Is Pinterest Being Cut Out of Its Profit Potential?

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With nearly 70 million unique visitors, Pinterest is a good place for brands to be.

But the company has struggled to prove that its $5 billion valuation is accurate. Without attracting advertising and growing advertising income, Pinterest may have trouble sticking around long-term despite its popularity.

What are “Pinfluencers?” Media buyers found out very quickly that they can “cut out the middle man” and go directly to “Pinfluencers” for more exposure. Major brands like Tommy Hilfiger, VH1 and Benjamin Moore are interested in Pinterest traffic – but these companies aren’t using the native advertising platform. Instead of buying ads through the promoted pins system, they are going directly to “Pinfluencers” – popular pinners who can spread the word quickly.

Pinfluencers are often bloggers who have a large network of pinners that they’ve connected with. In exchange for compensation, these Pinterest influencers post pins related to the company’s product. The approach is effective for advertisers, but it leaves Pinterest out of the loop financially.

For example, Sean Ryan, J.C. Penney director of social and mobile marketing, stated in a recent Wall Street Journal article that initial advertising purchases from Pinterest had lackluster results compared to reaching out to Pinfluencers directly.

“We often see twice the lift in engagement on a product when we use an influencer on Pinterest,” he said. Staples, Clinique and Nordstrom are among the long list of brands that have connected with Pinfluencers directly or through HelloSociety, a start up that creates and manages Pinfluencer advertising campaigns.

Pinterest isn’t overly-concerned. However, Joanne Bradford, head of partnerships for Pinterest, isn’t too concerned. She stated that she believes that Pinterest can develop its potential as an advertising platform even while brands are reaching directly to Pinfluencers. Bradford cited YouTube as an example of success in this arena, and promised that Pinterest will be rolling out new ad products and targeted ad options during 2015.

 

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