Two and a half years after launching its first paid ads, Pinterest is finally ready to compete head-on with Google, Facebook, Snap Inc. and others for big brand dollars.
Specifically, the San Francisco-based player has spent a couple of years building a measurement and data tool, search-like targeting and video ads to make the case for bigger brand budgets. But Pinterest's ad business has been slower than others to catch on—it reportedly made $300 million in 2016—partly because its 150 million monthly users are small potatoes to behemoths like Google or Facebook.
"I think people have crossed into a threshold where they're really paying attention and seeing us as a platform where they need to invest in the same way that they have to invest on Google and Facebook—I didn't feel that a year ago," said Tim Kendall, Pinterest's president.
Adweek talked to Kendall about the virtual pin board's video, measurement and ad plans for 2017 and why more brands are buying into the site's advertising.
Adweek: You've been president of Pinterest for about 10 months and have made a number of acquisitions, hires and new features. What can we expect for 2017?
Tim Kendall: The eye-opening point that you're going to hear from us all year is, "We're a mass reach play." A marketer tends to think, "If I want mass reach with my customer, I go to Facebook with their 1.7 billion users or I go to Instagram because they have 600 million users." But if you think about the major CPGs and retailers, the audience that drives all the decision-making are women, 25 to 54. If you want to reach those people, we reach 80 percent of what Facebook reaches every month. And we reach more of that segment than Instagram, Snap or Twitter.
With the rise of Snapchat and other digital platforms, are you worried about attracting millennial and Gen Z users?
We just looked at this, but I actually think on a millennial basis we're pretty comparable to Snapchat and we're significantly bigger than Snapchat when you're trying to reach female millennials.
Pinterest has always been a platform for marketers, but it hasn't ever broken out in a big way. What is it going to take?
I would agree that there's a perception that Pinterest is just there. I built all of Facebook's ad products in 2006 and 2007, and the conversations that I'm having with marketers right now are conversations that I had with marketers in 2008 and 2009. The perception of Pinterest kind of being there but not having crossed into the main fold of advertising spend is driven by a bit of a distorted view about how Google and Facebook got to where they got. The revenue trajectory that we're on is steeper than the trajectory that I saw when I was at Facebook. From 2014 to 2015 we quadrupled revenue from $25 million to $100 million, according to The Wall Street Journal. And from 2015 to 2016, we tripled revenue.
Where do you expect revenue to be this year?
We're not talking about that publicly. I expect us to grow significantly.
Pinterest historically skews toward women. Are you doing anything specifically to target males and get them onto the platform?
We don't feel like we need to. If I looked at our sign-ups today, 40 percent of them are male and one in four men in the United States are on the service. When I joined five years ago, we were 98 percent female and 2 percent male. Now it's about 70 [percent female], 30 [percent male]. The other thing that is lost on advertisers and sometimes journalists is that there's an assumption that every other platform is 50/50 female/male and that's not the case—all social networks skew female. Instagram is 60/40.
There's also a perception that Pinterest ads are primarily for retailers. True or false?
We're very strong in retail, but I would say equally strong in consumer-packaged goods, including beauty. L'Oréal and Estée Lauder are two of our biggest advertisers.
We have seen success with entertainment, especially in 2016, but candidly it's not at the same scale as retail. We've also seen really good success with financial services. When women find out that they're pregnant, as an example, they create a board within a week for the nursery, clothing and all of the other stuff associated with having a baby.
This fall, Pinterest opened up video advertising. Why are you seeing long-form video take off more than short clips?
I think it's easy in 10 seconds to entertain. I think it's harder in 10 seconds to inspire and educate. But don't misconstrue long form for 10 minutes—I think it's 30 to 90 seconds. What we see with that category of video is that it gets saved at a 50 percent higher rate on the platform than shorter, bite-size content.
In light of Facebook and Twitter's recent video measurement flubs, there's been a lot of concern from marketers about platform-specific data. Are advertisers happy with measurement on Pinterest?
Last-touch attribution is easy and it's undisputable—that is the very nature of the bottom of the funnel. It's also where I would argue that the least amount of incremental value gets created for the marketer. The way that Facebook has gotten scale is by building a phenomenal product that allows marketers to remarket to people who are already in the market and then get last-touch credit. But our view is that credits just get pushed around at the bottom of the funnel, and we believe that the real value to a marketer is new growth. We talk about that internally as first touch and what we want to do through these measurement partnerships is show the advertising world that first touch creates as much, if not more value, than last touch.
This story first appeared in the January 16, 2017 issue of Adweek magazine.