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How Pinterest makes Money?

3 min read
How Pinterest Makes MoneyHow Pinterest Makes Money

What is Pinterest?

Pinterest as the fastest growing social network is one of the most assessed startups by venture capitalists in the world. This social network lets users save and share contents of their interest in the form of pins where a pin is a visual bookmark that directs the user to the website it was created when it’s clicked on. Pinterest is used by everyone who would like to have a collection of images or content of their personnel absorption which has become one of the reasons that it has been rising at a higher speed than any of the comrade players of the game. Billions of content ranging from products, interior design, architecture, clothing, places, tutorials, and even fan art and fan fiction are pinned by over 100 million active users over Pinterest globally.

How does Pinterest make money?

A question trending on Google searches ever since the website has started its service is How does Pinterest make money? The company which was launched in 2010 initiated its revenue generation feature ‘the promoted pins’ in 2013 which is still in its beta stage, and the network effect of Pinterest is designed with a business model that strategically describes itself as “network first, money later.”

Pinterest, just like other gamers in the social media networking market, has chosen its revenue model on an advertisement based platform benefitting from the users visiting the website. Its business model is aligned with Cataloging, E-commerce, and content aspects along with social networking features. When talking about the revenue generation, the company hasn’t used it’s resources entirely although it has a high capacity and potential.

Significant elements of Pinterest Business Model.

  • Pins

Registered users can save their exciting contents on the web in the form of badges which can be collected by the browser extension of Pinterest / through uploading pictures on the Pinterest website.

  • Pinboards

Users group similar pins under a Pinboard which can be both private and public. Also, open badges and pinboards can be viewed and re-pinned by other users.

  • Buyable pins

Pinterest, just like Facebook and Twitter, lets users buy directly from Pinterest even without visiting the seller’s website where the seller or the buyer is not charged for buying via Pinterest. This feature enhances the experience of the users providing a legitimate reason for the continuous selection of the platform.

Nonetheless, the service is only provided to sellers who use BigCommerce, Shopify or Salesforce Commerce Cloud and it isn’t sure whether Pinterest charge commissions from these partners. Stripe and Braintree act as a digital wallet to store users’ card numbers and to conduct the transactions on the Pinterest platform itself.

Pinterest didn’t have a revenue source till 2013 until it released its new feature – the Promoted Pins. These are the primary and only revenue source of Pinterest which are advertisements / paid content by identified sponsors in the form of pins that are camouflaged yet differentiated from the usual pins. Pinterest target these advertisements according to the searches, interests, and demographics of the users just like Google and Facebook. Ads in the form of pins on the user dashboard, search results and other places on Pinterest are promoted by an identified sponsor who then will be redirected to the sponsor’s website or application. The promoted pins are user targeted so that the user and the advertiser will mutually get what they need. Their reach is depending on the bids by the sponsor, and in turn, the proposals rely on the target interests and other demographic factors. That is how Pinterest makes money 

Why is Pinterest a better social network for Businesses?

Pinterest itself has created a niche which can be tapped by marketers unlike in other networking platforms which have a primary motive of connecting people with others. Pinterest connects people with content related to their absorption which results in a better click-through rate on advertisements and more conversions.

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