$137.8B U.S. ad spend for top 200 advertisers
Pinterest hasn't brought its ads to market yet, but it's swinging for the fences in terms of what it hopes to charge for them.
The social-bookmarking company is asking for hefty spending commitments between $1 million and $2 million from prospective advertisers, and it's looking to price CPMs between $30 and $40, according to three executives briefed on Pinterest's ad pitch.
The pricing makes it clear that Pinterest intends to have a premium ad offering, similar to Instagram -- at least for now. Instagram tested its first ads last fall with brands like Burberry, Levi's and Lexus and has emphasized high-quality imagery and been slow to bring new advertisers into the fold.
Pinterest began testing promoted pins on the web and its mobile apps almost six months ago with a set of businesses that hasn't been disclosed. However, these initial promoted pinners aren't being charged, since the stated intent by Pinterest CEO Ben Silbermann last fall was to test the ad product and solicit user feedback.
Test pins have only been appearing in search results and category feeds that surface trending pins on topics like "health and fitness" and "home decor," not in users' streams which are the first thing they see upon entering the site. They're marked with the text "promoted pin" and an icon at the bottom of the post.
No date has been given for the launch of paid Pinterest ads, but they've been anticipated since the company's user base began to explode in late 2011 and early 2012. In addition to being highly engaged on the site, Pinterest users were found to have high commercial intent when browsing through pins picturing products for sale.
Pinterest has been popular with brands since then, and retailers have been a particularly avid category, since Pinterest has already helped drive sales for them through organic posts.
Pinterest currently doesn't generate any revenue, though it once tested affiliate links. The company has raised $564 million from investors.
The spend commitments sought would be a barrier for many brands. Pinterest's premium pricing model is reminiscent of how Apple brought iAd to market in 2010, according to one of the executives briefed. Prospective buyers balked at the high starting price of $1 million. The price came down substantially in the years that followed.
"We've been experimenting with promoted pins with a small number of advertisers since last fall," a spokesperson said, an a statement provided to Ad Age. "We are continuing these tests, but we don't have any announcements to make at this time."
Alexandra Bruell contributing.