Pinterest recently announced a significant ad deal with Google, marking a strategic move to enhance its advertising revenue. This partnership, revealed during the Q4 2023 earnings call, comes as the platform approaches a milestone of 500 million monthly active users (MAUs). Google joins as the second third-party ad partner for Pinterest, following a multiyear agreement with Amazon last year.
Despite posting Q4 results slightly below analyst expectations, Pinterest reported revenue of $981 million, reflecting a 12% year-on-year growth. Monthly active users surged to 498 million, showing an 11% year-on-year increase.
Following the earnings call, Pinterest's stock experienced a dip of nearly 28% due to revenue falling short of expectations. However, the announcement of the Google partnership led to a swift recovery. CEO Bill Ready highlighted that the ad integration with Google had already commenced a few weeks prior, yielding positive outcomes.
Ready emphasized that the partnership aims to monetize untapped international markets by leveraging Google's Ad Manager to serve ads on Pinterest. With 80% of Pinterest's user base located outside the U.S. but contributing only 20% of revenue, this collaboration seeks to bolster average revenue per user in global markets.
Expanding Audience Engagement and Features
Pinterest's CEO outlined strategies to expand the platform's user base and engagement, including leveraging AI and introducing new features. The recent rollout of the collage feature, available to all iOS users globally, enables users to create visually appealing images using stickers and objects. Additionally, 75% of colleges now feature shoppable product pins, though conversion metrics were not disclosed.
In the past year, Pinterest introduced an auto-organizing feature that identifies similar pins and encourages users to create boards, resulting in a 30% increase in board creation. Ready also highlighted the implementation of generative AI-based search guides, assisting users in refining their queries and facilitating closer alignment with purchase intent.
Promoting Inclusivity in Search
Last November, Pinterest initiated experiments with a new search tool aimed at incorporating body type ranges to enhance inclusivity in search results. This endeavor underscores Pinterest's commitment to fostering a diverse and inclusive platform experience.
By forging strategic partnerships, leveraging innovative features, and prioritizing user engagement, Pinterest continues to solidify its position in the digital advertising landscape while enriching the user experience for its global community.
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