Digital Advertising + Pinterest 1 Year Post IPO

The qualities and features that allow one social media platform to differentiate itself from another are the very same differences in UI & UX that determine the platform’s advertising potential.

Philosophically one may argue that viewing advertisements is a waste of time that rots your brain. When given the chance to avoid ads most people do. Remember the excitement around fast forwarding through ads with TiVo? While the public has a general disposition to avoid advertisements there are exceptions highlighted by the excitement surrounding Super Bowl commercials.

Digital advertisers are aiming to further blur the line between the content you’re seeing versus what you’re seeking. They can do this through creativity, leveraging user data, or through brute force. Moving forward it may become increasingly difficult to leverage user data as Google is set to phase out support for third party cookies in 2022. Relying on sheer creativity to capture a user’s attention isn’t a winning formula either. Digital advertisers are going to need to capture your attention through brute force.

What does having your attention captured through brute force feel like? Depends on what social media platform you’re on. Some social media platforms will let you scroll right past their advertisements. Some will try to weave ads between your desired content. Others will sit you down Clockwork Orange style and force you to both watch and listen to a video advertisement.

Location, Location, Location.

Video advertisements reign supreme as the digital real estate advertisers want. On both a per click and per view basis these are the most lucrative advertising slots social media platforms have to offer. Solidifying this is the fact that not every platform can offer video advertisements in the same capacity.

Twitter shareholders are consistently disappointed with the company’s advertising revenue results. The crux of this shortcoming lies in the high touch nature of the Twitter user experience. Users can easily ignore and scroll over a promoted tweet. This feeling of control is foundational to the Twitter UX.

Being a platform for which users already actively seek video content is the prerequisite requirement for platforms wishing to sell video advertisements. Consuming video content is a passive activity compared to the laborious task of scrolling news feeds. This how the unique UI & UX of each platform determines their advertising potential. Facebook, Instagram, Reddit, Twitter, LinkedIn, TikTok, and Pinterest all rely on a scrolling news feed. The news feed is a fixed path where users must either scroll north or scroll south. Along this fixed path are slots for which advertisers can insert their campaign, the following represents the news feed digital real estate offered.

The white space represents distractions from the advertisements. For example, on Facebook mobile users can see both an advertisement and a portion of the next post in their feed. Perhaps this preview of a friend’s post is key to Facebook’s addictive nature. LinkedIn mobile doesn’t do this as they allow advertisers to occupy the entire screen, the white space here is solely occupied by tools such as the search bar and notification icon.

Pinterest users scroll just as if they’re on any other newsfeed but they can never escape the advertisements. The advertisements are always there, in different locations, trying to camouflage themselves amongst your desired content. Their latest 10-K phrased it so eloquently; “They echo the visual style of organic Pins and are fully integrated into the design.”

Pinterest users seemingly engage in a subconscious game of navigating the tricky home feed. Both on the computer and on mobile the Pinterest home feed features more units of content than any other social media platform. If user satisfaction hinges on finding material worthy of being saved or pinned to their board then one could assume users are highly engaged with the screen’s content. With self interest fueling their behavior the data extracted from user engagement should be highly reliable and deeply revealing. This isn’t a platform like Instagram where a user may exhibit disingenuous behavior to impress followers.

Due to the unpredictable layout design of the home feed a user’s activity mimics the activity of someone solving an image identification CAPTCHA. The Pinterest Board then functions as the culmination of a user’s ‘correct answer’ from numerous CAPTCHA tests. Items selectively chosen to be pinned from the home feed stood out as what the user considered to be correct. Choosing to pin what you enjoy most is the correct answer.

Across all social media platforms no one is able to blur the line between desired content and advertisements better than Pinterest. Pinterest boasts “relevant ads don’t compete with native content on Pinterest; instead, they are content.” With two thirds of users being female and established as a leader for curating content for recipes, style, travel, quirky tips and tricks, and various home goods Pinterest is positioned to be bolstered by the ramifications of Covid19. The work from home movement has birthed a new status symbol that is perfectly aligned to benefit Pinterest; the background of your home office when videoconferencing. Search ‘Home Office’ on your Pinterest home feed and it will become evident just how unobtrusive the advertisements are. With enough time on the home feed a user is bound to find an advertisement they enjoy more than native content. As I’ve mentioned before, Pinterest isn’t a platform to boost your ego, it’s a tool of utility.

It’s now been one year since the Pinterest IPO and the stock is currently just below it’s IPO price of $19. The platform remains a hyper focused subscale social media platform in relation to it’s more established peers. With ~330m MAU it remains vulnerable to having their greatest innovations stolen by the big bully on the block of visual discovery, Facebook, with it’s own ~2.5b MAU & very healthy global ARPU $29.25 across it’s family of apps including Facebook, Instagram, & WhatsApp. Pinterest’s performance looks paltry in comparison, with Q4 2019 ARPU averaging $1.22 globally, $4.00 within the United States, and $.21 internationally.

Moving forward the following dichotomy can be true:

  • Overall advertising revenues will always lag industry peers as they simply don’t have a strong video product like Youtube, Snapchat Stories, Facebook Stories, or Instagram Stories.
  • Pinterest’s unique UI & UX positions it to be an advertisers platform of choice as Pinterst can distinguish itself through an unparalleled ability to convert a user’s interest and attention into actual sales (for select categories).