What Happened: There are really only two stats people need to know about Pinterest: The three-year-old social medium is second only to Facebook in referral traffic, and it has 10 times the number of monthly users now than it had two years ago.
Admittedly, it has no revenue to speak of, and its business plan might be categorized as not totally baked. But the channel, known best to shoppers looking for deals and discoveries, definitely has momentum. Recently, it received a significant new round of funding for $225 million from its usual group of investors led by Fidelity Investments, which brought its valuation up to an impressive $3.8 billion. Its last round took place in May 2012 when Japanese e-commerce firm Rakuten, which didn’t participate this time, invested $100 million, according to TechCrunch. Back then, which isn’t that long ago, Pinterest was valued at a mere $1.5 billion.
What makes Pinterest so enticing is the audience of shoppers ready to buy or share it attracts and its reliance on images to makes connections. Unlike the self-promotion of other sites — “Here’s what I just said or wrote” or “Here’s what I just did” — Pinterest is more of a how-to dress better, eat smarter, save more or spend less channel. “We hope to be a service that everyone uses to inspire their future,” CEO Ben Silbermann said in a statement. Everybody loves aspirational.
The social channel plans to use the money to expand internationally (where they are already seeing impressive growth), improve its mobile service and infrastructure in general and develop ways to monetize the service.
What This Means for Brands: In general, the big consumer brands have already discovered Pinterest, but this shows it’s time for stragglers in B2C and even B2B to catch up.
One thing that should make certain brands particularly interested is Pinterest’s demographics. The channel boasts a specific demographic: 80 percent women and almost 50 percent have children.
Pinterest also lets brands experiment. For instance, Nordstrom took items that were being pinned the most online and physically tagged them in the stores with Pinterest flags.
And it’s not just for pushing physical product. Hello, a new oral care line, celebrates great design as well, so the startup has a board dedicated to product and packaging design called Products We Love, which helps solidify what the brand stands for.
What Pinterest’s success makes clear: Social campaigns increasingly have to be driven by compelling insights that are aspirational and then implemented using creative ways to visually illustrate them. The question to consider down the road is when will we reach social overload. Every week one can talk about yet another channel with momentum and a rising valuation. How many sites can people sustain, and when they winnow, which will be the first to go? Will this eventually be 2000 and the crash and burn of website mania?
Contributing to TRENDING this week are Lucy Arnold, Jenna Carter, Sarah Gordon, Lisa Helfer, MaryFrances Hicks and Abby Ray. Edited by Pat Wechsler.