In fact, we feel we have a really unique opportunity to satisfy
both the needs of users and partners with video that others haven't
been able to do. If you look at the video that is
disproportionately consumed on the phone today, it's short,
snackable type things like user generated content or news.
Where we think we have an opportunity -- and if you think about
what Pinterest users do -- they use the service to plan their life.
They use it for, "What am I going to cook for dinner tonight? What
shoes should I buy for the event when I go out Saturday afternoon?
Where do I want to travel to? What kind of home do I want to live
in a year? What kind of car do I want to drive in two years?" There
are all these utility-oriented planning things that users are
doing, so we think there is a really unique opportunity for us to
incorporate video in that way around those topics.
There is all this high-utility instructional video out there
that's not getting consumed through the social networks on the
phone. Most people are watching the short snackable UGC or news.
Our users are coming to Pinterest to figure out what to cook, for
example, and all of that can just be enriched with high utility
instructional videos.
Ad Age: That sounds like you want to get
publications and media companies in the mix. Is that accurate?
Mr. Kendall: Yes. We think that is going to be
the case especially with our efforts in video; it is going to
become increasingly important for content providers.
We think it is important that we figure out the right value
exchange with those content providers in a way where they can
provide their video and we can show it to the right people and then
they get value in exchange for providing us with that video.
Ad Age: When you're talking about the value
exchange between a publisher or media company, is that just
exposing them to your audience or is there an actual monetary
value?
Mr. Kendall: I think it is really early days
for us. But I think it is pretty clear that the world of the value
being the click to your mobile website is going to eventually go
away.
Ad Age: Can you elaborate on what you mean when
you say the value of the click is going to go away?
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Mr. Kendall: I think for a media publisher
whose value and assets is just media, the model today is "I have to
get people onto my site to watch my media." It's not clear that in
several years that necessarily needs to be the model. What media
partners want is for their media to be consumed and I think they
are open to exploring where and how that media gets consumed,
whether it is on their website or within a partner app. I think
they are open to having that conversation as long as value gets
delivered.
Ad Age: Let's switch gears. I've spoken to a
lot of agency executives in regards to Pinterest and many said that
when Pinterest launched its API a year ago it wasn't very well
received. Can you share with our readers what has changed?
Mr. Kendall: I would just disagree with that
statement, that our launch wasn't smooth. We launched in June 2015
and it was invitation-only for partners to build world-class
experiences and we didn't let everyone on.
All partners don't necessarily love it, especially the ones that
weren't in the beta.
We now have 11 API partners and the data that counters your
question is 10 months after the launch, 50% of our revenue was
generated by these partnerships. So, it went from 0% of revenue to
50% of revenue in Q2 of this year. All going through the Marketing
Developer Partners program and the ads API.
Ad Age: Has that revenue continued to grow?
Mr. Kendall: Yes.
Ad Age: Can you put it in perspective?
Mr. Kendall: Well, we grew revenue from 2014 to
2015 five fold. And we are very pleased with the revenue trajectory
from 2015 to 2016. The way that we release products is through
alphas and betas and we actually run those through the MDP as
well.
Ad Age: So, few would deny the intent that
lives on Pinterest. Mary Meekers brought it up
in her Internet Trends report and anyone who has ever been
engaged to be married has likely created a Pinterest account. But
can you explain how return on investment is measured when
transactions happen outside of Pinterest? Because people can get
inspired to buy something, but purchase it at an actual store.
Mr. Kendall: What we have started to do on the
measurement side is we released our Oracle Data Cloud studies in
June across 20 campaigns in consumer packaged goods. We
demonstrated a five-times lift over the benchmark in terms of sales
generated by ads shown on Pinterest. We hired Gunnard Johnson, who
runs measurement science and insights for us. Immediately prior to
that he ran measurement for Snapchat. And I think that is a pretty
telling move in terms of the potential that Gunnard saw in our
ability to deliver on that intent story and show measurable
sales.
Something we hear quite often is social media engagement doesn't
create value, that it's just about the impression. And we just
fundamentally see something very different on Pinterest. What that
means is when people save something, click on something on
Pinterest, the multiplier is they are more likely to buy.
Ad Age: Anything else you would like to
add?
Mr. Kendall: We do think the click is still
very important, but let's run the click through the lens of a an
advertiser, like a retailer.
Imagine someone like Target comes to us. Traditionally, the way
Target might come to a publisher like Pinterest is they would say,
"Hey, I want to drive sales on Target.com." And what the publisher
would do is he would put ads in front of people who would click on
them and users would then go buy things on Target.com.
But as we move to the phone that becomes, quite frankly, a
harder value proposition, especially for the user. And as more and
more time and attention gets focused within these social services
and utility services like us, people are just spending more and
more time there.
So if Target came to us and wanted to sell more stuff from
Target.com what we would suggest is they create a Promoted Video ad
that shows how a living room furniture setup could be configured in
a home. It would be more of a "how to" kind of video; they would
show how to set up your living room with an ottoman, a couch, and
if a user taps the video, it would play more fully. Underneath it,
we could have a carousel or tray of all the things in that video
that can be bought through Buyable Pins.
So, here is the value proposition: The user is happier because
the user doesn't have to go somewhere else and when they are in the
moment, and are compelled to purchase something, they can do it on
Pinterest and still get what they want from Target.
