Pinterest to Let Brands Target Their Existing Customers With Ads

Social Scrapbooking Service Also Developing New Way to Credit Ads

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Pinterest's advertising product is only a few months old, but the social network isn't wasting any time in trying to catch up to Facebook's and Twitter's more sophisticated ad businesses.

Pinterest is working on a way for advertisers to target people in a brand's customer database -- like the consumers on an email list -- with ads on the social scrapbooking service. The company is also building a measurement tool so that marketers can credit their ads on Pinterest with the purchases people make on a brand's e-commerce site.

Pinterest quietly disclosed its plans late last week when it previewed an update to its privacy policy that will take effect next month. A company spokesman confirmed the plans to Ad Age.

"While we don't have the new features available to advertisers yet, we are developing conversion tracking and audience targeting and the privacy policy update allows us to launch them," the spokesman said in an email. "We feel both features will help our partners understand how the ads impact their business and also make Promoted Pins even more relevant to Pinners."

Pinterest users will be able to turn off the ad-targeting feature.

Pinterest's customer-database targeting option is similar to Facebook's Custom Audience tool, which the social network introduced in August 2012. Facebook's targeting feature allows an advertiser to upload a list of the email addresses or phone numbers provided to a brand by its customers. Facebook then uses an encryption process called "hashing" that anonymizes the advertisers' list and matches it to Facebook's own database of users' email addresses and phone numbers. Matched users are then shown the advertisers' ads on Facebook. Twitter added the same targeting option earlier this year.

Pinterest is also borrowing a page from Facebook's ad playbook with its upcoming conversion tracking tool. An advertiser will drop a tracking tool called a pixel on its site that will be able to track the actions people take on the site, like products they browse and purchase. That pixel will be able to refer back to the Promoted Pins shown to that person in order to link an ad someone saw or clicked on Pinterest with their behavior on the advertiser's site.

The tracking tool will be limited to measuring and attributing ad performance. Advertisers won't be able to target ads on Pinterest based on the actions taken on their sites that the pixel tracks. "We have no plans to retarget off the data collected via the pixel," the spokesman said.

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