The business model is pinteresting...

So how does Pinterest make money?

Pinterest maintains three central tenants to their business: discover, pin and buy (Weidner, 2016). This model encourages users to use the site to shop. This appeals to companies looking to advertise on social media because Pinterest caters to people who want to buy things; it is the very nature of its purpose. Because of this, advertising is a natural facet of Pinterest’s business model. Advertisements appear on Pinterest in the same way as content. It is streamlined, aesthetically pleasing and non intrusive, so people are less likely to notice them as overt advertisements when scrolling through their home page. Advertisements allow people to continue to access “free” content.

Can you spot the ad?

Pinterest has a high valuation and relatively low revenue. According to an article from Business Insider, Pinterest's value was based at 11 billion dollars going into 2016 (O'Reilly, 2016), while their supposed revenue in 2015 was only 100 million dollars, according to an article on Tech Crunch (Roof, 2015). To rectify this, Pinterest has changed the way that users interact with the site by introducing a guided search function and have removed links to third party sites, so people can buy products without ever leaving Pinterest (Weidner, 2016). This is referred to as a “buyable” pin and the slogan is, “if it’s blue you can buy it.” They also recently released “promoted” pins, which allows marketers to pay based on engagement by users.

The 'buy it' button

Works Cited

O'Reilly, L. (2016, January 8). Insiders say what's going on inside $11 billion Pinterest - and it's not all good. Business Insider. Retrieved from http://www.businessinsider.com/pinterest-worth-11-billion-valuation-revenue-grow-5x-2015

Roof, K. (2015, October 16). Leaked Pinterest documents show revenue, growth forecasts. TechCrunch. Retrieved from https://techcrunch.com/2015/10/16/leaked-pinterest-documents-show-revenue-growth-forecasts/


Weidner, J. B. (2016, November 29). How Pinterest makes money. Investopedia. Retrieved from
http://www.investopedia.com/articles/personal-finance/022415/how-pinterest-makes-money.asp