Pinterest’s $11 Billion Bet: Visuals Driving Billion Dollar Valuations
A little while ago, Yo made waves as the platform of simplicity, raising $1.5 million in funding at a $10 million valuation. It harkened back to the early days of social media that began with text. Some suggested it was an inflection point of how people wanted to communicate – faster and more simply. But the truth is, it wasn’t. People don’t want to tell simpler stories. They want to tell personal and complex stories simply, and the best way to do that is through visual content. This is why Yo fizzled and SnapChat skyrocketed. This is why purely saving impersonal product photos on Pinterest-competitor sites hasn’t taken off as much as sharing the beautiful and inspirational photos of real bloggers and fellow Pinners.
Vikram Bhaskaran, Strategic Partnerships at Pinterest, gave his perspective on the value of authentic experience and natural discovery during Chute’s Visual Revolution Summit:
Discovery on Pinterest happens at scale. There are more than 65M users and 75% are on mobile devices. But Pins are not just images – they are the start of a discovery experience. The half-life of a Pin is much longer. Pins are viral and are repinned on a longer time-scale.
All major social platforms, aside from Yo, have evolved over the past decade to include photos, videos and multimedia, resulting in increased engagement and expanding user bases. The established social platforms that have gone public have progressively made moves towards more photo- and video-centric solutions, exemplified by Facebook’s acquisition of Instagram and Twitter’s recent acquisition of Periscope–and subsequent restriction of Meerkat’s access to their social graph. The threat and potential of new visual technologies in the social space is paramount. It’s no surprise then, that the private social media companies with the largest valuations, Snapchat at $15 billion and now Pinterest at $11 billion, are focused on engagement solely through visuals – because they provide engaging, interactive experiences for consumers while enabling more effective and authentic experiences for brands.
One of the prime verticals benefiting from visual social marketing is retail. Pinterest is the most obvious monetizable social media property in history. The entire thing is built on consumers’ purchase intent! Yes, Pinterest alienated some of their audience by disabling referral links, but, to me, that means they are taking more steps to control monetization on the platform. There will be other ways for influencers to make money. Pinterest influencers, or “Pinfluencers,” have established credibility within the community and are often compensated by brands looking to get their messages out to consumers via technology solutions like HelloSociety. In such instances, Pinterest doesn’t get paid. Whether it’s referral links or sponsored content, Pinterest doesn’t want to be left in the cold when it comes to generating revenue on its own platform.
Bhaskaran also talked about Pinterest’s relationship with brands and publishers:
Brands and publishers are at the heart of Pinterest. People are there to engage in your content and your brand. Three things you can do to put Pinterest to work for your brand:
- Create inspired content that encourages fans and customers to pin from your domain, blog and apps
- Create an engaging presence on Pinterest
- Promote your content on promoted pins
Figuring out ways to monetize parts of their business with brands and publishers will ultimately drive revenue and validate Pinterest’s huge valuation. In addition to Bhaskaran’s tips, more developed offerings for advertisers and brands, such as Pinterest’s animated pins, will be key to their success on the Pinterest platform – and key to Pinterest’s competitiveness in the social media marketplace.
Are there other startups in the social space you predict will join the billion dollar valuation club in 2015? My bet is any company in the running will be leveraging photos and videos in a big way.