Pinterest's Promoted Pins - An Opportunity for Luxury Brands?
Pinterest, the 3 year old image and video sharing site beloved of wedding planners, cooks and crafters, has announced it is going to start experimenting with advertising, in the form of promoted pins.The new initiative is a trial at the moment with 'a select group of businesses', none of whom will be paying for the service. The promoted pins will only display in 2 places initially - in search results and in category feeds. So, for example, hotels and travel companies could promote their products in a user's 'holidays' category feed, or a jeweller could promote their offerings when a user searches for 'wedding jewellery'.Ben Silbermann, Pinterest's CEO and Co-founder was clear in his blog post announcing the new service that these ads would be tasteful, transparent, relevant and improved based on user feedback. Banner ads and pop ups are not on the agenda.The move is an inevitable one by the company and it's perhaps a surprise it has taken so long to introduce it. The monetisation path for social networks has long been set by the likes of Facebook and Twitter, and Pinterest has investors to satisfy and a $2.5billion valuation to justify.We're confident the trial will be a success - Pinterest is taking careful steps and being transparent and open from the very start. And it's users would have known this was coming sooner or later. The trick will be to make sure that promoted content doesn't overwhelm organic content - a balance that Twitter in particular is always challenged to strike - and because of that promoted content may well be a limited revenue stream unless the popularity of the service continues to grow. We fully expect other revenue ideas - such as affiliate revenues for items purchased as a result of the site - to follow soon.Will it be an attractive channel for luxury advertisers? Well, Pinterest has plenty going for it. Its content is highly visual and its audience is female and well-educated - all significant pluses for luxury brands.But there are a few clouds gathering on the horizon. Pinterest still has a largely US-based following but hasn't taken off in Europe to the same degree - 60% of Pinterest's traffic comes from the US compared to only 20% in Europe. For businesses who already sell in the US or looking to extend their reach there, it could be attractive but the UK audience hasn't grown as fast or as big as many thought it would.There are also some early signs that Pinterest's popularity may have peaked - comScore recorded 46.9m monthly users in July, down from a peak of 54.2m in April. And well backed rivals such as Fancy may soon be nipping at Pinterest's heels.Assuming the trial is successful, those brands already seeing significant traffic and conversion from Pinterest would be foolish not to make enquiries into promoted pins. Others would be better advised to sit back and wait to see how the battle of image sharing networks pans out before committing any of their marketing spend.