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Pinterest, the Social Network-Search Engine Hybrid, Brings New Search Ads Out of Early Testing

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Pinterest said Wednesday that it is introducing a search advertising product with a dozen new clients, who join a batch of brands such as Home Depot, Target, Garnier, eBay and Barilla that were already testing an early version. The offering includes keyword search and shopping campaigns that appear very similar to the product listing ads found on Google.

Search advertising generated $16.3 billion in the first six months of 2016, but the majority of that revenue went to Google, as it saw 96% of all search-ad clicks on mobile devices in the fourth quarter, according to digital marketing shop Merkle. If Pinterest could capture even a small slice of that pie, it would translate to massive media dollars for the brand.

Marketers haven't been able to decide how to best spend their ad dollars with Pinterest, as its newest offerings include video, social e-commerce and search. Still, the platform sees more than 2 billion queries each month, and given the strength of the signals about consumer intent that searches provide, marketers may have their best use for the platform right there.

Pinterest says that its users turn to Pinterest three months before making a big purchase and that 97% of queries performed on its platform do not mention brands. Its pitch is that this activity represents a prime opportunity for marketers to capture new customers.

"People don't know exactly what they want, but there is high commercial intent in our search queries," said Jon Kaplan, global head of partnerships at Pinterest. "Search ads on Pinterest will enable our marketing partners to reach those customers when they are in discovery mode."

Pinterest declined to name the new marketers that are using its search ad product.

Although bidding on certain keywords is done in a fashion similar to Google's familiar keyword search auctions, there are several important differences that advertisers should be aware of with Pinterest, according to Jessica Schank, consumer engagement manager at Barilla.

"It's a visual platform, so creative is very important," Ms. Schank said. "We also learned that on Pinterest, search queries are pretty broad." That means advertisers can seek consumers in the more open-minded "upper middle" marketing funnel, she said, as opposed to platforms where consumers are closer to purchase and accordingly enter pretty specific searches.

Barilla has found success focusing on keywords like "quick and easy recipes" or "pasta dishes" on Pinterest, Ms. Schank said. Its cost-per-click was lower and clicks led to 50% more event actions on its website when compared to Google, she added.

"We like it because it fills both social and search, but you have to take into account the context of everything," she said. "Immediately after we saw results we definitely felt this was a compliment to Google."

"For instance, we are very focused on recipe content on Pinterest where on Google, we can expand into more things like product, FAQs and things like that," she added.

Pinterest is not opening up its search offerings to just anyone yet, adding that it needs to fine-tune and develop its algorithm before it can deploy it at a larger scale.

Ad Age first reported in July that Pinterest was updating its advertising strategy to place more focus on expanding its keyword search offerings. The company is building its infrastructure and also announced a partnership with Tel-Aviv based marketing outfit Kenshoo to help bring demand to its search platform.

"What Pinterest is doing is actually something we think has the potential to be really big marketplace for our class," said Todd Bowman, director of SEM and feed management at Merkle. "The general in-house information we have on them is the volume is good, but not great. But the ROI is positive and that isn't surprising because there isn't a lot of competition."