pronounced demographics is mothers, of whom eight out of 10 were reportedly Pinterest users.
It’s not just women who use the platform, however – 38% of American fathers apparently use the platform (48% of Pinterest app users are parents in all). Male users account for 40% of sign-ups, say Pinterest. eMarketer predicts a 7:3 ratio of women to men on Pinterest by 2022.
The aforementioned Pew Research Center Pinterest demographic data confirms higher levels of usage among higher income brackets. The trend here is neat; the greater the income, the more likely a user is to use Pinterest.
This is also the case with level of education; those who have completed a full-college degree are twice as likely to be Pinterest users than those who stopped at high-school or before. The Pinterest app is most popular among white Americans, though there are solid percentage of both black and Hispanic users.
Interestingly, there doesn’t seem to be a great deal in it when it comes to where respondents live. Suburbanites are most likely to be Pinterest users – the Pinterest demographic who are perhaps most likely to own their own homes and possess the means to decorate it. That said, those who live in urban centres (holiday makers and frequenters of restaurants) or rurally (also homeowners and perhaps also business owners) are very nearly as likely to use the platform.
Pinterest US demographics: Pew Research Center
Data source: Pew Research Center
Demographic data from We are Flint reveals similar findings. We see usage among female survey respondents at around two-thirds, while a fairly solid 40% male users join them on the platform. Again, there’s not a great deal in it when it comes to urban/rural users.
Nor is there for income brackets, with every range logging over 50% penetration, bar the under-$30,000 (and even that comes fairly close). Usage is a little higher in higher income brackets, with the peak occurring in the $70-80,000 bracket. This looks at household rather than individual income.
When it comes to age groups, the highest penetration is among younger groups, with 25-34 year olds the most likely to be Pinterest users (69%), followed by 18-24 and 35-44 year-olds, who both register 62% penetration. We don’t drop below 50% until we reach the 55-64 bracket, and even 25% of over-75s can be found using the platform.
Pinterest US demographics: We are Flint
Source: We are Flint
Pinterest Usage Statistics
Pinterest users cumulatively placed 175 billon pins, according to official stats released in September 2018. This is a huge 75% increase on stats reported in early 2017. These pins have been made to four billion boards.
The average Pinterest user actively types roughly eight searches per month, though spends more time scrolling though related pins after clicking on an initial pin (maybe in their feed). The average Pinterest session is around 14 minutes in length.
According to We are Flint stats, 17% of US internet users use the Pinterest app on a daily basis. A further 17% are weekly users.
These stats also look at UK users, who are decidedly less enthusiastic Pinterest users than their US counterparts. That said, 8% are daily users, with a further 13% logging in at least weekly.
Frequency of Pinterest usage
Source: We are Flint
80% of Pinterest usage occurs on mobile devices. In Pinterest’s IPO filing it notes that international growth may be limited by either low smartphone penetration, or a poorer standard of mobile data availability. Both of these factors are considered to be key in terms of facilitating Pinterest usage.
Pinterest reported a 115% increase in product-related pins, a 38% increase in style-idea pins, 50% in art, and 35% in DIY projects between early 2017 and September 2018.
A Nielson study shows that 98% of Pinterest users try new things that that they have seen on Pinterest – significantly higher than the 71% social media average.
Interestingly, 91% of Pinterest users say the site is filled with positivity; certainly registering more highly than other social media platforms (as anyone who has logged into one lately will most certainly know). Indeed, the only other app that seems to engender this level of making-the-world-a-better-place feeling anywhere in the world would be China’s mega-app WeChat.
In terms of content categories, a 2017 survey from Statista found that the most popular categories among US users were art, art supplies & hobbies, pinned by 48% of users, followed by (the rather diverse category of) flowers, food, drinks & gifts, and home, garden & pool/spa.
Most popular categories on Pinterest
When do people use Pinterest?
85% of US women who use Pinterest reportedly use the Pinterest app to get ideas for ‘life events’ according to data published by Pinterest. This compares to 44% who use Instagram to do so, or 53% who use Facebook.
Life events might include decorating a house (43% of users use Pinterest for this) or going on holiday (50%), lower down the scale, planning meals (67%) or gym routines.
Pinterest releases an annual ‘Possibilities Planner’, which helps marketers choose when to run and to what to attach campaigns. Pinterest users, notes this guide, tend to look for ideas relatively early – as far as two or three months in advance. Christmas pins start appearing as early as August it notes.
The month-by-month guide published by Pinterest gives an indication of when marketers should become alive to the various events of the year – showing this early planning in effect.
For example, Pinterest users tend to start looking for ideas for ‘Veganuary’ at some point in December. School holiday planning seems to begin as early as April and Mothers’ Day in January. There are no rash resolutions made in the post-Christmas hangover period, poorly-planned holidays, or last-minute dashes to card shops for Pinterest users.
As we can see, annual/seasonal events go alongside one-off events (Wonder Woman) and other phenomena we might not expect to be so predictable (new haircuts).
Pinterest Possibilities Planner 2018-19
Why do people use Pinterest?
Stats published on Statista in 2016 show the reasons for which users log into Pinterest. As we might expect, simply ‘viewing photos’ – the raison d’être of Pinterest in its most simplified form – comes out on top, at 60%. In a rather close second, however, we see shopping for products, highlighting the potential power of the Pinterest app as a platform for brands.
Commanding lower percentages, though still notable, we see other social media functions, such as exchanging messages and even checking the news.
For what do US users use Pinterest?
Pinterest app users are 39% more likely to be active retail shoppers (as compared to non-Pinterest users), according to Oracle Data Cloud.
Pinterest trends reveal the sort of events around which users are seeking ideas – and which events they are celebrating in general.
For instance, godparent proposals are on the up, with searches up 152% (for something to class a trend, it has to have been on the up for at least six months, by Pinterest’s reckoning; reported Pinterest trends come from Pinterest’s 2019 report). In a blow for those who run wedding venues, ‘backyard wedding’ searches were up by 441%. It seems also that many are looking to get more in touch with the rhythms of nature, with ‘moon gathering’ searches increasing by 54%.
We might also look to these Pinterest trends to get ideas of how they intend to mark these occasions. We can see Pinterest trends for flower garlands (up 1154%), neon wedding signs (281%), and smoke bomb photography (436%). For anyone who has a stake in the events industries, these Pinterest trends could be key in understanding where there is money to be made in the near future. And, of course, for those planning such events, there is plentiful inspiration to be had.
There’s more detail on Pinterest behaviour in the ‘Shopping on Pinterest’ section below, and more on trends in the ‘Pinterest Trends’ section.
Pinterest reports that more than twice as many travellers will use Pinterest search as will use top online travel agency sites when looking for holiday ideas. Reportedly over 2018, travel Pinterest trends (see above for the definition of a trend) included ‘abandoned castles’ (searches up 142%), ‘less travelled islands’ (up 179%), and ‘small town travel’ (up 276%).
The ‘Self care’ trend (a 140% increase), no doubt familiar to anyone who has been on any image-based site in recent years is big on Pinterest also. Pinterest search terms which have seen a significant increase include ‘elderberry recipes’ (+685%), ‘goat milk soap’ (+231%), and ‘sleep optimization’ (+116%).
Pinterest has always been associated with gardeners and home decorators. 83% of Pinners use Pinterest to find ideas for a DIY project, and 60% for a bigger project. Hobbyists of all stripes can be found on the platform, however, with several Pinterest search terms on the up. These include ‘ceramic pottery’ (+475%), boat building (+169%), and urban decay photography (+44%).
On the subject of home décor, ‘bold print wallpaper’ Pinterest searches have increased by 401%, cactus arrangements by 235%, and natural swimming pools by 262%.
Food photography is another inescapable facet of modern life; here we see ‘ginger water’ (+353%), ’oatmilk’ (+186%), and oxtail (+209%) among the search terms on the up.
Showing that the platform is used by men as well as women, we see a range of men’s style terms on the increase. Pinterest searches for ‘French crop haircuts’ are on the up, increasing by 84% (shaved on the back and sides, longer on top, in case you were wondering), for example. We also see a rise in Pinterest searches for ‘plaid pants’, which are up 267%; not enjoying this level of traction since the heyday of the Bay City Rollers, once and for all proving the cyclical nature of fashion. Cropped trousers are also popular (searches up by 671%), which perhaps is connected with the 266% rise in ‘quarter socks’-related searches.
Pinterest search terms for women’s fashion which have seen significant increases in volume include ‘bamboo bags’ (+2215%), ‘statement sneakers’ (+2211%), and ‘biker shorts’ (+1323%). We also see increases in beauty-related searches: ‘lilac hair’ (+1077%), ‘powder dip nails’ (+442%), and ‘standout lip color’ (+467%). 70% Pinterest app users who engage with beauty content use it for everyday looks, while 60% use it for a new look for a special occasion.
Finally, in relation to the high percentage of mothers and fathers alike that use the platform, we see Pinterest trends relating to parenthood also. Over 2019, we see the parents looking to celebrate the vital statistics of their progeny, with searches for ‘birth stats signs’ up 315%. Environmentally-conscious parents (and those looking to avoid the build-up of clutter associated with growing children) are increasingly searching for ‘toy share subscriptions’ (+313%). And, of course, this being Pinterest users, the children must have well-decorated nurseries. Specifically, it seems as if a natural look is in vogue, with ‘rustic nursery ideas’ up by 136% in terms of searches.
Pinterest search preferences
Pinterest’s incorporation of image search may give it an advantage with younger demographics. The below chart shows that over 60% of younger and older millennials alike are comfortable with visual search as part of their digital shopping experience.
This a greater percentage of those who elect shoppable content/click to purchase, AR, or live chat/messaging. As a side note, it seems younger millennials are far more comfortable with AR, while a greater proportion of older millennials are happy to use live chat.
Millennial search preferences
According to internal Pinterest data dating from February 2018, 600 million visual Pinterest searches are carried out on a monthly basis on Pinterest browser extension Lens and using the Pinterest visual search tool inside the app itself. This represented a 140% increase over the preceding year.
Visual search volume 2017 vs. 2018
Pinterest for Business
The 115% growth in product-related pins mentioned above will be of key interest to those who use or intend to use the Pinterest for business purposes – and to those with an interest in the company’s financial performance as we come up to the Pinterest IPO.
This is not just because it means eyeballs are drawn to products, but also because users are able to directly purchase items in this category – making it doubly valuable to retailers using Pinterest advertising.
Accordingly, brand and agency professionals have embraced Pinterest marketing. According to eMarketer, just a shade under a third of US marketers use the Pinterest app for marketing purposes.
What percentage of US marketers use Pinterest for professional purposes?
As well as standard promoted pins, brands looking to use Pinterest for business can also purchase promoted video pins and promoted carousels. Promoted app pins allow users to download brand apps without even leaving Pinterest.
Pinterest advertising options also include promoted video pins in full-screen (or at least full Pinterest grid-sized. This affords brands considerably more visual real estate than the small portion of the screen commanded by normally-sized pins.
Promoted pins are certainly effective for those using Pinterest for business. 61% of Pinterest users have purchased something after seeing a promoted pin in their feed.
It was announced in May 2018 that Pinterest advertising would soon be driven by visual search technology – furthering brands’ ability to catch users at key moments during the discovery process. The visual search technology takes into account factors such as colours, shapes, and textures.
These ads are served through the ‘Instant Ideas’ link, which allows users to jump to related content from any given pin.
As allude to above, Pinterest marketing has established itself as a strong tool for marketers and advertisers, by virtue of its capacity to engagement with users at various steps of the purchasing journey – be it idle browsing, a deliberate search for inspiration, or seeking to purchase a specific item, or any of the many intermittent stages in between.
According to Analytic Partner data published by Pinterest in 2017, advertisers stand to make $2 profit for every $1 they spend on Pinterest marketing; $60 more profit per $100 spent that other measured marketing channels on average. If we swap profit for gross retail return, this increases to $4.30. The study found that Pinterest outperformed other measured online and offline channels by an average of 45%.
The Analytic Partners study concluded that advertisers could increase Pinterest marketing spend to a total of 5% of their total marketing budget without any adverse effect on ROI.
How to improve brand performance on Pinterest
In its materials for business, Pinterest states that 50% of impressions occur in users’ home feeds – thus algorithmically targeted advertising is likely to help brands reach new but relevant markets.
Audience-targeted campaigns generate a 28% improvement in engagement, Pinterest stats report. Pinterest also find a 22% online sales lift in pins tied to seasonal or special moments (see above).
CTAs, as most marketers are probably aware, increase sales by 6%. Consistent aesthetics help too – if branding in pins match the page to which they point, then sales are improved by 13%. Pinterest shoppers also seem to value honesty around pricing – a 28% increase in online sales can be driven through the inclusion of price points.
Imagery showing people using a product unsurprisingly improved performance. In this instance, we’re told that pins meeting this criterion were 67% more likely to drive a lift in offline sales, while clear product placement was 20% more likely to drive an offline sales lift.
Shopping on Pinterest
A study from Cowen found that 48% of US Pinterest users use the platform specifically to shop. This compares to 14% for Facebook, 10% for Instagram, and 7% for Twitter.
According to stats published by Pinterest, a greater proportion of users (60%) use Pinterest to get ideas for purchases than any other media – including search engines (48%) or social media platforms (35%). A little bit further down the decision-making journey, 90% of users of the platform say it helps them decide what to purchase. These stats claim that 33% more referral traffic is driven by Pinterest than nearest rival (in this respect) Facebook. This is proportional by number of users, rather than being an overall figure.
Of great interest to brands looking to use Pinterest for business transactions, 72% of users are inspired to shop when using the app without looking for anything in particular; 70% discover new products through the platform, and 66% buy products after seeing pins from the brand. 97% of Pinterest searches are unbranded – giving brands a wonderful opportunity to capture new custom. The Pinterest IPO filing mentions the fact that a household that views an item on Pinterest is 39% more likely to buy it than it would be otherwise.
Pinterest also seemingly plays a part in in-store shopping, with 41% of users shopping in person continuing to use the Pinterest app while doing so. Indeed, it continues to play a part in the post-purchase experience, with 59% of users finding out more about their purchases through using Pinterest.
Notably, users are happy to be marketed to through Pinterest, with 78% saying it’s useful to see brand content on Pinterest.
How people shop on Pinterest
84% of Pinterest users use the platform when they are undecided about products to buy, making them fair game for brands. 77% have discovered new products while browsing Pinterest, making it ideal for brands seeking to permeate further into the consciousness of shoppers.
Moving away from Pinterest’s own data, Mary Meeker’s Internet Trends 2018 report for Kleiner Perkins confirms the clout of Pinterest in shopping terms. According to this data, 59% of millennials have discovered a product using Pinterest – putting it level with Instagram, and behind only Facebook. It outstrips Snapchat by some distance.
This is notable given that Instagram’s audience is four times the size of Pinterest’s.
Pinterest product discovery vs. other social media platforms
On top of the relative affluence of the average Pinterest app user (see above), we might also note that they are inclined to spend more of their money – spending 29% while shopping according to statistics published on Hootsuite.
Pinterest Revenue Statistics
Over the course of 2018, Pinterest generated $755.9 million in revenue – up 60% on 2017. This was nearly entirely from Pinterest’s advertising business.
Pinterest’s S-1 filing reveals that while no one client contributes more than 10% of Pinterest revenue, the business is somewhat reliant on a small number of clients to contribute a significant share of revenue. This is listed as a potential risk factor.
As mentioned above, domestic sales contribute considerably more Pinterest revenue than international, despite growth in the latter. This is a potential area for concern for Pinterest, perhaps pointing at a ceiling in revenue, or at least a slowdown in growth levels. Indeed, it is listed as another risk factor in the Pinterest IPO filing.
Allowing more direct commerce has been put forward as a suggested channel through which Pinterest revenue growth can be fostered. Pinterest has, however, chosen to double down on the image discovery that has traditionally been its MO rather than focus on storefront features.
Over the course of 2018, domestic takings accounted for 95% of total Pinterest revenue.
Pinterest domestic vs. international sales
Source: Financial Times
Pinterest revenue predictions for Q1 2019 stood at around $200 million. It should be noted that Pinterest’s seasonal business model will mean we can expect higher revenue figures later in the year. If the prediction was met it would represent an increase of over 50% year-on-year.
In contrast to some of Pinterest’s overambitious targets outlined below, Pinterest ad revenue exceeded eMarketer’s expectations in 2018 (perhaps more conservative as a consequence of said overambition). These predictions, published in October 2018 predict that Pinterest ad revenue will cross the $1 billion mark by 2020.
Given the outperformance of the 2018 figure of $550 million listed here and the since-announced IPO, perhaps it would not be too great a surprise if this threshold was crossed at an earlier stage than anticipated here. Indeed, these figures are based on a declining rate of increase in ad revenue – whereas in 2018 we, in fact, saw an increase.
Pinterest ad revenue
The same set of predictions also anticipates that average revenue per user will increase to just shy of $12/user by 2020, from $5.32 in 2017. This still, notes eMarketer, would leave it well shy of the $135/user commanded by Facebook in 2018, or the $58 from Instagram.
On the other hand, it’s analogous with Snapchat’s $7.81.
Predicted Pinterest ad revenue per user
eMarketer’s figures seem at variance with other sources, which seems to show a lower ARPU figure (it is unclear if different factors are being taken into consideration in the divergent estimations).
In Q4 of 2018, these sources state US revenue per user was around $3.16, compared to a mere $0.09 per international user For context, Facebook was registering $34 per US user, and $7.37 worldwide over 2018.
Pinterest reported global ARPU of $0.73 in its S-1 filing (which looks at Q1 2019). This is comfortably up on the $0.58 reported for the first quarter of 2018.
Pinterest’s IPO filing revealed a 47% increase US ARPU, and a 22% increase in international ARPU.
As with projected user numbers, Pinterest revenue targets have been missed – by some distance. Leaked 2015 documents indicate that Pinterest was targeting $663 million in revenue in 2016; well in excess of the $300 million eventually reported (though this was triple the 2015 figure).
2015’s $100 million also fell below the projected $169 million.
Over the course of 2018, Pinterest lost $63 million. It was, however, profitable in the last quarter of the year; though it should be noted that being a seasonal business, the holiday period toward the end of the year is the most lucrative. The $63 million figure also compares favourably with losses of nearly $140 million in 2017. We might also compare it positively with the $515 million lost by Snapchat in the year running up to its IPO.
Gross margins are on the up, reports The Motley Fool, increasing from 62% in 2017, to 68% in 2018; a robust 75% in the last quarter of 2018.
When it comes to profitability, Pinterest gets a boost from relatively low R&D and G&A expenses; around 30-50% and 16-26% of peer companies.
Pinterest cost of revenue reportedly stands at 32%, despite using Amazon Web Services to host the platform. This is relatively low compared to some competitors – for instance, the equivalent figure for Snapchat stands at around 67%. While Pinterest’s cost of revenue increased in absolute terms, it was down in percentage terms as compared to 2017, when it stood at 38% of revenue.
On the other hand, costs related to marketing have climbed, coming to $260 million in 2018 – an increase of 60%. In percentage terms, however, it has remained fixed at 34%.
Pinterest’s cash stockpile was listed at $630 million as of the beginning of the 2019.
Pinterest valuation and funding rounds
Pinterest was valued at $12.3 billion in June 2017, as it received investment of $150 million.
This represented a rather modest increase from a $11 billion Pinterest valuation reported in March 2016, which came on the back of a $367 million funding round.
In all, it has raised $1.5 billion in venture capital funding. Key Pinterest investors include Bessemer Venture Partners (13.1%), Andreessen Horowitz (9.6%), FirstMark Capital (9.8%), Fidelity, and SV Angel.
Pinterest CEO Ben Silbermann owns 11.4% of Pinterest stock, CPO Evan Sharp owns 2.1%, and co-founder Paul Sciarra (an advisor, though he no longer serves on Pinterest’s executive board) commands a 9.3% share.
Pinterest filed its S-1 on March 22 2019, with the goal of going public at some point in April of the same year. The valuation looked set to stand unchanged at around $12 billion.
Early indications indicated that Pinterest stock would be sold for $15-17 per share, however – which would see the valuation coming down to $10.6-$11.3 billion, which may have come as unpleasant news for some investors faced with write-downs. It should be noted that IPOs tend see increases in share price of around 15% on the first day of trading, we may well see this being the case with Pinterest stock. Nonetheless, in the run-up to the IPO, Pinterest was branded a ‘undercorn’.
On the other hand, however, some analysts have reportedly praised this approach, saying it reflects a prudent managing of expectations, and will perhaps result in less volatility. It’s notable that Pinterest revenue growth in the run-up to its IPO was at a significantly lower level than other tech companies before they went private.
Recode gives the examples of Facebook (88% growth in the year coming up to its 2011 IPO), Twitter (198% growth in 2012), and even Snapchat (597% growth over 2017). We might note two things, however: that Twitter and Snapchat were both smaller businesses at the time. We might also note both businesses have experienced declines in usership since (albeit in Twitter’s case many of the lost users were never real in the first place) if not in profitability.
Goldman Sachs and JPMorgan Chase will be the chief underwriters of the Pinterest IPO. Following the example set by other companies, Pinterest stock will be offered in different classes. The higher class of Pinterest stock will give holders 20 votes, as compared to the lower class, which will be one vote per share.
Pinterest began trading on the NYSE on April 18, with shares eventually priced at $19, giving it a total value of $12.7 billion. The Guardian report that trading began at $23.75, valuing Pinterest north of $15 billion. At the time of writing (late April 2019), shares were trading in excess of $33, with a market cap of $17.5 billion.
Pinterest share price, first weeks of trading
Source: Yahoo Finance
Pinterest may well be a key participant in the great tech unicorn IPO rush of 2019, but in many ways it stands aloof. It may not grab headlines and stir controversy like the Ubers and Airbnbs of this world, but that is just the way publicity-shy Pinterest CEO Ben Silbermann would want it, seemingly.
Pinterest’s growth has been slow and sustainable, first reaching peak saturation in the lucrative domestic market in the US before expanding outwards to an international market where it continues to grow. The slowly-slowly approach to monetising has seemingly paid off, with paid content not jarring or impeding the user experience.
Indeed, in what might be considered one of the great coups of the digital age, the paid content is the experience. As Fool.com contributor Brian Feroldi notes, one of the most enticing things for Pinterest investors is the fact that ads are the native content of Pinterest. The majority of saved pins, he notes, are published by brands – meaning essentially people are coming to Pinterest specifically to see brand content.
How many other content platforms can make a similar claim? It’s also worth noting the clean reputation we alluded to above. Pinterest does not mistreat gig economy workers, does not push up rent/oversaturate tourist destinations, and does not facilitate the dissemination of misleading content. Indeed, it even went so far as to restrict any vaccine-related content to prevent dangerous anti-science views being spread to its audience – which we must remember is densely populated with parents.
Keeping its reputation clean in order to be tarred with the same brush as other social media platforms will certainly be key in Pinterest’s prosperity as a public company. Indeed, one wonders whether Pinterest’s insistence that it is a visual search engine rather than a social platform might be a drive toward effecting such a disassociation (the Financial Times describe it as the world’s most wholesome social network).
It is also, however, a drive towards highlighting Pinterest’s most exciting technology: its visual search functionality. For users, this may prove instrumental in helping them find what they’re looking for, be it a specific item or inspiration, where visual elements are more relevant or logical than words in framing the search. And, of course, for brands, this will help them reach the right (new) audience, an undisputed boon for brand awareness.
The Pinterest IPO will be among the most compelling of those in 2019 – though as with anything in the history of the company, we may be waiting some years before we can truly assess the success of the venture. Indeed, the conservative initial estimates are the epitome of Pinterest’s patient approach. For advocates of this approach, a strong first couple of weeks will certainly feel like vindication – though perhaps it would be in the spirit of things to get carried away…
While it may be low on drama, there is certainly more than one way to do things. There are certainly signs that the Pinterest way is one of the better ones…