How does Pinterest makes money - Business & Revenue Model of Pinterest

Pratyusha Srivastava Pratyusha Srivastava
Jul 13, 2021 5 min read
How does Pinterest makes money - Business & Revenue Model of Pinterest

The social media sphere is quite growing with multiple social media platforms and their popularity. Among this sphere, lately, a San Francisco based Pinterest which is a CA tech company famous for its huge collection of photos for all occasions and styles.

Pinterest is basically a pinboard-style photo-sharing platform. You can create your collection of photos and also, manage theme-based photos of events, hobbies and many others.

Pinterest was founded in 2008 but went public through an initial public offering held in 2019. Through this, the stock trades on New York City exchange under the PINS symbol.

Today, there are around 100 million active users of Pinterest with a reported value worth $11 billion. But, with the growing speed, the question arises how does Pinterest make money? This has been a question since the beginning of Pinterest. The Business model of Pinterest has been designed very strategically in order to capitalise on the networking effect.

Pinterest launched its revenue model titled 'the promoted pins' in 2013 which is available in the beta stage. The revenue model of Pinterest is based on advertisement and has been growing more vigorously. In this article, we have discussed the business model and Revenue model of Pinterest. Stay tuned!

Pinterest Business Model
How does Pinterest make money?
Revenue Monetisation Models of Pinterest
Objectives of Monetisation Models
How Pinterest is proven a better Social Network for Businesses?
FAQ

Pinterest Business Model

Initially, Pinterest was based on a web social catalogue model. However, later the company recognized the advantages that come with a social media networking site which includes pinboards and pins. This would allow the user to choose their pin according to their interests.

Therefore, now Pinterest holds all the possible options that come with a social media platform such as catalogue, E-Commerce, social networking features, and content facets.

Similar to Facebook and Instagram revenue models, Pinterest has also developed its revenue model based on the advertisement, which brings benefits for the user while visiting the website. Pinterest holds all the capability and potential to gain its utmost success. Although it's still awaiting utilising its total sources. But who knows, Pinterest could become the most successful social media site.

As we discussed the strategic business model of Pinterest, let's move towards how the company makes money.


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How does Pinterest make money?

When Pinterest was launched, it didn't have any source of revenue. Later in 2013, it launched its new advanced feature - the promoted pins. This came out to be a huge success and a solid source of revenue.

The promoted pins are the advertisements shaped in the form of pins on the search results, dashboard and other areas of Pinterest which are endorsed by some specified sponsor and can redirect to the sponsor's website.

Promoted Pins
Promoted Pins

The promoted pins feature is similar to the promoted content features available on other social media platforms. These are user-targeted. Hence, it benefits the user as well as the advertiser.

The reach by the users depends on the bids made by the sponsor and the bids depends on the targeted user's interests and other demographic facts.

Revenue Monetisation Models of Pinterest

Pinterest uses the widely preferred digital monetization models for better revenue return. These are:

  • Cost per Click (CPC)
  • Cost per thousand impressions (CPM)
  • Cost per View (CPV)
  • Cost per action (CPA)

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Objectives of Monetisation Models

The Monetisation Models are used according to the favourable campaigns. There are various Monetisation Models and each of them is applied to different advertising campaigns based on their objectives. Such as:

  • Video View
  • Conversion
  • Brand Awareness
  • Shopping Catalogue
  • App Install
  • Traffic

According to the estimated data of 2019, two-third of the total revenue comes from performance advertisements. Each ad holds several prospects, some aimed for conversion of sales, signing up, app installation, trial or other discrete actions. Meanwhile, one-third of revenue is obtained from brand ads.

How Pinterest is proven a better Social Network for Businesses?

Pinterest holds a huge collection of theme-based catalogues that can be saved and used by users according to their preferences. This has created an opening for advertisers and marketers to promote their business.

The other social media networks connect people on a global level but when it comes to Pinterest, it connects people to their interest-based content. That's why Pinterest has a better click-through rate on various conversions and advertisements.

Around the globe, tons of people are active users of Pinterest in the last 6 months, among which 96% use it for research and gain knowledge. 93% report that they prefer Pinterest for planning their finances and 87% use it as an engagement that helps them to decide what to purchase.

Today, Pinterest is proven to be the fastest-growing platform through its complete member expansion. Social media such as Facebook and WhatsApp gathers only a single-digit growth rate, however, Pinterest has received more than 50% of growth rate.

Conclusion

Pinterest is a unique way to share photos. Photos sharing through social media has been a meteoric rise for the past decade. Pinterest has been proven a very exciting social media platform that monetizes its website by selling digital advertisements in a distinct targeted manner.

Unlike Twitter and Facebook, it offers the user the opportunity and platform to plan their future projects. The user can browse abundances of fascinating and unique content based on new information. It is more of a search engine.

The San Francisco based company allows users to share their photos and videos. Pinterest has obtained a very unique and strategic business model and in upcoming years, it is estimated to grow more heights of success.

FAQ

What is the annual revenue of Pinterest?

The annual revenue of Pinterest was $1.6 billion in 2020.

Who is the CEO of Pinterest?

Ben Silbermann is the CEO of Pinterest who has a net worth of $1.5 billion.

How does Pinterest make money?

Pinterest's primary source of revenue is promoted pins. These special pins are effectively advertisements, paid for by identified sponsors.

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