Pinterest, the image-based social network, continues its meteoric rise with a further $367m fundraising round, valuing the company at $11bn. This type of prospective valuation of a company which is yet to generate significant revenues or profits is now the norm within the tech industry as investors bet on the ability of the social network to pull the trigger on its advertising platform and convert the 30 billion pins on its 750 million boards into a cash-generating, data-rich marketing offering.
Key to the success of Pinterest’s monetisation efforts, and the unique potential advantage that Pinterest holds, is the development of sophisticated, intent-based marketing.
Advertising on social media today
Brands advertising on Facebook can target their adverts in a fairly traditional manner against certain audiences based on a variety of factors such as demographics, location, interests and behaviours. However, although Facebook holds a large amount of profile information on consumers, allowing them to relatively accurately place each consumer into an appropriate audience, these profiles are generally relatively static. If a consumer is male, aged 16-35 and likes football according to their Facebook profile, this will be the case whether this profile is accessed today, tomorrow or next year. Only very limited further information is available relating to then-current intent of such consumer. For example, Facebook may know that the consumer is a fan of a certain football team but will not know whether the consumer has purchased the current home shirt of such team or not.
Twitter advertising, by way of promoted tweets, operates on both a “similar following” and keyword basis, allowing advertisers to target consumers because they are “similar” to (but not necessarily exactly the same as) the followers of the advertiser’s main competitors or on the basis of keywords featured within a user’s tweets. Targeting is therefore relatively unsophisticated and does not offer any further context-based advertising techniques.
Currently, advertising on Pinterest is sold on a category basis with companies being able to promote specific pins within 30 pre-defined broad categories made available by Pinterest. Although this may be effective for certain campaigns, it certainly does not compete with the pinpoint targeting available on other social networks. The big advantage which Pinterest does hold is the image-based nature of its platform which lends itself very well to native advertising which does not disrupt the end-user experience. A promoted pin will be identified as such but will not act to interrupt nor interfere with the broader user interface. A user can chose to interact with a promoted pin if they so wish but will not be forced nor actively pushed to do so.
The future: measuring intent
The key differentation between Pinterest and other social networks is that the pinboards established by users are actively themed for a particular interest, in effect creating user-curated collections which represent an intent on the part of the user (for example, a particular purchase decision).
What’s an “intent” when it comes to advertising?
An “intent” describes the reasoning behind a consumer’s activity. Traditionally, keyword advertising would react to particular words or phrases and deliver associated advertising. However, it was unable to look behind the words to understand why such keywords were of interest to the consumer. This led to inefficient advertising where apparently keyword-relevant advertising was not in fact relevant to the consumer. For example, the consumer may search for the word “flowers” in February. Search engines and other keyword-based advertising technologies would be likely to serve advertising which relates to Valentine’s Day flower deliveries. However, were the consumer to search for and pin “flowers” on Pinterest but into a pinboard titled “Wedding Ideas”, the wider context would give Pinterest the advantage of being able to serve advertising relating to wedding flowers or other wedding-related items; the “wedding” being the intent behind the consumer activity. The collation of themed content by the consumer in effect results in the consumer directly telling Pinterest their current interests (and also likely near-future purchases) – information which is gold dust to advertising brands.
Dynamic vs static profiles
An additional element of intent is the creation of dynamic profiles where a user can swiftly move between interests, behaviours and target audiences. As mentioned above, Facebook can extract a large amount of demographic data from the consumer’s profile. However, this information is largely static and generic and will remain constant over time (a user liking football, using the example above). However, when considering intent, the same user can move between different audience segments based upon their near-future purchasing intent.
For example, a user may be currently in the process of moving house. Static profiling would not identify that this was the case – the user would be targeted according to their usual demographic information. Keyword-based searches may also be ambiguous as to the reasoning behind the searches – the user may simply be searching for a new sofa in insolation and hence only sofa-related advertising would be shown to the user. Intent-based profiling may, however, note that the user has started a pinboard headed “New House” and has pinned a large number of items of furniture. In this case, the dynamic profile established by the intent-based profiling methodology would deliver advertising relevant in a wider context to a new house purchase (new sofas, new beds, new curtains etc.) but only for the period of time during which such intent remains valid (if no new content is pinned to the board for a period of 2 months, for example, the intent may be considered to have lapsed).
Other social media platforms
Other social platforms such as Facebook and Twitter also benefit from being able to understand a consumer’s wider intent to a certain extent, however the content generated by users on a platform such as Facebook or Twitter are not curated in the same way as Pinterest and are not collated into themes by the consumer. The work in understanding intent is therefore much more difficult for these platforms than for Pinterest and as yet the value of intent has not been unlocked by either Facebook or Twitter.
Pinterest leading the way?
Although the value of intent-based marketing is clear to advertisers, Pinterest is yet to act on the competitive advantage it holds in these categories. However it is very early days for Pinterest advertising (it only removed the “beta” tags in January this year) and the noises coming from Pinterest itself indicate that these features will soon be fully accessible to advertisers.
In the words of Joanne Bradford, Pinterest’s Head of Partnerships:
“The thing is, Pinterest allows a brand to be who they are — it’s not just about re-targeting. It’s about being where (people) are doing those things, like planning a trip, redoing your house, rebuilding a motor cycle. We think we’ve got real intent and signal to help a marketer.”
It remains to be seen whether Pinterest can convert the expectations of its investors into real advertising dollars but we here at ADTEKR believe that it has all the tools it needs at its disposal and are confident that Pinterest can successfully compete in this space as a revenue-generating, profitable social media platform.