What Is Pinterest Business Model And How Pinterest Makes Money?
Pinterest which is one of the social networking platforms was started in the year 2010. It was started by 2 Ex-Google and Ex-Facebook employees named Ben Silbermann and Evan Sharp.
Pinterest is a social app that lets its users to bookmark images that they find around the internet and they can pin them to their boards in their profile. You can find anything that you find interesting, it might be travel photos, animal photos, modeling photos, or just anything!
Pinterest users can share their boards with everyone or with their friends. According to stats, Pinterest has more than a 265Million monthly users. Till now more than 180Billion pins have been created on Pinterest by Pinterest users.
At present, Pinterest has more than 150M monthly users and employees working in Pinterest are more than 1000.
During COVID-19 pandemic, Pinterest’s market share has increased by more than 600%. And by the recent news, Microsoft has been repeatly planning to buy Pinterest!
Pinterest’s initial success story began with the traditional word of mouth marketing which worked pretty well during that time.
For your information, Pinterest is the third-largest referral source of traffic and it generates 400% more revenue per click when comparing with Twitter
How Does Pinterest Make Money
Pinterest has millions of users and it makes money from its users in one simple way i.e through advertising. Pinterest makes money by selling the promoted pins to the advertisers. Advertisers will place their ads on top of the search results of Pinterest.
Advertisers can create their ads in different formats such as Standard, video, shopping, carousal, and collection format.
Pinterest also makes money from its shop category. For example, let’s say someone searches for the item dope tattoos creative on Pinterest and visits the shopping category as shown in the image below.
And when the user clicks on any particular website, he will be redirected to that website and if the user makes a purchase from that site then a certain percentage of commission will be given to Pinterest and this is the one way Pinterest makes money.
Pinterest Business Model
As you already know Pinterest revenue is generated through advertisements. Below are the 4 models of how Pinterest makes money through advertising :
CPM Model
CPM or Cost Per Thousand Impressions is when an Ad that is promoted on Pinterest receives 1000 impressions i.e for every 1000 impressions Pinterest will charge a certain amount of money from advertisers.
CPC Model
CPC or Cost Per Click is when the users click on an ad that is promoted by the advertisers i.e when the users click on any ad the advertisers will be charged.
CPC Model
CPC or Cost Per Action is when a user visits the advertised website and makes a purchase from that website then a certain percentage of commission will be given to Pinterest for the purchase made by that website’s customers.
CPV Model
CPV or Cost Per View is similar to the CPC model. Here in CPV model advisors will be charged based on 1000 view impressions and this is basically for the video ads.
Pinterst’s advertising revenue in the year 2020 was nearly $1400M and it has been increasing year after year.
If you are wondering how popular Pinterest is then check the below image. The Pinterest keyword has more than 9,140K searches per month!
Till now Pinterest has made over 19 funding rounds with a total amount of $1.5B and 43 investors have invested in Pinterest as of now. From its birth, Pinterest has acquired 16 organizations.
Finally
Pinterest which is a photo sharing app is making money majorly through advertsnemts on their platform.
Pinterest may not be as popular as the big social giants such as Facebook or Instagram, but it has some serious potential when it comes to converting users who visit the Pinterest platform!
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