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How Does Pinterest Work? The Sneak Peak Behind The Business Model Of Pinterest!

3195 Views | 7 min | October 11, 2019
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In this piece of article, I am going to share some secrets behind how does Pinterest work and makes money. So, those who are looking to know the secret stick around.

Pinterest, the name has acquired a specific and special place among the social media network today. With over 100 million active users, the platform has managed to acquire a value of $11 billion. Now, I know most of you must be thinking, how? 

Well! Sit back and relax, soon, I am going to reveal all the secrets behind the Pinterest business. Here in this piece of article, you will find the detailed business model of Pinterest. So, stick with us to find out how does Pinterest works and how it makes money. 

Before moving right into the business model, let’s talk a little bit more about Pinterest, starting from what is Pinterest. 

What is Pinterest? 

What-is-Pinterest
PC – Smart Social

Pinterest is one of the star players in today’s social media network. Besides being one of the fastest-growing social media channels, it is one of the most unique platforms of all. This platform allows the users to save and/or share pictures and content of their interest. Not sounding so different right now, right? What’s unique here is that it shares the pictures and content in the form of pins. What is a pin exactly? The pin is actually a visual bookmark. Like any other bookmark, this pin also redirects the user to the website it is linked to. 

The only catch here is that one cannot target any specific group while pinning the interests. Since its introduction in the market million of users has pinned down billions of pictures and content including the products, architecture, clothing, tutorials, etc. 

Clearly, the platform has influenced people with a variety of interests. Now, the question is how does Pinterest work? To get the answer to this question scroll down. 

Pinterest | The Secrets Explored!  

It is no news that Pinterest has become an integral part of the social media network today. But what and how does this business work is something that I am going to discuss here. I have been really curious to share the Pinterest business model with all the readers. And finally, here it is.   

In this article, you will find that I have broken down the Pinterest value preposition to make you better understand how it works. 

So, let’s begin the journey to understand how Pinterest works? 

The Key Players In Pinterest Business Model | How Does Pinterest Work Explained!

A Pinterest platform like all other social media channels has a set of valuable customers. Who are they? They include – Pinners & Advertisers. 

Let’s discuss both these key players one by one to understand how does Pinterest work.

  • Pinner, Who are them & how are they valuable to the Pinterest business model? 

Below is the statement that Pinterest mentioned in its financial prospectus. 

“Pinterest is where more than 250 million people around the world go to get inspiration for their lives. They come to discover ideas for just about anything you can imagine: daily activities like cooking dinner or deciding what to wear, major commitments like remodeling a house or training for a marathon, ongoing passions like fly fishing or fashion and milestone events like planning a wedding or a dream vacation.”

These people that use this platform to share content are called “Pinners”. The entire experience of a pinner revolves around the concept of sharing visual recommendations “Pins”. These visual recommendations, “pins” are contextualized, organized, and customized on the basis of interests within the boards. 

For pinners, the platform is free. In fact, it won’t be wrong to say that the entire Pinterest business model is designed with Pinners in the center. It is very simple to understand why this is so. Its because if there is no user base on the platform there won’t be any advertising and further no revenue. This is why this segment of the business model is critically taken care of by Pinterest.

Now, coming to Advertisers. Who are they and how they are involved in the Pinterest business model? 

  • Advertisers: They are the core of the Pinterest revenue model. Pinterest earns through advertisements and if they are not there, there is no revenue.
Pinterest-business-model-canvas

The Three Core Principles | Understanding How Does Pinterest Work!

Pinterest has claimed that there are three core principles on which they operate their business. These principles are – Transparency, Accountability, and Enforcement. 

  • Transparency – They have clearly specified privacy as well as terms of use of the service maintaining transparency. 
  • Accountability – When it comes to applying laws & regulations, they take it very seriously. 
  • Enforcement – They play really strict when it comes to content on the platform and take down the ones that don’t comply with their terms. 

Also, check out Instagram’s Business Model For Your Next Big Business Idea.

The Quadi Element Structure Of Pinterest Business Model

Before we discuss more about how does Pinterest work, I would like to share with you the basic elements of Pinterest.

The basic elements contributing to this business model are – Pins, Pinboards, Buyable Pins, and Promoted Pins. 

Let’s discuss each of these elements one by one. 

1.Pins

Pins, this is the core component of Pinterest’s business model. The reason is very simple, everything in the platform revolves around it. The basic definition of Pinterest is to catalog, save and share these pins. We have described a little about pins before. So, by now you must be aware of the basic concept of Pins. 

These pins can be saved with the browser extension or simply through uploading the pictures of the official website of Pinterest. 

2.PinBoards

This element or feature allows the user to group similar pins under one single pinboard. For instance let’s say if you have shared multiple pins on travel inspiration, with the help of a pinboard you can group them together. There are two options included in the business model that is – Private & Public Pinboards. 

The concept behind private and public pinboards is quite clear. 

3.Buyable Pins

Just like Facebook, Pinterest has also included the option of the “Buy it” button. This button lets the users buy the product or service directly without even visiting the website of the seller. This model doesn’t charge anything from both the buyer as well as the seller. The purpose of introducing this feature in the business model was with the complete intention of increasing the user experience. 

Note: This feature of buyable pins is only available to the merchants who use BigCommerce, Salesforce, or Shopify. The reason, however, is not clear yet.  

4.Promoted Pins

promoted-pins-pinterest

Promotions are the only and huge source of monetization of Pinterest. The concept of promoted pins is nothing but advertisements. In simple words, it is the paid content that is featured as sponsors on the platform. These promoted pins are camouflaged are usually highlighted among the usual pins. 

Pinterest Value Proposition Broken Down 

Now that you know about the key set of customers of Pinterest, it is equally important for the business to keep both the segments happy. The Pinterest business model has found a perfect way to balance these segments out. In this section you will not only find out how does Pinterest work but also understand how it manages to keep a balance between the two key customers.  Let’s dive into more details. Below, I have broken down the value proposition of both the segments. 

1.Pinners & Their Value Proposition in the Pinterest Business Model

There are 4 key elements that decide the value proposition of the Pinners in the business model of Pinterest. Unlike all other platforms like Facebook, Google etc, Pinterest does not use massive algorithms (like Facebook), web crawlers (like Google). In fact, Pinterest is simply and dedicatedly based on the visual experience as well as human content creation. 

Below, you will get a better understanding of what I have mentioned above. 

  • Visual Experience – We have already discovered that Pinterest is not like other social media channels. Unlike all other platforms, Pinterest dedicatedly focuses on visual discovery and search. Don’t mistake Pinterest to be only the visual content platform. In fact, it also has a core human curation & personalization feature that helps it stand out in the market. 
  • Personalization & Human Curation – As mentioned above in the statement of Pinterest in the financial prospectus, Pins are being handpicked, organized and saved by millions of users of the years. Clearly, this is not something that is accumulated through indexing or crawling.
  • Empowered Environment – Pinterest has mentioned how they believe that the platforms empower its users. This is because like all other social media platforms it does not leverage the fear of people’s anxiety. In fact, it operates with the goal of inspiring them. 
  • The Action Is Here – Besides providing the visual experience, the platform also has the feature that provides the user with the power to take action. 

2.Advertisers & Their Value Proposition

Advertisements are the major source of revenue in the Pinterest business model. To sustain the monetization strategy of the platform, it becomes crucial to pay attention to the advertiser’s value proposition.  The three factors in the value proposition of the advertisers are – 

  • Empowering Environment
  • The Discovery Process
  • Valuable Set of Audience

In the present Pinterest business model, they have dedicated the entire sales funnel to the advertisers that are right from awareness to conversion. But now, what are the benefits that this business model holds for the advertisers. These benefits include – Brand awareness, Increased Web Traffic, Generating Leads or sales.

How Does Pinterest Work? 

pinterest-business-model
credit – Pinterest

In this section, we are going to discuss in detail how does Pinterest work and what exactly made it so popular. The major focus of Pinterest is towards the Pinners, the users creating the pins and handpicked content. The majority of the pins are cataloged, shared, and saved over Pinterest is carried out by the users themselves. All those pins are then matched with billion of boards to generate the Pinterest taste graph. 

Pinterest Taste Graph | Understanding The Concept

Let’s dig a little more to get a better understanding of how does Pinterest work? When a user saves a pin let’s say an image of Machu Picchu, it might initially get saved by the pinner to one of his boars say “Bucket list”. But once it is saved, the pin will be available as well as discoverable to thousands of the users that have access to the image to save it or share it. 

Pinterest Discovery Engine Explained

Now that you have understood the basics behind the Pinterest business model, let’s discuss the Pinterest discovery mechanism. There are 4 key areas in the mechanism – 

  • Home Feed 
  • Searches
  • Related Searches
  • Visual Searches 

All these features availed to the user helps them to refine their search results on Pinterest. Not only this, but it also allows Pinterest to anticipate what a user is looking for and makes it easier for advertisers to attract the attention of the users. 

How Pinterest Makes Money? 

Similar to what Facebook does, Pinterest also makes money by providing the advertisement platform to the advertisers. Being in media there are a few crucial metrics that they have in their revenue model – 

  • MAUs Monthly Active Users | These are the logged-in users on Pinterest who either visit the website or open the mobile app at least once in the last 30 days ending on the date of reporting.
  • ARPU (Average Revenue per user) | This metric is designed to track how much revenue is generated per user that in turn tells one how good is Pinterest in monetizing its user base. 

These are the two basic metrics that drive the revenue model of Pinterest. Because of these two strengthening factors, advertisers are attracted to the platform.

This is the complete business and revenue model of Pinterest. Pinterest has been labeled as one of the fastest-growing social media platforms in the market. I hope that you 

Conclusion 

By far I have shared with you the answers to what is Pinterest, how does Pinterest work, and how does Pinterest makes money. There is no doubt that Pinterest is one of the leading social media channels today. The Pinterest business model has introduced several new opportunities for people who are looking for a new app and business ideas.  In case you are one among them who are looking for an opportunity to create an app like Pinterest, you should check out with the experts in the field. All you have to do is Contact Us

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