Pinterest, the visual social network where users “pin” images or links to virtual boards, only recently began offering advertising on the site.
Its slowly, slowly approach to revenue generation hasn’t deterred investor interest: Its latest round of funding valued the company at $US11 billion. Now Pinterest has delivered the latest sign that it is likely to start making a boatload of money from advertisers very soon.
On Monday at MIT’s Emtech Digital conference, Pinterest’s head of partnerships Tim Kendall unveiled a new product called “Action Buttons,” TechCrunch reported.
Rumoured for months, soon users will be able to instantly add all the items from a recipe straight to a shopping cart, or add a gadget straight to their Amazon Wish List.
Currently Pinterest offers e-commerce companies “Promoted Pins,” paid-for advertisements which allow marketers to bump up their pins within search results and category feeds. But the company has been talking for the last few months about how it wants to focus this year on making those pins “more useful and more actionable.”
Right now you can click on a pin through to a retailer’s website, but, as TechCrunch’s Josh Constine points out, that’s not useful when you are looking at a recipe that has a long list of ingredients, or if you’re on your mobile phone, having to constantly switch between sites. The idea is that with integration with an online grocery service like FreshDirect or Instacart, you could instantly get the entire recipe you saw on Pinterest delivered to your door.
That’s useful for users and it’s useful for e-commerce companies too. By breaking down the number of steps a customer needs to take between discovering an item and ordering it, retailers are more likely to secure a purchase. And it’s great for Pinterest in terms of attribution: Those e-commerce companies would be able to more easily credit Pinterest for influencing the purchase, thus driving up the price of Pinterest ads.
Pinterest already has a huge influence over its users’ shopping habits. One third of Pinterest users have bought something online or in a store after seeing it on Pinterest, according to data from a Pinterest-commissioned Milward Brown survey.
And its user base has seen more growth than any of the top social networks over the past year, according to a recent survey from Global Web Index.
As Forbes reports, Kendall stressed that the new action buttons are “hypothetical” for now, but such detailed mock-ups suggest that the capability is in place, it’s just the partnerships Pinterest has yet to make official.
But when it does make its official announcement, that will be huge. Pinterest’s already shopping-mad 70 million active users would have an easier way to shop.
Last year Michael Pachter, an analyst at Wedbush Securities, estimated ads on the site could generate as much as $US500 million in 2016. That figure could be reached even sooner, depending on how quickly Pinterest could roll out its action buttons. Pinterest has not revealed its official revenue numbers.
Last month Google confirmed its search ads will soon feature new “buy” buttons. In a note released ahead of the confirmation, analysts at Baird Equity Research said buy buttons would be a huge win for Google: Helping it counter competition from companies like Amazon and Alibaba, improve mobile pricing, and provide Google with valuable transactional data.
That bullish assessment of the value of the buy button could easily be transferred to Pinterest too.
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