Pinterest Opens to Third-Party Ads with Amazon as First Partner
For the first time ever, Pinterest is opening its platform to third-party ad demand, starting with a multi-year strategic partnership with Amazon.
User engagement with shoppable content on Pinterest continues to grow, and the platform is hoping to expand this trend further by bringing more brands and products to the platform and connecting users directly to Amazon for purchase.
Additionally, Pinterest hopes the partnership with Amazon will help it scale efforts to connect advertisers with the high-intent consumers that use its platform, something the company has been working on for several years now. “This milestone partnership will add to the great brands already on the platform and provide more comprehensiveness, shoppability and a best-in-class buying experience for users, along with greater performance for brands and advertisers,” said Bill Ready, CEO of Pinterest in a statement. “This aligns with our goal of making every Pin shoppable, so that we can enable as many users as possible to bring their dreams to life.”
More than half of Pinterest users already stay on the platform to shop, Ready shared at Shoptalk in April 2023, and in recent years the platform has been working to monetize that strong user purchase intent without degrading what makes Pinterest special.
“My priority is that my vision for our monetization strategy doesn’t trade off on the user experience in a way that would have any downstream toxic results. It’s literally that simple” said Pinterest’s Chief Revenue Officer Bill Watkins in a recent interview with Retail TouchPoints. “But it first starts with the platform itself, and how you can differentiate it from others. This is a very natural and welcoming environment for retailers and brands based on how people use our platform. We want to be the industry leader and full-funnel solution, and we start and end our day on advertiser value in a platform where all brands are welcome. It allows for everybody to win and not have any of those ugly trade-offs.”
The new partnership will begin its rollout later this year and will be implemented over several quarters. Pinterest’s future may hinge, at least in part, on its success. Despite announcing the new partnership and reporting revenue gains in Q1 2023, Pinterest shares sank on April 26 after the company reported earnings.
The problem, as far as investors are concerned, appears to be that while Pinterest anticipates its growth will continue in line with previous quarters, “we still do not have visibility into an acceleration in demand,” said Pinterest CFO Todd Morgenfeld on the earnings call. Morgenfeld also noted that “the ads market continues to be uncertain given the macroeconomic environment.”