In an effort to increase ad revenue, Pinterest just announced a new partnership with Google for advertising. Google is the second third-party advertising partner on the social network, following Amazon, which last year inked a multiyear agreement with Pinterest.
During the Q4 2023 earnings call, the firm emphasized the Google partnership, even though its performance fell short of analyst forecasts. While monthly active users increased to 498 million with an 11% year-over-year gain, Pinterest’s revenue for the quarter was $981 million, up 12% from the previous year.
Due to revenue that fell short of expectations, Pinterest’s stock dropped by over 28%. However, it rose after CEO Bill Ready revealed the Google acquisition. Positive outcomes have been observed by the company since it began implementing the new ad integration a few weeks ago, according to him.
“This partnership will focus on monetizing several of our currently unmonetized international markets by enabling ads to be served on Pinterest via Google’s Ad Manager. We went live a couple of weeks ago, and this is starting to ramp up. Third-party ad demand is scaling as we anticipated,” he said.
According to Ready, Pinterest’s non-US user base comprises 80% of its total users, while their share of revenue is only 20%. He said that in international areas, the Google relationship will contribute to an increase in the average revenue per user.
Expanding Audiences
The CEO of Pinterest discussed using AI and novel formats to increase user base and engagement. According to him, the collage feature—which lets users combine objects and stickers to make new images—was made available to all iOS users worldwide. The company claimed that shoppable product pins are present in 75% of institutions, but it provided no information regarding conversion rates.
Additionally, the business introduced an auto-organizing function for customers last year that encourages them to build boards by identifying comparable pins. The social network saw a 30% rise in the number of boards made as a result of the function.
Ready added that customers may refine their search queries and go closer to “the point of action or purchase” with the aid of the company’s generative AI-based search recommendations.
In an effort to provide more inclusive search results, Pinterest began testing a new tool in November of last year that allows users to specify body type ranges.