Pinterest on New Year's Day plans to begin selling ads on the site to brands at a cost per thousand (CPM) in an effort to better compete for ad dollars with Twitter and Facebook, as well as search engines Google, Bing and Yahoo. Promoted Pins, launched eight months ago to its brand advertisers in beta, will be available to all advertisers beginning in January.
Major upgrades to Promoted Pins that are in the works will give brands new ad formats and advanced targeting features. Pinterest says that early results look promising. Brand advertisers achieved about a 30% increase in earned media from their campaigns in terms of site users who saw a Promoted Pin and thought it was good enough to save to one of their own boards. The average Pin gets repinned 11 times. Brands also see those results, and sometimes higher, from Promoted Pins.
The company said brands using the auction-based cost per click (CPC) model also see success. Many of the self-serve beta partners see gains in traffic and impressions, explains Joanne Bradford, head of partnerships at Pinterest. "We’re still making tweaks to the product and want to make sure we get it just right before we roll it out to all businesses," she wrote in a blog post.
While brands see success with Pinterest, the company needs to rethink how it competes with other platforms -- especially Facebook. The platform attracts consumers who gravitate toward luxury brands like Prada, Manolo Blahnik, and Jimmy Choo. Seven in 10 consumers who prefer luxury items used social media in the past year, but more than half use Facebook, per research from Epsilon and The Luxury Institute. The analysis compares 30,000 luxury shoppers to reveal insights, myths and stereotypes of the luxury shopper. Of those, more than 25% engage with brands or retailers on Facebook. When consumers under the age of 50 are considered, the number rises to 34%.
To compete, Pinterest will teach brands how to best use its platform. Pinstitute was built as a way of teaching marketers how to connect with users, as well as building native ads and measuring the performance. It will give them insight into the types of Pins that perform well, and insight into what Pinterest users care about.
The company also expects feedback on the types of services and features that will help marketers get better results from the platform, so it is inviting a select group of brands and agencies to attend quarterly Pinstitute workshops where they can learn, exchange ideas and meet with the Pinterest product team. The first one is scheduled for March.