Pinterest Noticed Big Q3 Features as Advert Spend Shifted From Fb
During Pinterest’s third quarter earnings call today, the platform revealed a 58% jump in year-over-year revenue, following just 4% revenue growth in Q3. The platform touted its commitment to brand safety and pointed to recent investments in automation, international expansion and shopping as the drivers of its the impressive earnings.
Monthly average users on Pinterest reached 442 million this quarter—an increase of 37% year over year. The company also sounded a note of caution, warning that some churn is expected.
Ben Silbermann, Pinterest co-founder, president and CEO, cited a late surge tied to the release of iOS 14 for leading an estimated 4 million users to the platform thanks to users seeking iPhone background display customization ideas.
Similar to Snap, Pinterest benefited from its reputation as a relatively brand safe environment for advertisers. That safety stands in contrast to Facebook, which faced widespread ad boycotts this summer related to its failure to curb hate speech on the platform.
The platform also attributed its massive earnings to an overall recovery in advertiser demand generally. Many of the big brand advertisers that paused spending on the platform during Q2 returned to Pinterest in Q3, the company said.
Pinterest also credited its increased deployment of ad automation to support small- and medium-sized businesses. Those SMB advertisers have been looking for advertising avenues to capture continued international expansion and online shopping activity.
“Advertisers are telling us that ads are working” on the platform, said Pinterest CFO and head of business operations Todd Morgenfeld. “It’s in large part due to the investments we’ve made in technology that make it easier for advertisers to hit their goals on the platform.”
That tech investment has primarily focused on conversion measurement tools and automation, said Morgenfeld. Ultimately, Pinterest’s ongoing ad automation offerings are intended to simplify the ad sales process. The only requirement Pinterest wants to make of brands is for advertisers to bring their goals, budget and content to the platform—and let the Pinterest team do the rest. Although the system is not quite there yet, Pinterest claims it has made significant strides toward automating ad buys and making it easier for small- and medium- sized advertisers to work with the platform.
“What we’re hearing is that returns accountable performance formats that drive measurable conversions in online sales—particularly in the mid market segment—are a sweet spot for us,” said Morgenfeld. “We’ve been making those investments.”
Pinterest has also seen the benefits of shopping on the platform. The company’s product purchase tool allows users to go from shopping inspiration to research and on to sale completion. Pinterest executives say they are providing more opportunities for brands to incorporate ads organically into the platform. Case in point: the number of users engaging with shopping surfaces has grown a whopping 85% in the last six months, the company said.
Pinterest also continued to see the benefits of its international expansion. About 16% of its total revenue now comes from outside the United States, up from 10% in the third quarter.
Coming off of Q3, the platform pointed out two areas of uncertainty going into the final quarter of 2020.
First, the novel coronavirus pandemic continues to create a level of uncertainty regarding user behavior. While Pinterest has tracked a consistent uptick in user engagement during lockdown orders and a decrease when those orders lift, it’s impossible to predict when those lockdowns will be enacted or how long the pandemic will last.