Source: Flickr user Public Domain Photos
Everyone’s favorite “it” startup, Pinterest, got a slap on the wrist last week for sneakily snagging affiliate fees from users’ links. But there is no mistaking the social curation site’s growth and momentum. Will Pinterest be a fad that flashes and burns, as Turntable.fm shows signs of doing, or will it end up a midsize link sharer like Digg or Reddit? It is worth examining Pinterest’s growth, usage, influence and money-making potential for startup lessons and marketing opportunities.
According to comScore, Pinterest reached the 10 million monthly user mark faster than any other U.S. site. And that is while it remains an invitation-only affair. The average Pinterest user spends more time with the site (80 minutes per month, says comScore) than other social media like Twitter, LinkedIn and Google+ (each under 25 minutes), although it is no Facebook (7 hours).
Pinterest’s audience is a little concentrated — on a desirable young female demographic — but I wouldn’t call it a niche. It is well beyond the early adopter, Silicon Valley crowd that still dominates Quora. Of course, Pinterest faces the risk of faddishness, but it has at least a little guaranteed user lock-in. It takes a long time to kill a photo site, as Flickr’s survival in the face of Facebook demonstrates. But users may deem a group of collected images less valuable than personal photos.
Smart tech implementations
Social curation is a real phenomenon, but not everyone wants to curate. Pinterest enables easy off-site sharing with a simple browser plug-in, even before it has established a Facebook- or Twitter-like “pin this” distribution network. No doubt over time Pinterest will display Pareto principle–style 80/20 distribution of viewer to sharer. But Pinterest encourages passive usage with friend- and topic-following at a user’s first experience along with regular reinforcement.
Pinterest has been smart in how it uses Facebook. Its Facebook log-in and app uses Open Graph auto-sharing features to juice demand for invitations. Yet pinning images into “boards” helps encourage Pinterest usage on its own site rather than just within the Facebook news feed. There is some talk of Pinterest APIs, but the company hasn’t articulated what you could call a platform strategy yet. Still, Pinterest has demonstrated wise tech moves that will gain it a bigger audience, induce usage and exploit Facebook.
Rating Pinterest’s influence
Pinterest’s highly visual layout has already inspired imitators like Lady Gaga’s social networking site, also invitation only. But reports of Pinterest’s influence in driving traffic to other websites are based on a fairly dubious study from a referral tracker with medium-size reach. That said, anecdotal evidence from sites like Time Inc.’s Real Simple magazine suggests that Pinterest could play a big role. Media companies and retailers are rapidly building out their presence on Pinterest. The Wall Street Journal is using the site for its Fashion Week coverage, and Pinterest has caught the eye of the New York Times, possibly at the expense of a Facebook app from the Times.
What about revenues? Right now Pinterest doesn’t show advertising or charge companies to camp out on its site. And it also does not give them an efficient vehicle for finding or promoting that presence. Pinterest uses Skimlinks to insert itself in the path of affiliate deals. It attracted some criticism for not telling its users it was doing so, but most users won’t miss the potential pennies they might collect from retailers. In contrast, that might actually add up in the aggregate for Pinterest. It is unproven so far, but with scale those fees might prove a quicker social commerce payoff than Facebook stores or dedicated shopping communities like Kaboodle, without Pinterest’s having to do the hard work of a real retailer like the similarly visual Fab.
I will disagree with Forrester interactive marketing analyst Darika Ahrens, who says marketers should ignore Pinterest in 2012. On the contrary, they should get on board quickly, before Pinterest starts charging for company pages. The company may never do so — neither Facebook nor Google do — but I wouldn’t be surprised if it is considering it. It should charge media companies and build out paid pages for brands. Because although you might think its visual displays would be extremely brand-advertiser-friendly, those advertisers may shy away without guaranteed placement and safety from potential copyright violations. They would be more comfortable paying for their own space, especially if Pinterest would spend some of its $27 million in funding on audience analysis services.
Though Pinterest hasn’t talked much publicly, its actions reveal a smart startup with staying power. Its growth is working across a broad audience, and its tech choices enhance that growth. And Pinterest is starting to show some power in driving traffic to other sites. A little emphasis on marketing support could add dollars alongside its affiliate revenues.