Pinterest’s CEO, Bill Ready, made it clear on Monday (Oct. 30) that the social media platform is prepared to embrace a cookieless future, emphasizing that there’s no need to extensively track users.
This statement reflects a fundamental aspect of Pinterest’s design, wherein users convey their interests through searches and pins.
“As we lean into Pinterest’s unique differentiators as a visual search, discovery, and shopping platform, we’re finding our best product market fit in years,” Ready said in a statement. “Our users are engaging deeply and we’re delivering better results for advertisers through improved measurement and innovation across the full funnel.”
The enthusiasm coincided with Pinterest’s surpassing third-quarter revenue and profit expectations Monday. The platform benefited from a stabilizing digital advertising market, attracting marketers in anticipation of the holiday season.
The company indicated that its efforts to boost eCommerce on the Pinterest app through collaborations with companies like Amazon were proving successful, enhancing the user experience for creating online pinboards.
According to Pinterest’s Investor Day, the early test results from the Amazon ads 3P partnership showed a 50% improvement in relevance on search and a 100% improvement in relevance on related items. The company began leveraging a longer history of users’ on-platform behaviors in its ads models, particularly improving its ability to match ads to user search queries, resulting in improvements in cost per clicks, cost per actions, and ad relevance.
Furthermore, in the last quarter, Pinterest introduced direct links, transferring about 60% of lower funnel revenue to this new feature. The platform is now in the process of expanding it to cover other eligible lower funnel objectives, including CPC video ads and conversion ads, with a target completion date set for the end of Q1 2024.
The company recorded an 88% increase in outbound click-through rates and a 39% reduction in cost per outbound click for CPC objectives from the first users of direct links. Pinterest also broadened its premiere spotlight ad format from search to the home feed.
In addition, several partners, including Adobe Commerce and Salesforce Commerce Cloud, were brought on board to promote the adoption of the API for conversions. Pinterest notes that the API for conversion solution contributed 28% of total revenue as of August 2023, marking a rise from the 14% reported at the close of 2022.
In the third quarter, Pinterest reported that its revenue increased by 11% year over year to $763 million, with global monthly active users (MAUs) growing by 8% year over year, reaching a total of 482 million. The company’s GAAP net income for Q3 was $7 million, and adjusted EBITDA reached $185 million. Total costs and expenses for the quarter amounted to $768 million.