Ladies, let’s face it: we do the majority of our online shopping, even if it’s just ‘window shopping’ or browsing, via Pinterest. We discover new clothes we might not have come across if we were simply looking at the store’s website, and more importantly, we discover new online shops and boutiques that we definitely would have never found by simply browsing – come on, we all know how hard it is to find a new shop online.
Okay, so we use Pinterest to shop. And, well, most of us use Pinterest everyday. So how does the social media site generate any profit? Think about it: it’s not like we’re pinning or buying products created by Pinterest. The things we pin all come either from an individual user or, in most cases, from an external site (like the aforementioned little boutique or shop). Apparently, shortly after the site’s inception, Pinterest claimed that “they weren’t sure about how they make money” but that they wold eventually get to it. Hmm… does this sound extremely fishy to anyone else?
So, in typical Paige fashion, I did a little digging.
According to Forbes, the social media site is valued at a staggering $7.7 billion. Let’s compare that to the other social media juggernauts for a second, shall we? Facebook is valued at $1.26 billion, Twitter claims it is worth $8 billion, and, as the recent news of Facebook purchasing Instagram tells us, Facebook values Instagram at $1 billion.
But, seriously, how is this possible?
From a marketing perspective, it actually might be easy to see how Pinterest is valued at so much and how it generates a profit. Essentially, Pinterest is a gigantic hub for product advertising without pinners really realizing it. Well, that is, as long as its users pin your company’s products. So, one way that Pinterest potentially generates profit is through partnerships with other companies trying to advertise their product. In doing this, Pinterest would then promote the pins of said company to initially get the ball rolling and get the company’s pin travelling through the site at warped speed. Once the first pin is promoted, then users re-pin the product and promote it to their friends, who then, in turn, promote it to their friends, and the beat goes on…
Another way Pinterest could potentially generate profit through partnerships with companies is through promoting a company’s pins in the category sections on the site. This way, the first thing users would see when they click on a specific category would be the promoted pin (without them realizing that it is being promoted, of course).
Additionally, I did some more research and found out that Pinterest generating profit by modifying user-submitted pins by altering the links. I find this extremely interesting because this is something, that, if I would have never researched, I would have had absolutely no clue was being done. Who am I to care that Pinterest is generating money from what I pin from my favorite online boutique? It’s not affecting me in any way, so, personally, it doesn’t really matter to me (in terms of my usability with the site). But, as the article also states, it is a little fishy now that I know about it.
So, there you have it. Even though you probably never thought about it, Pinterest must be generating some sort of profit in order to be running at the high capacity that it does. Even though it technically doesn’t really affect us all that much, it’s still something to think about.