Pinterest's Money Making Plans
Pinterest has a classic Internet problem: It doesn't know how to make money off of its popularity.
Pinterest has a classic Internet problem: It doesn't know how to make money off of its popularity. The twee found Internet items sharing site is a sort of social media phenomenon, engaging members two to three times better than Twitter and more than doubling its traffic since November to 11 million monthly unique visits, according to Comscore data via The Wall Street Journal's Sarah E. Needleman and Pui-Wing Tam. But, there's no solid plan to monetize all that visiting. "We have one hundred ideas but no execution as of yet," Pinterest board member Jeremy Levine told Needleman and Tam. And it's not just the standard social networking traffic to advertising equation. Considering Pinterest's natural connection to online shopping, there's hope for Pinterest yet.
As a visual site that encourages sharing pretty things -- it alludes to both wedding and food porn in its about section -- Pinterest has turned into an organic marketing tool for online shopping destinations. Fellow twee site, Etsy, for example, powers three percent of all pins, found research from RJMetrics via Venture Beat. And store referral traffic has gone up 389 percent from January to December 2011, according to this Monetate infographic. That matches anecdotal evidence from Warbey Parker and The Wedding Chick, who both told Needleman and Tam that Pinterest is pushing people to buy from their sites. "Our traffic converts to sales," Wedding Chicks founder Amy Squires told Needleman and Tam.
Making money off of these relationships, however, is something Pinterest has yet to figure out. It does offer a price display feature, which places retail information of pinned items. It also has a widget, which stores like Bergdorf Goodman have put on product pages right next to Twitter, Facebook and other social networking icons, giving users an easier way to pin its items. All of this increases those buzzy Internet terms like engagement and relationships, things that Pinterest can use to increase its value and hopefully 'monetize' -- another fun Internet money-making term.
But how exactly? While Pinterest's visual layout makes it perfect for showcasing Bergdorf Goodman wares, it doesn't leave much room for advertising space. The site, however, has experimented with affiliate marketing, which reworks links to give Pinterest cuts of any sales driven from pins to certain e-retailers. But that doesn't look like it will turn into the main marketing strategy, the company told Needleman and Tam. Instead, the company has taken a more standard money-making route: Getting as popular as possible and hoping it works out. "My hope is that if we build a service that a lot of people use to plan and discover things, that will be really valuable," explained Levine.