Pinterest surge as a prominent social media commerce site

Close to 4 years, Pinterest is poised to give Facebook a run for its money. Pinterest is an online pinboard where users can organize, share, and explore things they love. With Pinterest, we see a story that is very similar to that of Instagram. It is an industry with tremendous potential, exponential growth of users, big data with remarkably few employees using cloud technology. (Booton, 2014)

Many consumers are sharing life updates of their entire lives online, personal photographs, and more; while it is accepted as norm for everyone to be active on social media, the question is figuring out which networks consumers are using regularly. As Pinterest ushers in an alternative type of social networking via visual discovery technologies, businesses have an unique opportunity to market their brands in a way that's easy and fun to consume. (Tseng,2014)
 

What makes Pinterest a potential game changer is its ability to lure in users with the propensity to buy. Young couples planning a wedding, for example, might be more willing to click on an advertisement to a local florist, while a user pinning about home remodeling or gadgets might be an obvious target for Home Depot (HD) or Lowe’s (LOW).  

A retail-driven wish list such as Pinterest incubates that type of consumer behavior, potentially helping an advertiser to not just reach a large pool of consumers but also increase the chances of higher click-through rates and revenue per visit through efficient information gathering.

The pinboard is well aware of this competitive advantage and is investing in the tools necessary to capitalize on emerging visual technologies. It has bought startup, VisualGraph, a technology service that can “see” a picture, feasibly learning a person’s preferences based on their pinning habits.

Pinterest even plans to have one of VisualGraph's co-founders lead a new visual discovery team to better understand about the trends of  “what people are pinning.” Demand for visual advertising technology has soared among the likes of Pinterest, Yahoo and Facebook in recent years, and Pinterest is betting that startups like VisualGraph will help it offer distinct competitive targeting options that uniquely utilize its pin boards.  

After all, certain industries such as travel, retail, automotive and home improvement, tend to spend more on online ads and they also prominently figure  among the top 10 boards created by Pinterest users.

With respect to user retention, no one can deny that Pinterest is doing more than a few things right: with a reported 70 million users as of July 2012, the platform is esteemed to be one of the top destinations for product discovery. According to a report from Monetate, 20% of total social referrals to commerce sites originate from Pinterest. Statistics show that shoppers who are referred to a site from Pinterest are 10% more likely to make a purchase; and Pinterest referrals spend 70% more on average than visitors from non-social channels. While the numbers seem to be very exciting, it is important for businesses to have a consumer marketing strategy, knowing when to post at certain times, so that your Pinterest strategy delivers real returns for your business.

Cloud computing technologies have enabled Pinterest to be very efficient and cost effective enabling it to grow the site quite dramatically while maintaining a very small team. The advantages Pinterest is leveraging: (1) elastic capacity; (2) quick and global deployment; (3) No CapEx, no initial spend; (4) Pay as you go, for what you use; and (5) Automation and Reuse. (2012 p. cloudblueprint)

Pinterest is expanding its first major ad offering, Promoted Pins, to all businesses in hopes of generating revenue  from small and medium size businesses. Pinterest first rolled out  promoted pins to paid advertisers in May, testing the program with a dozen large advertisers. (Wagner, 2014)

Pinterest also announced a new expanded analytics tool intended to provide better feedback on how company ads are performing. The analytics dashboard, which is rolling out slowly to all business accounts on Pinterest, includes data about impressions, clicks and repins for company content.The hope is that businesses will identify which of their pins are doing well, and decide to put ad money behind that pin in order to boost their products and services and enhancing their  reach on the platform.

Today Pinterest announced a much needed web analytics tool,  allowing businesses to monitor and analyze their Pinterest activity  in terms of repins, reach and click throughs. This comes soon after a $200 million investment round, sparking more rumors that Pinterest will soon begin to monetize the site. (Mistry, 2013)

Pinterest's analytical model to monitor business activity

 

Data from online sharing serice shareaholic showed that Pinterest beat Twitter, StumbleUpon, Bing, and Google in referral traffic. Furthermore, Pinterest users don’t just click over to e-commerce sites to ogle merchandise–they are 10 percent more likely to make a purchase than people who come over from other  networks  according to data from e-commerce platform Shopify. (Shu, 2013)

One of the digital marketing advantages of Pinterest is the fact that all links on the site are trackable by Google and other major search engines. On a pin, the from link, the image link, and even the description link (if you insert one) are all tracked by Google, passing data  back to your site. This is too good an opportunity for SEO pros to pass up, and link spam on Pinterest will pick up significantly in the next few weeks. Pinterest will likely have to change links to no-follow, or risk SEO spammers dragging down the aesthetic quality of the user experience.

The most likely reason that Pinterest as we know it today will disappear is that it’s simply too ripe for acquisition. Google could buy Pinterest to add pins and repins as a social signal for photos, serving as a major destination storage  for images and adding an entire new layer of relevancy to Google images search results. It would be a tidy add-on feature  to Google Plus as well, and give it a meaningful advantage over Facebook. Twitter could buy Pinterest and make boards and pins part of users’ profile page, taking today’s uninteresting ”Recent Images” to an exciting new place.

Groupon could get into the game, using what you’ve liked and pinned as a relational database to improve the relevancy of deals you’re offered.

Certainly, in the interest of possessing a revolutionary new social commerce front-end, Pinterest would be attractive to Amazon, and probably eBay as well. Even Wal-Mart – which has quietly been getting very serious about social - would be an interesting and viable candidate. (Baer, 2013)

Increase Traffic To Your E-Commerce Website With Pinterest

Works Cited

Baer, Jay 5 Reasons Pinterest is Addicting and 4 Weaknesses That May Kill it [Online] // convinceandconver.com. - 2013. - http://www.convinceandconvert.com/social-media-tools/5-reasons-pinterest-works-and-the-4-weaknesses-that-may-kill-it/.

Booton, Jennifer Can Pinterest Challenge Facebook's Advertising Reign? [Online] // foxbusiness.com. - Jan 28, 2014. - http://www.foxbusiness.com/technology/2014/01/28/can-pinterest-challenge-facebook-advertising-reign/.

cloud-in the corner syndrome [Online] // cloudblueprint.wordpress.com. - april 9, 2012. - http://cloudblueprint.wordpress.com/.

Hoff, Todd Pinterest Architecture Update [Online] // highscalability.com. - may 21, 2012. - http://highscalability.com/blog/2012/5/21/pinterest-architecture-update-18-million-visitors-10x-growth.html.

Mistry, Deepa Pinterest Reveals Web Analytics Dashboard [Online] // oursocialtimes.com. - march 12, 2013. - http://oursocialtimes.com/pinterest-reveals-web-analytics-dashboard/.

Shu, Catherine Pinterest Launches New Data Analytic Tool For Businesses As It Prepares To Monetize [Online] // techcrunch.com. - march 11, 2013. - http://techcrunch.com/2013/03/11/pinterest-launches-new-data-analytic-tool-for-businesses-as-it-prepares-to-monetize/.

Tseng, Emma How to Optimize Your Pinterest Presence for Real Returns [Online] // blog.gigya.com. - may 2014. - http://blog.gigya.com/how-to-optimize-your-pinterest-presence-for-real-returns/.

Wagner, Kurt Pinterest Joins Facebook, Twitter in Battle for Small Business Advertisers [Online] // mashable.com. - june 5, 2014. - http://mashable.com/2014/06/05/pinterest-promoted-pins-expansion/.

Chad, Samantha, Vimala