Pinterest Stock

Pinterest, Inc. (Pinterest) operates as a visual search and discovery platform, positioned at the intersection of search, social, and commerce.

The company offers a unique and differentiated experience that enables people to go from inspiration to action all on one consumer internet property. The company’s primary service, Pinterest, can be accessed through the company’s mobile application or the web.

People use Pinterest to find useful, relevant ideas—and then bring them to life. People don’t always have the words to describe what they’re looking for, but often know it when they see it. As they browse Pinterest content (called ‘Pins’), they fine-tune their tastes and find the perfect idea. Users interact with the platform in dynamic multi-session journeys to find inspiration, curate their latest look, plan their next project and shop from great brands. This happens at a massive scale, with billions of searches and saves per month.

All of this allows the company to use intent-based signals to show relevant and engaging content to the company’s users. This inspiration-to-action journey maps clearly to the advertiser marketing funnel and helps brands to reach customers at every point in their discovery-to-purchase journey through digital ads. Users and advertisers intentionally choose Pinterest because of the company’s efforts to create a positive and more brand safe environment. As a result, the company makes deliberate decisions through its policies and product development and intends to deliver on that experience, creating value for advertisers who can showcase their product and services in an inspiring and positive environment.

Users and Platform

498 million monthly active users from around the world come to Pinterest to find new ideas, curate and refine their tastes, and turn those ideas into reality. The company’s platform particularly resonates with women, who comprise roughly two-thirds of the company’s total user base. In addition, the company’s platform resonates with the younger generation, as Gen Z users represent over 40% of the company’s user base. Geographically, the company have a diverse user set, representing over 100 countries globally.

Content on Pinterest comes from a variety of sources, including retailers, brands, creators, publishers and users. The company acquires that content via a wide range of methods, including product catalog uploads, direct publishing, and user curation. Content formats include images that allow to click into an idea to learn more, videos that provide the steps of an idea, and products that brands and merchants upload from catalogs.

On Pinterest, users interact with several surfaces, each of which offers distinct functionalities and experiences. Users often move between these surfaces various times in a single session, and across multiple sessions. Saving content and creating boards are highly unique and beneficial to the company’s ecosystem, as the company utilizes the signals from the curation to help serve users even more relevant content recommendations.

Home Feed: When users open the Pinterest mobile application or navigate to www.pinterest.com, they are by default in their Home Feed, where they can discover Pins relevant to their tastes and interests in a scrolling format. As users interact with more content - through searching, saving, and curating - their Home Feed is designed to become even more representative of their interests.

Search Page: On the Search surface, users find Pins they are looking for by typing a query in the search bar. The search functionality allows users to see many relevant possibilities that are personalized for their individual taste and interests. Users often come to Pinterest with a vague idea of what they’re looking for, and use the company’s visual search functionality to narrow their focus. As such, over 90% of the company’s searches are unbranded.

Related Pins: Visual discovery on Pinterest also happens when a user taps on a Pin to learn more about an idea or image, and a feed of visually similar Pins is served beneath the tapped image. These related Pins help users springboard off a point of inspiration to explore deeper into an interest or narrow in on the perfect product. The company’s related pins surface is powered by its recommendation models that use computer vision designed to identify products in the Pin, and show other relevant organic or ads content that the user might find valuable to their inspiration to action journey.

Boards: Users save and organize Pins onto virtual ‘boards’. Boards often are labeled with topical categories like ‘Hawaiian vacation’, ‘spring outfits’, or ‘living room furniture’; and are a collection of Pins that help users organize the vast amount of visual content that they interact with on the platform.

Flywheel

The company’s users often come to the platform to get inspiration for many of life’s moments, which can lead to discovering new products and brands. As a result, commercial content from brands, retailers and advertisers is central to Pinterest. In-market consumers on Pinterest tend to be early in their journey toward a purchase decision and do not yet know exactly what they want to purchase. Accordingly, they are open to discovering new products and brands on Pinterest rather than merely navigating to brands they already know, as is common on traditional search engines and e-commerce platforms. This creates a unique flywheel where relevant ads can not only enhance the user experience, but also drive more value for advertisers in the form of increased views, clicks, and conversions.

Advertising System

Ad Formats

The company has a number of advertising products to help advertisers meet users across the full funnel, from upper funnel brand advertising to lower funnel performance advertising. Many of the company’s ad formats can be leveraged by advertisers across upper and lower funnel objectives. Additionally, many of these formats are enabled with mobile deep links and/or direct link capabilities for a seamless, one-click handoff from ad to merchant product page.

Standard ad: A static image used to showcase content in a simple vertical image format.

Video ad: Used by advertisers to capture attention and tell a story with a visually engaging format.

Shopping ad: Used by advertisers who wish to promote specific products in their catalogs to reach users who are deciding what to buy.

Carousel ad: Multiple static images or videos in one carousel, used by advertisers to showcase more than one image or video at a time.

Collection ad: Used by advertisers to display products in action with a hybrid format that mixes lifestyle imagery and video with featured products.

Interactive ad: Used by advertisers to engage with their users through interactive formats.

Ad Auction

The vast majority of the company’s advertisers buy ads through an auction-based system. The company’s ad auction allows it to serve ads to users at relevant moments while optimizing business outcomes for advertisers.

The company offers ads across both upper and lower funnel. Upper funnel ‘brand’ revenue is billed when an advertiser optimizes an ad campaign around ‘brand’ objectives like impressions (‘CPM’) or video views (‘CPV’). Lower funnel revenue is billed when an advertiser optimizes an ad campaign around ‘performance’ objectives like clicks (‘CPC’), actions (‘CPA’) or conversion events (‘oCPM’) such as a checkout or add-to-cart.

The company’s auction system selects the best ad for each available ad impression, based on the likelihood of a desired action occurring and how much that action is worth to advertisers. The likelihood of the action occurring depends on a variety of factors, such as ad relevance and creative quality.

Campaign Management

Advertisers can set up campaigns, track results and improve performance over time through the company’s Ads Manager or the Pinterest API. Advertisers can also buy the company’s Premiere Spotlight ad format directly through a Pinterest relationship manager on a cost per day (‘CPD’) basis. To help maximize performance, advertisers can target specific groups of users based on interests, demographics and search keywords. The company is continuing to make significant investments in AI to automate its ads platform. As of the year-ended December 31, 2023, the vast majority of the company’s revenue flowed through its AI-enabled automated bidding tool.

Measurement

Measuring the effectiveness of digital ad spend is a high priority for the company’s advertisers. The company’s first-party measurement solutions leverage tools like APIs and clean rooms, which are designed to help advertisers recognize the value of an investment on its platform across a variety of objectives. The company also has tools to help advertisers understand its contribution and drivers to conversion, and incremental impact. Advertisers can leverage the company’s leading third-party measurement partners to validate Pinterest’s performance individually and across channels. Additionally, the company’s API is integrated with other third -party partners to help increase adoption of the company’s measurement tools.

Sales and Marketing

Go-To-Market Approach

The company has advertisers across multiple verticals, including retail, consumer packaged goods, travel, financial services, and auto. The company serves these advertisers in customized ways depending on their size, sophistication and objectives across the full funnel. The majority of the company’s advertisers utilize its Ads Manager platform to initiate and manage their campaigns. The company also has a global sales force presence in 14 countries who work directly with advertisers and ad agencies to provide additional support through the campaign management cycle. In some geographies, the company works with other third-parties to support its sales efforts.

Marketing

The company has historically grown its global user base with relatively low marketing costs given the strength of the company’s global brand, the utility of the company’s service and unpaid traffic from search engines. The company also uses paid marketing to grow and retain its user base, build brand awareness, and attract advertisers through business marketing and scaled education tools for optimizing campaigns on the company’s platform.

Intellectual Property

As of December 31, 2023, the company had over 400 issued patents and pending patent applications in the United States and foreign countries relating to aspects of the company’s actual or contemplated operations and technologies. The company also had over 660 registered trademarks and trademark applications in the United States and foreign countries, including the company’s ‘Pinterest’ name and related logos.

Government Regulation

The company relies on a variety of statutory and common-law frameworks and defenses relevant to the content available on the company’s service, including the Digital Millennium Copyright Act (‘DMCA’), the Communications Decency Act (‘CDA’) and the fair-use doctrine in the United States, and the Electronic Commerce Directive in the European Union.

The company is therefore subject to the U.S. federal, state, local and foreign laws and regulations regarding data privacy and the collection, storage, sharing, use, processing, disclosure and protection of personal information and other data from users, employees or business partners, including the General Data Protection Regulation (‘GDPR’) and the California Consumer Privacy Act (‘CCPA’), including the California Privacy Rights Act (‘CPRA’) and other state laws that may take effect in 2024.

Seasonality

The company has historically experienced seasonality in user growth, engagement and monetization on the company’s platform. Historically, the company has had lower engagement in the second calendar quarter (year ended December 2023) and industry advertising spend tends to be strongest in the fourth quarter. In 2022, the company started to return to typical seasonal trends.

Competition

The company competes with large, established companies and companies that offer widely used products, such as Amazon, Meta (including Facebook and Instagram), Google (including YouTube), Snap, TikTok and X.

History

The company was incorporated in Delaware in 2008. It was formerly known as Cold Brew Labs Inc. and changed its name to Pinterest, Inc. in 2012.