Analyst: Pinterest Found Singular Way To Use Search

Finding unique ways to use search continues to help Pinterest grow. Personalized search suggestions now reach one-third of Pinterest users, “making us think there’s tons of optimizations ahead,” wrote RBC Capital Markets analysts in a research note published Friday.

Pinterest reported revenues of $261 million for the second quarter, about 10% above RBC Capital Markets estimates.

In part, the analysts attribute the 30% increase in monthly active users for the quarter, up from 22% in the prior years, and an increase in average revenue per user from $0.69 to $0.88 in the second quarter of 2019 YOY, to global growth.

The ARPU in the U.S. rose from $1.98 in the second quarter in 2018 to $2.80 in the second quarter of 2019, according to Pinterest numbers.

Pinterest saw success in new verticals, like auto and entertainment, and an expansion among small- and medium-size advertisers.

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Despite Pinterest's narrower losses in its second-quarter results on Thursday, the company raised its revenue guidance for 2019. It told analysts it expects to report revenue between $1.095 billion to $1.115 billion for the year, compared with consensus estimates of $1.079 billion.

Ben Silbermann, Pinterest CEO, seems to agree. “We’ve improved [the] experience by making Pinterest more personal with improvements to search recommendations, so people can more easily find ideas they love,” he said during the earnings call.

These improvements and changes don’t just personalize search, they have the ability to cross-tag other market segments to make recommendations.

For example, if someone uses Pinterest to find ideas about clothing, the site might ask the user if they’ve thought about using the recommendations to redecorate their home. If someone wants information on health foods, it might suggest recommendations about exercise. 

Silbermann attributed growth to inventory of unique product pins during the quarter, up more than 50%, and adding video content to increase the lure to shop.

Pinterest simplified its ad system for SMBs, moved into six new international markets where it’s serving ads, and is giving  advertisers more ways to measure the effectiveness of their ad spend.

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