Pinterest – a new social media. Playing with the big guys

Pinterest. The waiting game. It pays to be big. Numbers matter. Pin-it to Win-it.

Pinterest is a free website, that requires registration to use, and acts as a way to search the internet and save content, as pins on their boards, on a personalized media platform.

Pinterest does not generate its own content, but takes information from other websites and compiles it via images in one place that can be easily searched and categorized. You can also send this content to other individuals, both current users of Pinterest and non-users, via e-mail. Pinterest users can follow friends, or others that they think have similar tastes – by following individuals or a specific board.

Users of Pinterest help to organize the website and categorize its search function, as well as generate more content. One of the most followed boards is called ‘Popular,’ which compiles all the information that users ‘re-pinned’ the most in one board.


The network effect

Pinterest needed a direct network effect to help build up its user base. The more users it had, the more content that was generated, the more attractive the platform was to new users

A network effect also led to increased awareness. Other content websites feel the pressure to add Pinterest as part of their social media sharing link icons link, right next to facebook and twitter. This acted as endorsement, legitimizing the website, as well as creating an easy button to add new content (the bread and butter) to the platform.

Like most platforms, Pinterest had a bias to a particular demographic. Pinterest’s following consists of about 70% women, although this varies by country. Having a strong skew to a particular demographic is actually a powerful tool for a platform that relies on networks. The content was more tailored to these individuals, and helped to drive an increased user base due to heightened relevance.



Pinterest was active for over 5 years before it monetized. It did not need to. It has millions of followers, and was one of the fastest growing social media sites in the world. In 2007, Pinterest raised $37 million. In 2012, comScore reported that the site had 11.7 million unique users in the USA alone, and was the fastest site to ever break through the 10 million unique visitors. In 2013, Pinterest had 70 million users worldwide.

Finally, in 2014, the site finally began to monetize. Through the use of selling data to marketers, based on the information it collected from users and their interaction with the site, and allowing companies to create boards to promote their content. Later in the year companies could create pins to help advertise their products.

The waiting game paid off. When Pinterest did finally start to monetize, they were adding more value to their paying subscribers than other social media sites. In one case study of a fashion website, users visiting from Pinterest spent $180 compared to $85 spent from users coming from Facebook. There are more studies that also reveal that Pinterest is more effective at driving sales than other forms of social media.



In May 2015, Fortune Magazine listed Pinterest in the 8th position on its Unicorn List, which ranks startups that have a valuation exceeding $1 billion. In June 2015, Pinterest added the “Buy” button to its mobile app. Michael Pachter, an analyst at Wedbush Securities, estimated that Pinterest could generate as much as $500 million in 2016 through paid advertisement.


Uncertain future

Time will tell if this social media platform can keep their user base engaged, but its strategy of free sign ups, sticking with a specific user demographic, and gradually adding in monetization tools once the site had reached almost 100 million users world wide, seems to have paid off.





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Student comments on Pinterest – a new social media. Playing with the big guys

  1. I’m not surprised to hear that Pinterest is so much more profitable to advertisers than Facebook because most content on Pinterest is explicitly items to be purchased, creating a direct value link. Is Pinterest’s platform unique enough to survive a full-on assault by Facebook? If Facebook were to offer pinning ability, would they not ultimately win out by having a larger current installed base?

  2. Thanks for this interesting blog! I think Caribou makes an interesting point. I used to use Pinterest a lot but have recently found myself relying more on Instagram to search for images and inspirations.

    One factor that makes me confident Pinterest will continue its wave of success is that the content they already have built up creates values for users, it is not as important as for a platform like Twitter or Facebook to keep producing new content because drawing inspiration from images can be a timeless task (i.e., if I want to see ideas for a wedding shower, I don’t just want the latest and greatest but instead the most relevant to my taste).

  3. It makes sense that Pinterest could generate more revenue for merchants than Facebook, as Pinterest users also seem to be highly motivated in seeking out certain products and objects, often using Pinterest as a source of ideas and inspiration; conversely, Facebook is certainly foremost a social networking platform which also features a lucrative platform for reaching out to users–though often, in a less targeted way.

    I am not an avid Pinterest user, but even so I often find myself landing on the site when searching for make-up tutorials or ideas for birthday party themes. Once I land there through search, however, I find myself going down a rabbit hole of pages.

    I do find it interesting that 70% of its users are women–probably also an impact from network effect, whereby friends are likely to share relevant content with friends of certain demographics. With a proliferation of pages that skew female in content perception or target audience, it’s no wonder why the figure sticks so high toward female. I’d be curious to learn about why the platform skews so heavily toward women (especially in the US), and for those countries in which it is more evenly weighted, what the causes and draws are that build a high network of male user skew.

  4. I agree with the previous posts in why it makes a lot of sense that the ad revenue is so high; it’s a very interested case study to essentially track what people are shopping for – even if they never even have to buy anything from the site. I wonder if Pinterest could somehow integrate with brick and mortar stores, and create an even more relevant set of data. I wonder if Pinterest data could also be used to predict fashion trends, or inspire creativity based upon what people are searching.

    Good write-up.

  5. Good write-up. One thing I’m worried about is the degree that Pinterest users multihome. Mostly I’m concerned that while Pinterest has a substantial user base, most users may not be all that engaged and could ultimately abandon Pinterest as Facebook and other social networks that users use more frequently continue to build out their offerings.

  6. Frump, I’m pretty sure that Pinterest already is working closely with retailers. I definitely get “suggested for you” boards which are often company-owned, with things ready for me to buy. Companies also hold contests on pinterest, to get people to do the advertising for them. The idea of predicting trends sounds intriguing; I know that Google was trying to predict fashion trends a while ago (and is probably better suited because while a specific post on pinterest may trend, it may be hard to really find similar ones, whereas searches are more cut-and-dried).

  7. Great post. I think the fact that you bring up the “buy it” button is fantastic. What’s different about Pinterest as opposed to other social media (like Instagram or Facebook), is that its content is linked to the native hosting website, as opposed to being embedded within the post or linking to a business profile. Which probably makes it much better for advertisers to have a direct channel to their merchandise (as you noted above). I didn’t actually know that they had implemented the “buy it” button, but it seems to be set up well since the content is so directly connected to its window in Pinterest.

  8. It’s fascinating to see that Pinterest like so many others pursued the monetization after a long time in operations and was focusing on users. I have good hopes for Pinterest continuing to do well as I see them as differentiated enough from other social platforms but perhaps see integration coming up as a topic… It would be interesting to look at the cumulative picture of revenues and profits across a special application type – I wouldn’t be surprised if on the whole, money was lost, and there was one or two firms being able to make money… it really looks like an environment where the customer would be the #1 winner.

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