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The third and final part of our series on Pinterest brings us to  the making-money part of the story.

After all, that's what separates a “cool feature” from a business. And by Pinterest's own admission, they're still figuring out their business model. And a sceptical as I am by nature, my response is "so what?"

Twitter looks like a viable social media titan, but does anyone think they've cracked the code on their revenue model? And with just over 20 staff, and 10 million users - with brands now running campaigns on Pinterest, there's a difference between "not having" a model, and waiting to select the right business model.

We've talked about what Pinterest is and why anyone should care, and the amazing copyright judo that's taking place to make the site possible.

So it's come to this: the making-money part, which is what separates a “cool feature” from a business.

By Pinterest's own admission they aren't quite there yet on their business model.

Here's how they say it in their own FAQ:

But Are Business Models All That?

Take a look at Lindt Chocolate's Pin4Autism campaign. It's solid cause marketing in the service of building brand and list power on Pinterest. Last week Elliot Ross posted a great case study of how Toys R Us is driving pinning right from promotional emails.

Does this mean Pinterest has a business model? Not quite. But it's substantiation that real marketing elements are in play.

And let's face it, building a 21 million member network in two years is a pretty good qualifier of demand. Pinterest is currently a 22-person company with a prized demographic, amazing time-on-site measures, a high growth curve, hype among investors, and a better photo interface than Facebook.

Waiting to Pick Their Shot?

So, could you build a good business based on Pinterest's set of givens. Sure, there are copyright issues which have been finessed. Just as Google Adwords did on Adsense. And yes, there is irrational hype. But as many of you pointed in earlier comments, there's a lot of reality to Pinterest.

Perhaps there's s a difference between not having a business model, and waiting to build the right one. Isn't that what early stage funding is for?

There's a discussion over at Quora on all the ways Pinterest could grow revenue.

a) Charging advertisers through branded campaigns, outbound links and traditional ads.
b) Charging ecommerce partners for affiliate links
c) Charging users (virtual goods, printed collections, better tools)
d) Selling user data/analytics

I expect there'll be a raft of "me-too" media sharing networks. (I'm pitching ideas for them already.) This is a great model, expect new competitors.

The next revolution will be image-based.

Just as mobile has driven home the understanding that interactive experiences are way beyond hyperlinks, so is Pinterest a wake-up call that content really is no longer just text on a screen.

I really don't know if Pinterest will be the next great social network or not. Nobody does.

But I sure believe the next big winner will help people wield rich media and graphics. That makes the future more like Pinterest than perhaps anything else.

Our Pinterest for Business: A Best Practice Guide is aimed at companies and individuals who are thinking of joining Pinterest and want to find out more about the social platform, as well as people who are currently using Pinterest and want a deeper understanding of best practice.

Dave Wieneke

Published 15 March, 2012 by Dave Wieneke

Dave Wieneke leads Digital Strategy at ISITE Design, and is a graduate lecturer on Digital Marketing at Northeastern University. He writes on the future of digital marketing at UsefulArts.us and he can be reached through Twitter and LinkedIn

 

22 more posts from this author

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~ben

At the end of the day any company wishing to survive on the internet needs to be making money one way or another, i just hope this doesn't spoil the ethics of Pinterest.

over 4 years ago

Dave Wieneke

Dave Wieneke, Director of Digital Strategy - ISITE Design at www.UsefulArts.us

I think they have a good shot at keeping their vibe. (legal concerns not excluded.)

That's because of the HUGE access to investment they now enjoy. I agree with you they are wise to not rush to sell ads, premium services, or brand pages.

They appear to slip affiliate codes in to links to some product pages, so there is a sly form of direct payment when a buyer arrives from Pinterest.

As I mentioned, I'm actively pitching some similar community concepts -- so whatever the revenue model, they key community pivot points are the same:

1. number of monthly repeats.
2. number of daily repeats (Daily users rock it!)
3. Average revenue per user.

That last one means we have to figure out if revenue is virtual goods, licensing images, buying scrapbooks, seeing ads, or just selling data from all this activity (a la Twitter).

It will be fun to watch Pintrest pick its model. Wherever they don't go will leave gaps for others to build on too.

over 4 years ago

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Kate Dickman

Hi Dave,

Thanks again for the #Pin4Autism mention! In terms of monetizing Pinterest, I feel there could be an opportunity to do targeted sponsored "Pins". Obviously this would most likely be more well-received if in a format that users are traditionally accustomed to seeing (beautiful imagery with value-adding content/products).

They could enable those who are heavy pinners and followers of say, high-end shoes to see a sponsored pin with that interest. The possibilities are endless but it will certainly take a lot more time, investment and overall technology to get it right.

Additionally, they could do a targeted "Who to Follow" feature (similar to Twitter's) and offer a prominent who to follow placement for brands who want to spend a little money.

I think it will be really interesting to see this site grow. It is such a great avenue for particular brands to provide creative value to their consumers; while showing their personalities and overall brand equity. I'm looking forward to watching it evolve both on the brand side, consumer side and from a start-up company side (Pinterest itself).

over 4 years ago

Angela Greenwood

Angela Greenwood, Director of Account Management at Found.

Thanks for posting Dave, it will certainly be interesting to see which monetisation model they run with moving forward. However you've not mentioned Pinterest's previous dabblings in generating revenue via affiliate links with their Skimlinks partnership - this is something I've recently explored along with the issue of affiliate disclosure at http://www.found.co.uk/pinterest-and-the-prickly-issue-of-affiliate-disclosure/

over 4 years ago

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Julian

It is interesting to learn how social networks and companies like this are not mainly focused on money, but at the end of the day, as pointed here previously, any company will need to make money, especially if they gain the attention of the investors. They will be the first who want to recover the investment.

over 4 years ago

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over 4 years ago

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KOJO BONTI AMOAKO

Hi Dave,
Thanks for the posting, i kept wondering what was the revenue stream of Pinterest until i run into your posting. Looking forward in reading more on your postings.

over 4 years ago

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