• by Karlene Lukovitz  @KLmarketdaily, February 7, 2023

Pinterest — which introduced its Idea Pins short-form video format in 2021 — is leaning into an aggressive growth strategy with shoppable video and advertising-based monetization at its core, executives said during the company’s year-end earnings report late Monday.

The social platform, which experienced a 6% decline in monthly active users (MAUs) in last year’s fourth quarter, is growing again. MAUs rose 4% year-over-year in Q4 2022, to 450 million, along with double-digit growth in mobile app users.

Despite some recent suggestions that Pinterest -- like Facebook before it -- has lost its cool factor, the platform is actually seeing its greatest growth among the Gen Z cohort, which grew by double digits in Q4, accelerating growth seen in Q3, according to CEO Bill Ready.

“We're building an experience that resonates with this audience, specifically around video,” he said in the earnings call. “In fact, nearly half of all new videos pinned in Q4 were from Gen Z users.”

To further deepen engagement, Pinterest is expanding quality videos from creators, brands and publishers, including through partnerships like a new one with Condé Nast Entertainment tied to seasonal themes. Pinterest grew its supply of video content by 30% quarter-over-quarter, according to the company.

Leaning into shoppability to drive engagement and advertiser results is a formal strategic goal, along with per-user monetization and operational streamlining. In surveys, more than half of Pinterest users say that they view the platform as a place to shop, but Pinterest historically has not made shopping easy, Ready acknowledged.

To correct that, the platform is now integrating shopping across its most-trafficked surfaces, including the home feed, search and related pins, to show users products most relevant to them, he reports.

“Over the long term, we also want to make every pin shoppable,” Ready said. “To that end, we're making video content on Pinterest more actionable using the same playbook we applied to static images. Over the course of this year, we will be deploying our computer-vision technology across our video corpus to find products and videos and make them shoppable.”

One initiative is creating a more seamless handoff by taking the user directly to the product detail page on the merchant's app, and deploying the platform’s mobile deep-linking format, or MDL, on shopping ads.

During the Black Friday-Cyber Monday period, MDL accounted for 40% of Pinterest’s shopping ads revenue, which grew 50% in Q4.

“People are shopping on Pinterest, and we are helping merchants find end-market consumers,” summed up Ready.

On the monetization front, more than 10% of Pinterest’s engagement is on video, and more than 30% of its revenue is now generated through short-form video, he reported.

Last year, the platform began allowing advertisers to create their own ads using the Idea Pin format, launched support for video assets in product catalogs, and partnered with music labels to enable adding licensed music to the short videos.

Pinterest has been working to help advertisers capitalize on users’ intent and eagerness to buy by offering a solution that enables them to connect with users across the funnel, Ready said.

In fact, its ad revenue is now driven in roughly equal parts by campaigns driven by brand-oriented, consideration and conversion KPIs. The platform has “seen advertisers who take a full-funnel approach see more success than those who are only active on one campaign objective,” with advertisers that used a multi-objective media strategy seeing up to a 50% improvement in sales lift compared to those focused on one objective, he reported.

Pinterest is also looking to help advertisers enhance relevance and personalization, he said, noting as an example its Q4 launch of ad-load management with whole-page optimization.

That enables flexing ad-load “opportunistically, in context, where ads are most well-suited for the user,” he said. “In our initial testing, this drove double-digit improvements in ad relevance on search, while simultaneously reducing CPAs for advertisers. We expect the whole-page optimization will enable us to continue to improve the efficiency with which we monetize our platform over time.”

At the same time, Pinterest has been working to improve conversion measurement solutions. A conversion API, also launched in Q4, has now been integrated with Shopify to give merchants a measurement tool.

In tests, advertisers using the conversion API with the Pinterest tag saw an average 28% lift in attributed checkout conversions and a 14% improvement in the checkout CPA metric, Ready revealed.

During last month’s CES event, Pinterest also unveiled a clean-room solution with LiveRamp and Albertsons where advertisers can combine Pinterest data with their first-party data.

All in all, 2022 “was a solid year as we returned to MAU growth, deepened engagement and saw our personalization and relevance investments start to pay off," Ready said.

Pinterest reported Q4 earnings of 29 cents per share, exceeding analysts’ 27-cents-per-share estimate. Revenue grew 4% to $877 million in the quarter, and 9% for the year, to $2.8 million.

But the Q4 revenue gain missed analysts’ expectations, as did its projection of “low single digits” growth in Q1 2023, causing its stock to dip in after-hours trading.