In an effort to increase the number of brands and pertinent items on its site, Pinterest and Amazon today launched a multiyear strategic marketing relationship. According to a blog post published alongside its positive first-quarter results surprise, the new agreement would make the e-commerce behemoth Pinterest its first partner on third-party advertisements.
The collaboration represents a change in strategy for the social networking and image–sharing platform, which has been trying to adapt to consumers’ shifting interests in product discovery in recent years. Pinterest launched its video-first Idea Pins and increased its investment in creator content as the demand for video platforms like TikTok and Reels surged and its picture pinboard started to appear stale.
However, some of these creator initiatives have recently come to an end in anticipation of Pinterest’s last quarter’s revenue miss, for which the company also issued a low first-quarter sales warning that caused its shares to decline.
In contrast, Amazon’s digital ad division performed strongly in the same quarter, increasing by 19% to $11.6 billion.
Click here to read Pinterest’s announcement.
Pinterest lets go of 150 staff in February to save costs
Like other internet firms, Pinterest has struggled with the macroeconomic factors affecting its industry, but it assured customers that it was making efforts to adjust. In a bid to save costs, the corporation also let go of 150 staff in February.
While Pinterest has been trying for years to link product inspiration to purchases, a partnership with Amazon ads may allow for a more seamless shopping experience for customers. The majority of Amazon customers already have their payment information on file with the corporation, making checkout times speedier than they would be on certain e-commerce platforms.
According to Pinterest, visitors who see an Amazon advertisement will be routed straight to Amazon to complete their purchase.
“Pinterest is visited by over 463 million individuals each month who want to build a life they love. In order for Pinners to quickly go from inspiration to action and for marketers to see the benefit in interacting with users who have strong commercial intent, brands and products are a crucial component of this journey, Pinterest said in a blog post. According to the statement, “Our partnership with Amazon will enable us to scale these efforts in significant ways.”
The business added that starting later this year, the installation of the Amazon advertisements integrations will happen over the course of many quarters. Since it may not see a significant impact until next year, Pinterest is not making any short-term revenue forecasts and is unable to yet specify where the ads will appear to end users.
Pinterest beats Q1 sales and earnings expectations
Amazon SVP Paul Kotas continues, “Amazon Ads is thrilled to partner with Pinterest and make it even simpler for customers to discover and buy relevant products through shoppable content, while also providing differentiated value for brands.”
Pinterest outperformed expectations for Q1 sales and earnings, with revenue increasing by 5% year over year to $603 million, above the $598 million forecast, and adjusted EPS coming in at $0.08 instead of $0.02. Globally, there were $463 million more monthly active users in 2017 than in 2016. Additionally, the business disclosed a GAAP net loss of $209 million, or 31 cents per share, compared to a loss of 1 cent per share in the same period last year.
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