How Does Pinterest Make Money?

Launched in 2010, Pinterest is one of the fastest-growing social network and among the most highly valued startups by venture capitalists in the world.

Pinterest introduced unique strategies which let users save and share pictures and content of their interest in the form of pins.

To be specific, a pin is a sort of visual bookmark. It works similarly to hyperlinks, which take the user to the website it was created when it’s clicked on.

In This Article

How Does Pinterest Earn Money?

They use features like Pins and Pinboards to earn revenue. They also use the “buy it” button to promote products. Their income has been more than $260 million in recent years. Pinterest has also invested in several companies in the past, such as YouTube, Flickr, and many more.

Presently, the social network has around 265 million monthly users. This large user base is two-thirds women and is highly valuable to advertisers. Users bookmark images they find online by “pinning” them to their personal inspiration “boards.”

As a matter of fact, having grown such a massive user base, billions of contents are pinned up each day. Taking account of this, Pinterest planned strategies to earn and cultivate their revenue from this zone.

Pinterest Revenues

Until 2013, the company didn’t have a revenue source. Growth of the company was enormous within this very time itself. Initially, the Pinterest Business Model had been designed strategically to capitalize on the network effect (the first preference network, money later). Looking at the growths, the company extended its vision to generate earnings from their brilliantly growing platform.

For this, the company launched its revenue generation feature ‘the promoted pins’ in 2013, which is still in its beta stage.

Promoted pins are some advertisements in the form of pins on the user dashboard, search results and other places on Pinterest which are laid down by an identified sponsor and which redirect to the sponsor’s website or application.

The promoted pins, analogous to promoted content over other social media networks, are user-targeted. Hence, as the user and the advertiser gets what they need. Capitalization works as the reach of the pins depends on the bids by the sponsor, and the proposals rely on the target interests and other demographic factors.

Pins and Pinboards

Pins are the hero element of the business model of Pinterest. Everything in the platform revolves around them.

Buyable pins – Pinterest, just like other social networking sites like Facebook and Twitter, has introduced a ‘buy it’ button. It let users buy directly from Pinterest without even visiting the merchant’s website.

Promoted Pins – The main and the sole revenue earning source of Pinterest are promoted pins. Promoted pins are advertisements / paid content by some identified sponsors in the form of pins which are camouflaged yet differentiated from the usual pins.

Pinboards – Users can group similar pins under a Pinboard. Pinboards can be both private or public. Public pin and pinboards associate a feature which can be viewed and repinned by other users.

Pinterest investing timeline

1. 2012, May 1 – Pinterest adds automatic attribution of authors on images originating from Flickr, Behance, YouTube, and Vimeo.

2. 2012, May 17 – The first funding: Rakuten (Japanese electronic commerce company) announces its $100 million investment in Pinterest, alongside investors including Slow Ventures, Andreessen Horowitz, Bessemer Venture Partners, and FirstMark Capital, based on a valuation of $1.5 billion.

3. 2013, February 13 – Pinterest marks raising $200 million at a $2.5 billion valuation from Bessemer Venture Partners, Andreessen Horowitz, FirstMark Capital and Valiant Capital Partners.

4. 2013, March 20 – Pinterest acquires some mobile startup Livestar.

5. 2013, October 11 – With the company’s co-founders, Lucas Baker and Frost Li joining Pinterest as engineers, Pinterest acquires Hackermeter.

6. 2014, May 14 – Investors SV Angel invests $200 million in funding at a $5 billion valuation on Pinterest.

7. 2015, May 8 – Pinterest next raises a total of $553 million at an $11 billion valuation, and allows employees to sell part of their vested stock in secondary markets.

Demographics

The statistics of Pinterest in recent times report a growth $261 million in year-over-year revenue in the second quarter of 2019 already, with a change percentage of 62%.

They say nearly $60 million more than the previous year’s first quarter. The majority of its earnings are attributed to the United States of America.

Did They face Any Loss?

They also reported a net loss of $1.16 billion in 2019, while the statistics of damage in 2018 was $38 million only. The change percentage stands at 2919%.

Moving forward to the third quarter of 2019, Pinterest still managed a very significant increase compared to the last years with a 47% growth in revenue.

Conclusion

Pinterest is no longer a moms-only social network. However, 300 million people find and collect useful links and images around the world (which is quite a little portion of the audience).

Pinterest makes money through its advertising network, which includes Promoted Pins and its revenues are not as massive as Facebook or Instagram. Pinterest’s revenue finds comparable bases to Snapchat’s.

Here are some FAQs about Pinterest Income

How to get followers on Pinterest?

Understandable that it is intimidating to join Pinterest and see a big fat zero next to your number of followers, but building reach on social networks takes work and time. It eventually happened with good contents and promoted pins.

Isn’t Pinterest just for women?

True that women account for 80% of registered Pinterest users, plenty of men use it as well. While it’s up to the user to post content to the site and, in turn, find their core audience — men, women, Millennials, older generations, students, professionals, etc. — using Pinterest for business can help one drive traffic to their site, bring in leads, and even boost sales.

What is the difference between a pin, a repin, and a favourite?

A repin is analogous to retweet (on Twitter). For instance, reposting an image that’s already on someone else’s board. Notifications are sent to let the other person know when some else repin something of theirs.

What’s another way to show my pins to my audience without always linking to Pinterest?

Yes, there’s a couple of ways. Just like Facebook, Twitter, Google+, and a slew of other social networks, one can showcase their account on other marketing collateral which the user has by copying the link and sharing on the other marketing collaterals.

Pressing that “heart” button on a pin will send a notification to that person and will also favourite their badge.