Pinterest is trying to distance itself from the Facebooks of the world in an effort to convince advertisers that it deserves a piece of their search advertising budgets.
Over the past few months, the image-bookmarking service has been making the rounds with advertisers trying to persuade them it’s not a social network but rather a place where consumers search for and discover products.
Pinterest is not a place where people come to connect with family and friends, it’s a “catalog of ideas,” says Tim Kendall, the company’s head of monetization. People “go through the catalog and do searches,” he added.
Part of the challenge for Pinterest has been to shake the image that it’s merely a scrapbooking tool where users can save images to “pin boards” based around themes like wedding dresses and dessert recipes, which can then be shared with other users. The company has created a library of
50 billion user-collected pins and according to Pinterest executives it is that trove that sets Pinterest apart from its social networking cousins.
Pinterest’s positioning makes financial sense. While social media has dominated the headlines over the past few years, search advertising has remained the dominant force in the digital ad ecosystem, grabbing the biggest share of marketing dollars.
According to estimates from eMarketer, search ads accounted for over 45% of all digital ad spending in the U.S. in 2014. Advertisers are expected to shell out roughly $26. 5 billion on U.S. search ads this year while ad spending on social media is expected to reach $10.4 billion, the research firm says.
And the social media arena is getting crowded – with giant Facebook looming large alongside Twitter, Snapchat, and a host of other smaller players.
Still, Pinterest’s push for search budgets won’t be easy, ad buyers said. “Pinterest will have to show the same kind of conversion rate that Google search does,” said Sarah Hofstetter, chief executive officer of 360i, a digital ad firm own by Dentsu.
“The mindset is there but the dream has to be realized and that is still a work in progress,” Ms. Hofstetter added. (Conversion rate is the number of visitors who take a desired action on a site after clicking through on an ad.)
Google controls 72.4% of total search ad spending in the US, eMarketer estimates.
Mr. Kendall said it will take some time for advertisers to understand how Pinterest fits into the search picture but added that he is “starting to see search budgets.”
He also noted that the site isn’t solely dependent on one type of ad budget and already pulls dollars from marketer’s display budgets.
Pinterest, which investors have valued at $11 billion in an investment round earlier this year, has significantly ramped up its push for revenues by launching multiple ad products and most recently adding “buyable pins,” which allow users to buy products directly via Pinterest.
ComScore estimates Pinterest had about 76.2 million unique U.S. visitors in July, up 24% from a year ago.
Yoree Koh contributed to this post