This post originally appeared at American Express Open Forum.
The Pinterest-craze is growing.
The newest hot commodity in the tech world is now the fastest-growing referral site with 260 million unique visitors monthly, according to a recent study. It currently drives more referral traffic than YouTube, Reddit, Google+ and LinkedIn.
Referrals increased from 2.5 per cent in December to 3.6 per cent in January, according to the content-sharing company Shareaholic.
How Pinterest will generate revenue in the future is unclear. After $37.5 million in total funding, perhaps even Pinterest isn’t sure about its revenue-generating path. But it is creating a sense of exclusivity.
The gathering site is currently invite-only, yet its growth has surged through the online world. Exclusivity has proved successful for high-end stores, restaurants and anticipated nightclub openings in the brick-and-mortar world.
Eventually, the company can generate revenue in many ways. It can advertise, as long as it strategically does so in a way that wouldn’t affect the user’s experience. It could go the e-commerce route, where it would make money from each transaction that comes from the site. Revenue-generating ideas are virtually endless.
But it actually makes sense that Pinterest doesn’t have a business plan at ths point. The company needed to first learn about its users, what their interests are, what they like to “pin,” what sites they’re visiting, what they’re uploading and sharing. And this is how the company will eventually make money.
“We become so obsessed that we fail to fully realise that our self-expression is subsequently being catalogued, repackaged and sold to the highest bidder—if a company has reached that stage in its growth,” writes Alexia Tsotsis at TechCrunch. “For a chance at reaching the top of that pyramid, hell, maybe it’s worth it.”
The majority of Pinterest’s users are 24- to 44-year-old females from the Midwest, according to ComScore. In fact, Midwesterners are 102 per cent more likely to visit the site than the average U.S. Internet user.
“To get to the bottom of what motivates Pinterest’s throngs of users, you first have to realise who those users are,” writes Brad McCart. “I challenge you to go to Twitter, search for Pinterest and see who’s using it. No, not who’s writing about it, but who’s actually using it. The vast majority? Female.
“At the risk of sounding sexist, we have to examine the traditional habits of females versus males. To that end, women tend to like to shop more than men do. You could easily define Pinterest as a way for people to ‘window shop’ for anything that interests them, whether that’s a physical object or something as intangible as quotes.
“They can then show off their ‘purchases’ (pins) to their friends, and even re-pin and create discussions around what they’ve found.”
When Pinterest launched in March 2010, little was known about it and now people are using it to plan weddings and bridal showers and redecorate their entire homes all based on a “pinning” obsession.
Whatever its business model is or isn’t, it’s working.
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