Pinterest announced a partnership with Amazon Ads, the e-commerce giant’s advertising platform, to start showcasing third-party products within the social network that connect users to content-related products.
According to a blog post published yesterday, the visual discovery platform said that Amazon will become its first partner when it comes to displaying third-party ads. Since millions of users have an account with the e-commerce company, this will make it easier for them to complete their checkout process.
“Over 463 million people come to Pinterest each month to create a life they love. Brands and products are a critical piece of this journey, enabling Pinners to move easily from inspiration to action and advertisers to realize value in connecting with users with high commercial intent”, the company emphasized.
Bill Ready Keeps Moving Pieces to Make Pinterest Content More Shoppable
The partnership is part of Pinterest’s ongoing effort to monetize its content by making “every Pin shoppable”. Amazon ads on the platform are expected to be fully rolled out later this year.
This is one of the latest moves from the new Chief Executive Officer of Pinterest, Bill Ready. The new head of the social network replaced its co-founder, Ben Silbermann, back in June 2022 after serving for years as President of Commerce for Alphabet (GOOG) and Chief Operating Officer for PayPal.
His background in e-commerce and digital payments gives Ready the skills to exploit Pinterest’s commercial potential and this partnership with Amazon Ads is aiming to achieve that.
“Today, we’re taking meaningful steps towards expanding our ads business by opening up third-party ad demand on Pinterest, starting with Amazon as our first partner. Looking forward, we are excited to further leverage and satisfy the strong commercial intent of our users and deliver long-term shareholder value.”, Ready commented in regards to the deal.
Pinterest Aims to Further Monetize its International Users with This Partnership
The partnership was announced alongside the company’s financial results covering the first quarter of the 2023 fiscal year. During the three months ended on 31 March, Pinterest managed to grow its Global Monthly Active Users (MAUs) to 463 million resulting in a 7% year-on-year increase.
However, user growth in the United States and Canada was a bit muted as Pinterest only added 1 million MAUs from that region to the total. This is a bit concerning considering that more than 80% of Pinterest’s revenues come from the two countries.
During the earnings call that came after the publication of these results, Todd Morgenfeld, the company’s Chief Financial Officer, argued that the company is having a hard time beating its previous years’ figures as user growth accelerated during the pandemic and even later.
Based on the comments made by Ready and Morgenfeld, it seems that the Amazon (AMZN) partnership is looking to further monetize Pinterest internationally as the company believes there is significant untapped potential in regions like Europe.
Responding to a question from one of the analysts attending yesterday’s earnings call, Ready asserted that “while we [Pinterest] are under monetized overall, we are really under monetized internationally. And if you look at our results, you see really positive growth on a percentage basis internationally for us, which is evidence that there’s a lot more potential there”.
During the first quarter of the year, Pinterest generated only $93 million in revenue from Europe and $24 million from the rest of the world corresponding to 15% and 4% of the firm’s global turnover respectively.
However, the company’s user base from both geographical segments is quite large with 128 million MAUs in Europe and 240 million MAUs in the rest of the world. These users remain largely unmonetized compared to their UCAN peers, bringing only $0.74 and $0.10 per user respectively during the first three months of the year compared to $5.11 per UCAN-based user.
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