$46.8B Record U.S. agency revenue in 2015
Pinterest is finally setting out to make some money.
The social-bookmarking company catapulted to renown from total obscurity among marketers and publishers in late 2011, when its user base and the traffic it delivered began to spike. It's raised $564 million since it was founded in 2010, but has taken a leisurely approach to building a business.
That's about to change. Last fall it announced that it would test promoted pins, and ad-industry veteran Joanne Bradford joined the team in December.
Now that its ducks are in a row, it's poised to make a big push. It has more than a dozen marketers set to run campaigns with three- to six-month commitments, including Kraft, General Mills, Ziploc, Nestle, Lululemon, Gap, ABC Family and Expedia. CEO Ben Silbermann is hitting Cannes this year, following in the footsteps of Google, Facebook and Twitter, which have staked out big presences at Cannes over the years to court the ad community.
Ad Age reported in March that the company was pricing its ads aggressively, asking for $1 million and $2 million committments from prospective advertisers pricing CPMs -- the cost per thousand impressions -- between $30 and $40.
Pinterest's head of partnerships Joanne Bradford explained that the company is taking a "consultative approach" to ad selling, which means working closely with brands to help them understand what type of creative resonates with Pinterest users, for example. While Pinterest is currently locking in a several-month commitment at a specific spending level with its advertisers, she said it will eventually "get to the place where we're answering RFPs," but the current more labor-intensive approach is called for right now.
"In some ways, I feel like I'm putting a team of consultants on these partners' business so they get the best insights and learnings and understanding of the platform," said Ms. Bradford, a veteran of Microsoft, Yahoo and Demand Media, who came to Pinterest to lead its sales team in December. "That's our priority, and that's reflected in the price."
Pinterest doesn't report on how many users its has, though it does say that 75% of usage occurs on mobile (factoring in just its native apps and not the mobile web.) EMarketer puts its user base of people who use the service at least on a monthly basis at 40.1 million in the U.S. for 2014 and estimates that 85% of those users are female.
While that user base pales in comparison to Facebook and also lags Twitter (which reported 57 million U.S. monthly users in the first quarter of 2014), it's the makeup of users and their mindset while perusing Pinterest that's long intrigued marketers: they tend to be women who are interested in buying things.
"Our target is 25- to 54-year-old women, and Pinterest is a perfect fit," said Deanie Elsner, CMO at Kraft Foods Group.
Kraft will be running promoted pins -- mostly recipes -- in four categories: dessert plays that incorporate products like Jell-O and Cool Whip; Kraft cheese brands; Philadelphia Cream Cheese; and content from KraftRecipes.com.
Ms. Elsner observed that Pinterest has already been an effective place for Kraft to connect with harder-to-reach younger women between 25 and 34, some of whom are inexperienced cooks but want to learn.
"It lets them be the hero," she said of Kraft's practice of publishing recipes on Pinterest.
Scaling Pinterest's sales
Promoted pins will show up in searches -- where they can be bought on a CPC basis -- and in category feeds for topics like "health and fitness", "home decor" and "women's fashion." They won't show up in a user's home feed where recent pins to boards they follow appear, or within their own pin boards. They can be targeted by category or keyword and also by users' gender, city and the device they're using to access Pinterest.
The company isn't disclosing how its ads will be frequency capped.
"We haven't completely landed on it," Ms. Bradford said, noting that user feedback and data on usage patterns will be looked at.
The team selling promoted pins is still small within a company of about 300 people in total, though Pinterest won't give a number. There are currently about 20 job openings on Ms. Bradford's team.
While in the future she foresees launching a self-serve offering and making ads accessible to advertisers of any size, for now there will be a strong emphasis on manual review, which in turn will limit the quantity of advertisers.
"We have an ad quality team where we review every pin at this point in time," she said. "That's one of our scale barriers, but because [we have] such a high quality bar, it's really important to us. That's why we're working with such a small group of folks."