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Pinterest seems like it should be one of the great social media success stories of recent years.

It’s got 70m users, 80% of whom are female and 35% of which use Pinterest on their mobiles.

A demographic skewed towards women with decent incomes: an advertiser’s dream...surely…?

The platform also features half a million business accounts and attracts 2.5 bn page views a month. A recent round of investment valued it at $3.8bn.

And the revenue of this dream site?

£0. Yes, that’s $0 if you’re from Wyoming. (Or €0 if you live in Rome.) 

Social media, in its most organic state, draws a lot of strength from discovery, as a filter, curated by like-minded people. Many people use Twitter in this way, as a news aggregator.

And Pinterest offers the same neatly segmented library, whether you want to view anything from patterned blinds to paella recipes. And all wrapped in an eye-catching user-friendly visual experience.

The social web is full of startups that win gold for facilitating discovery or appreciation, but come last when it comes to generating a sustainable business model.

Take Spotify (valued at $3bn and made a $78m loss in 2012) or Tumblr (acquired by Yahoo, made $13m in revenue but had $25m in operational costs in 2012).

Yelp and Fab.com are two more, Twitter too to some extent although the commercial imperatives are kicking in.(There’s a great breakdown here from Time magazine with more examples). 

Social media’s raison d’etre has always revolved around community, connection and discovery. Do these principles, and consumer behaviours and expectations in social spaces, automatically need to be at odds with commercialism?

Newsfeed ads on Facebook were, and probably remain, unpopular, but they’re still there. And the share price has done relatively well lately.

Some of the purists hold firm to a utopian social mantra, like Pinterest CEO Ben Silbermann who said in September

Nobody’s paying for anything yet. We want to see how things go and, more than anything, hear what you think. 

I wonder what he’ll say when his earn-out is linked to share price after Pinterest is acquired? I don’t think purist social media principles need to be uncommercial by nature.

Ultimately, every audience will be prepared to put up with some commercial messaging, if it is thoughtfully implemented and doesn’t significantly impair the site’s appeal or user experience.

So how do you achieve this?  The first step has to be to ask the audience.

Steve Richards

Published 27 November, 2013 by Steve Richards

Steve Richards is MD of social media agency Yomego and a contributor to Econsultancy.

31 more posts from this author

Comments (4)

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Perry Bernard

Hi Steve, while I'm not exactly part of the 'typical' audience, I do think Pinterest could support some sort of commercial advertising, but it needs to be relatively unobtrusive and subtle - which somewhat opposes the aims and goals of most advertisers by being bold and blatantly visible. This medium seems to me to be one where invasion of ads could potentially damage its appeal. The large representation of women on the site might indicate Pinterest's followers are after a more 'relaxing', 'inspiring', or 'creative' content? These are features I think would attract some many more women than men.

over 2 years ago

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Net dep so trong long ha noi

I like printest. I using it and very happy with pritest. ^^

over 2 years ago

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Buyapowa

Great post. Most of the social networks offer opportunities for social marketing, which will influence sales, but they are not (yet) being used as truly transactional channels. Likes are nice but companies need real ROI – real sales. When we look at estimating how much business we can get from pins, fans, Likes or Shares, we are still estimating the ROI of a marketing campaign.

We should think of ways of turning social into a transactional channel, generating real, direct sales without alienating the nature of social.

Think about businesses using social to ask their customers what products they would like to see as offers and allow the offer to increase in value as more people participate; and customers using social sharing tools to invite their friends to sign up for the offer, so they all get a better deal. They purchase, the company gains new customers and customers become loyal to the brand.
Here is where we can realize the full potential of social channels to generate results for the company. And marketers can help by selecting channels that cover the purchasing journey from beginning to end: from search, recommendations, and the current promotions to actual transactions.

The first step is, indeed, asking.

over 2 years ago

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Simon Guest

The common misconception is that advertising on social platforms needs to follow the same format as offline i.e. here's a MPU with persuasive reason to buy my product or service communicated in an impactful way. When in fact advertising on social should be a means of signposting users to commercially generated content that is relevant and engaging to the target audience.

It all flows back to good content marketing and creating 'stuff' that people are genuinely interested in and will feel compelled to share. They don't mind if the source of content is a brand, in fact they will embrace the brand for catering to their needs and making a genuine effort to engage with them. A transaction may not occur straight away but the seed is planted and a preference for that brand is created which will lead to sales further down the line.

over 2 years ago

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