Social's Next Evolution? Pinterest Begins to Monetize Users' Searches
Head of Global Sales
Pinterest users conduct 2 billion searches every month to find things to buy or do. Now the company is starting to monetize that activity. In June 2016, Pinterest said it would start actively selling search advertising for the first time. Jon Kaplan, head of global sales at Pinterest and a former Google executive, spoke to eMarketer’s Debra Aho Williamson about why search is an important part of Pinterest and how big search can be as a part of Pinterest’s revenue.
eMarketer: Pinterest is typically considered a social platform, but search is an important activity there, too. Why is that?
Jon Kaplan: People use this platform in a very different way than they use other platforms that are considered “social.” What Google did for information retrieval we’re trying to do for discovery of new ideas. Pinterest is a personalized catalog of ideas that allow you to discover and do things that you love—everything from what do I want to make for dinner to what do I want my house to look like, or what do I want my wedding to look like or where do I want to travel.
With that comes a lot of commercial intent that aligns much more with search, in the sense that people are in discovery mode just like they are [when searching online], but they’re don’t have fully formed decisions or fully formed answers.
“The visual nature of Pinterest search is really different. Also, Pinterest search happens at the earliest stages of the person’s decision-making process.”
eMarketer: How is Pinterest search different from other types of search?
Kaplan: The visual nature of Pinterest search is really different. Also, Pinterest search happens at the earliest stages of the person’s decision-making process. We see search activity in a number of categories well before search activity happens on traditional search engines. People may ultimately convert on Google or other places, but we hope we can be a place where the initial discovery of ideas can happen.
eMarketer: Why does Pinterest want to target search advertisers?
Kaplan: We had never cordoned off the search inventory as buyable inventory before. We also had never talked to a search engine marketing agency or search engine marketers as clients. We have over 2 billion searches a month, which is growing fast, so we have an opportunity to go build the formats, the infrastructure and the targeting to be able to capture this opportunity that exists in search.
eMarketer: What does search advertising on Pinterest look like now, and how might it evolve?
Kaplan: Right now it is exactly the same as what you see in the home feed, which is that it’s a promoted pin. But going forward one way it will be different is the targeting. We don’t do keyword targeting in search today. So if somebody searches for a couch, Crate & Barrel can’t surface their ads specifically in search related to that query. We haven’t built the infrastructure of keyword-based buying, so that’s one innovation that will happen.
“Search revenue could be a really significant part of our business. It’s about half of the activity on the platform.”
The other innovation that we will invest more time and effort into is ad formats that make sense for search. I think a good example is the product-listing ads from Google—they feel like something that should live very comfortably on our platform as well, given the visual nature of Pinterest and given the fact that we have relationships with merchants who are giving us a feed of their products [so they can use Pinterest’s Buyable Pins feature].
eMarketer: How much of Pinterest’s future revenue might come from search advertising?
Kaplan: I think search revenue could be a really significant part of our business. It’s about half of the activity on the platform.
I know the monetization engine that is Google, and I know a little bit about how well they monetize particular queries, and I can see very clearly that we’re not monetizing today at anywhere near that rate, because we haven’t put an infrastructure in place.
eMarketer: How are marketers evolving their thinking about using paid search and social advertising together?
Kaplan: I think about search as explicit intent, while the signals that people are using in social are more about implicit intent.
When you have somebody who is explicitly in the market for your products and services in search, that’s a different mindset. People don’t come to social networks with commercial intent—they don’t come there to shop for auto insurance.
There are interesting things starting to happen in the intersection of those two types of buying. Audience-based buying on search is [the] next evolution. If somebody interacted with your ads on YouTube or Facebook or Instagram [for example], you can put them into a category of people who are in market for your product because they’ve displayed some interest.
“If somebody interacted with your ads on YouTube or Facebook or Instagram, you can put them into a category of people who are in market for your product because they’ve displayed some interest.”
Then, when they come to a search engine, you can market to those people differently than the normal customer who comes to a search engine.
eMarketer: Can you provide an example?
Kaplan: Imagine if you are State Farm and you had a current auto insurance customer and you wanted to cross-sell them homeowners insurance. You could target your existing auto insurance customers anytime they search for homeowners insurance. That’s very powerful. I think we’ll have the opportunity to do some of those same things on Pinterest—to overlay audiences onto our search product to get marketers to an even more finite audience.
eMarketer: How much of a challenge do the social properties (as well as Pinterest) present to the search engines—companies like Google and Microsoft? What do they need to be concerned about?
Kaplan: Hopefully, they won’t be concerned about us at all. We’re just the engine that could. The visual nature of our platform is something totally unique, and I think the timing and the mindset that people come to this platform with is different. It’s not a competitive threat to Google or Microsoft. It’s just different. I think it’s actually more complementary than anything else.