Pinterest has recently announced a significant partnership with Google, marking the tech company’s second third-party ad collaboration following a previous deal with Amazon. The move comes as Pinterest endeavors to bolster its advertising revenue.
Key Takeaway
Pinterest has entered into a new ad partnership with Google, aiming to capitalize on currently untapped international markets and increase its average revenue per user in these regions.
Q4 2023 Earnings Call and User Growth
During the Q4 2023 earnings call, Pinterest revealed financial results that fell below analyst projections. The company reported a revenue of $981 million for the period, reflecting a 12% year-on-year growth. Concurrently, the platform’s monthly active users surged to 498 million, marking an 11% year-on-year increase.
Impact on Stock Performance
Following the earnings call, Pinterest’s stock experienced a nearly 28% decline due to the revenue falling short of expectations. However, the stock rebounded after CEO Bill Ready unveiled the collaboration with Google. Ready emphasized that the integration of new ad capabilities with Google has already shown promising outcomes.
International Market Focus
Bill Ready highlighted the significance of the Google partnership in monetizing Pinterest’s international user base, which constitutes 80% of the platform’s users but contributes only 20% of its revenue. The collaboration with Google is anticipated to enhance the average revenue per user in these global markets.
Enhancing User Experience
Ready also discussed Pinterest’s efforts to expand its user base and engagement through the implementation of AI and innovative formats. The recent introduction of the collage feature, available to all iOS users globally, enables the creation of new images using stickers and objects. Moreover, the company reported that 75% of collages feature shoppable product pins.
Additionally, Pinterest’s auto-organizing feature, designed to identify similar pins and prompt users to create boards, resulted in a 30% increase in boards created on the platform. The company’s generative AI-based search guides have been instrumental in assisting users in refining their queries and facilitating their journey towards making purchases.
Embracing Inclusivity and Diversity
Last November, Pinterest initiated trials for a new tool aimed at incorporating body type ranges in search results, demonstrating the platform’s commitment to fostering inclusivity and diversity.
