Dive Brief:
- Pinterest's revenue jumped 76% year-on-year to $706 million in the fourth quarter, bolstered by new advertising offerings and an expansion of shopping capabilities, according to the company's latest earnings report.
- A longer holiday period drove up advertiser demand, executives said on a call with investors discussing the results, with retailers showing the strongest growth. Pinterest pointed to Lego and Nespresso as two brands that successfully leveraged its platform to capitalize on the season.
- Pinterest plans to continue to invest in shopping, augmented reality and automation, while "significantly" scaling up its sales teams to court more advertisers, executives said. The Q4 results demonstrate how the platform has keyed into major consumer trends driven by the pandemic.
Dive Insight:
Pinterest's strong upward trajectory continued in Q4, with the longer holiday period an important proving ground for its bets on commerce. The number of advertisers using shopping ads grew by six times over the period as brands — particularly in retail — shifted more dollars online and attempted to tie gift-giving inspiration efforts to sales.
"We see shopping as this bridge between the two halves of our mission, inspiration and action," Ben Silbermann, chief executive at Pinterest, said during the Q&A portion of the call with investors. "For pinners, we've made progress by expanding the number of surfaces to let them shop."
Pinterest now features several methods of conducting transactions, including through Lens, a visual search tool that added commerce functionalities last June, and Pinterest boards, where users can collect images and ideas in one place. Opening more outlets for shopping came as the amount of product searches went up around 20 times over the course of 2020, per Silbermann. The number of active brand catalogs on the site also increased over 60% from Q3 to Q4, the executive said.
Healthy gains were reflected in audience growth. Pinterest saw global monthly active users up 37% year-over-year to 459 million in Q4. The company notched over 100 million new monthly active users globally last year, more than ever before. Executives indicated that Pinterest is attracting users who are in search of escapism they can't find elsewhere online.
"People need a place to dream and be optimistic, away from politics and bad news," Silbermann said.
Looking ahead to the first quarter, Pinterest will focus on emerging formats like video, including through dynamic offerings such as how-to tutorials. The company in September introduced Story Pins, its iteration on the video- and image-collage format that is now ubiquitous across social media. Silbermann said that helping creators monetize stories is a priority, and that Pinterest plans to invest in sponsored story patents.
Pinterest at the same time is trying to broaden its tent of advertisers. Automation is one area in the spotlight as the platform aims to offer campaigns that are both budget-friendly and easy to scale. Last month, the site introduced a performance-driven ad format that lets marketers automate the process of building personalized creative targeted at specific audiences.
Social media companies have generally posted strong performance during the pandemic as more people flock online to stay connected and entertained. Snapchat, which also reported earnings Thursday, saw revenue up 62% year-over-year to $911 million in Q4. New bets from the video-sharing app, like a TikTok competitor called Spotlight, contributed to the momentum.
