Pinterest Partners with Google to Boost Ad Revenue
Pinterest has announced a new ad deal with Google as the company aims to ramp up its ad revenue. Google is now the social platform’s third-party ad partner, following an earlier multiyear deal with Amazon.
The Google partnership was discussed during Pinterest’s earnings call for Q4 2023, where the company posted results below analyst expectations. While revenue for the period reached $981 million with a 12% year-on-year growth, monthly active users jumped to 498 million, representing an 11% year-on-year growth.
Pinterest’s stock initially dipped by nearly 28% due to below-expectation revenue. However, the stock recovered after CEO Bill Ready announced the Google deal. According to Ready, the company has already started rolling out the new ad integration and is seeing positive results.
During the earnings call, Ready noted that while 80% of Pinterest users are outside the U.S., they only contribute 20% to the company’s revenue. The Google partnership aims to increase the average revenue per user in international markets.
Leveraging AI and New Features to Grow Userbase and Engagement
Ready also discussed Pinterest’s efforts to leverage AI and new features to build up the user base and engagement. The company recently rolled out the collage feature, which allows users to create new images using stickers and objects. The majority of these collages include shoppable product pins.
Additionally, Pinterest launched an auto-organizing feature that recognizes similar pins and encourages users to create boards. As a result, the company saw a 30% increase in boards created on the platform.
Ready also highlighted the use of generative AI-based search guides to help users refine their queries and find what they are looking for more quickly. Furthermore, Pinterest has been experimenting with incorporating body type ranges in search to make results more inclusive.
Analyst comment
Positive news: Pinterest partners with Google to boost ad revenue.
As an analyst, I predict that the market will see an increase in Pinterest’s ad revenue and average revenue per user in international markets due to the partnership with Google. This will likely lead to positive growth for the company and may positively impact its stock performance. Additionally, leveraging AI and introducing new features to enhance user engagement and expand the user base will further contribute to the company’s growth.
