Pinterest may have a growing ad business, but because it’s still relatively quiet, buyers say it’s possible to land better rates for more impressions this year compared with last year when there was less competition to drive up prices.
Visit Florida, the marketing body for the state, has run five campaigns so far this year and is already seeing the benefits of less competition for impressions. The CPMs for two of those campaigns cost 34 percent less than they had been last year but were still able to secure 129 million additional impressions, said the advertiser’s vp of brand Staci Mellman.
“Having a decrease in CPMs while getting more impressions is a win-win for us,” said Mellman. “We’ve increased our social budget over the last two years so the investment in Pinterest is coming from that as well as share shift from other social platforms like Twitter and traditional ones like print.”
CPMs dropped 20.6 percent between the fourth quarter of 2017 and the first quarter of 2018, according to a study of over 19 billion impressions conducted between the second quarter in 2015 and the third quarter of 2018 by Brand Networks. “If there was ever a time to invest in the Pinterest marketplace, it’s the first quarter when things are quieter and the CPMs are less,” said E.J. Freni, chief revenue officer at Brand Networks.
It’s a different story for the rest of the year.
Visit Florida is among a stream of non-endemic advertisers pouring into the platform and subsequently creating more competition that’s pushing up prices. The aggregate average CPM on Pinterest across all advertisers buying ads through 4C Insights was $3.67 in the fourth quarter of 2018. That was up on the $3.30 CPM in the third quarter, $3.11 in the second quarter and $3.20 in the first quarter.
Mellman, however, still sees Pinterest as a cheaper alternative to other online players that are by no means less effective.
Compared to other online media owners, Pinterest delivers competitively. A CPM on Facebook sits at between £2 ($2.62) and £3 ($3.94) depending on the vertical, whereas a CPM on Pinterest is around £1.50 ($1.97), said a media buyer on condition of anonymity due to concerns over jeopardizing future deals with both platforms. Average engagement rate is around 5-8 percent depending on the business vertical and creative on Pinterest, said the executive, who has seen conversation rates as high as 2-3 percent for direct response ads.
The numbers aren’t too far off what 4C Insights has seen for recent campaigns. The aggregate average click-through rate was 1 percent in the fourth quarter, up from 0.62 percent in the third quarter, 0.48 percent in the second and 0.46 percent in the first.
“Pinterest is no longer seen as a platform that’s specific to females between 25 and 54 years old,” said Freni. “There’s a breadth and depth of audience there that advertisers are starting to wake up to. It’s no longer a test-and-learn media buy for many of the advertisers we’re working with.”
While some of the price fluctuations can be explained by the growing popularity of Pinterest as a whole, the platform’s maturing ad business has taken strides over the last year to attract more media budgets to the platform. Pinterest generated $700 million in ad revenues in 2018, up 50 percent from the previous year, per eMarketer. A similar growth spurt is predicted this year, with Pinterest set to smash past $1 billion the same year it goes public, forecasted eMarketer. In comparison, Snapchat earned around $825 million in 2017, its first year as a public company.
As big as its ad business is, Pinterest is not as widely used outside of certain verticals. That’s been changing since last year when executives from the company began pitching it as a place people go to look for inspiration rather than the feeling of aspiration Pinterest pages were originally meant to evoke. “It’s becoming clearer to advertisers that Pinterest is becoming the go-to planning and discovery platform for many people,” said Freni. It was a subtle tweak to Pinterest’s pitch that piqued the interest of the likes of Visit Florida to a platform that has traditionally been the domain of retail and CPG.
“Brands should be active on the platform now to take advantage of the best rates and, more importantly, learn what creative and calls to action will resonate with Pinners,” said Aaron Goldman, chief marketing officer at 4C Insights. “Armed with the knowledge about different campaign variables, brands can continue to bid higher as CPMs rise if they’re able to improve click-and-conversion rates commensurately.
As more impressions have become available — total Pinterest impressions served through Brand Networks jumped by more than 200 percent between 2016 and 2018, for example — advertisers have reassessed Pinterest’s role on media platforms after seeing that it can be effective across the funnel. Last summer, for example, it launched a larger video format which Adidas tested at the time and saw a 12..6 percent lift in ad awareness, per a Millward Brown study cited at the launch. Direct response, on the other hand, is set to play a larger role post-IPO for the business as evidenced by its decision to open its buyable ‘Shop the Look’ pins to all businesses last September.
“We have seen great success with Pinterest ads in reaching users at both top and lower funnel stages in our marketing campaigns,” said Maria Bain, planning director at iCrossing. Pinterest’s video and static ads were used for one of the agency’s travel clients as always-on elements in a media plan, driving “huge” volumes of “highly engaged” traffic to the client’s site as well as generated high volumes of engagement on Pinterest, said Bain.