In a social media market whose doors seem to be closing, the four year-old Pinterest has managed to succeed where many others — from Path to Google — have failed. Now, the company, which raised another $200 million this spring, is faced with an equally daunting challenge: building a business.
In May, Pinterest launched its first paid advertising campaigns, working with Kraft, Gap and handful of other large brands to introduce a new promoted pin product. Two months later, the scrapbooking site rolled out a self-service advertising product in hopes of luring the hundreds of thousands of designers, boutique retailers and other small businesses away from Google and Facebook to spend on its site.
The company, which exploded on to the scene in 2010, has just started to tackle the local market. Last fall, Pinterest rolled out Place Pins, an iteration of its core pin tool that allows users to save and repost a business or destination. By the summer, the product had already generated over 1 billion pins, and in July the company revamped its search product to speed the local discovery process.
In a recent interview with Street Fight, Joel Meek, the head of partner online sales & operations at Pinterest, which includes the company’s small business strategy, said that nearly 80% of the “hundreds of thousands of businesses” who already use Pinterest employ fewer than 10 people. Meek, a Google veteran who headed up small business sales and service operations for the search giant’s cloud products, discussed the role he believes the company can play an local discovery engine, and why its uniquely positioned to help small businesses reach users in the earliest stages of the purchase process.
Help us understand how Pinterest thinks about the local market, both from a product and monetization perspective.
We’re seeing very strong growth among the small businesses on the site. A third of these businesses are sole proprietors around photography, and then there’s a decent amount of pure online retailers and then a bunch of online and offline, as well as purely offline, sellers.
Local is an area that we’re starting to think about more and more as we nail down the basics first. One of things we’ve heard thus far is that local businesses want more than just online conversions. They want in-store conversions as well. A lot of that is about how do you connect with your audience. In general, local is something that we’re trying to think about more from a product standpoint, developing specific features to make the experience better.
Pinterest released its place pins last year. How do you think about the company’s opportunity in local search?
Place pins was initially focused the on travel category, and we’ve already seen over a billion pins created. The idea was to give for place pins was to give people additional information that will people center in on locations, whether it’s a store or a vacation destination. It’s an interesting way that people can discover local businesses. But I’d say we’re still very early on with that feature.
So imagine you’re selling Pinterest to a small business owner who has just started to invest in Facebook and Twitter. How should they think about Pinterest in relationship to both other social media companies?
If Facebook is all about the past, and Twitter is all about present, then Pinterest is about the future. For business, that creates an opportunity to connect with people across the whole funnel. From “I’m thinking of redoing the living room” to “I want this leather couch,” it’s a good opportunity to find users who are in the planning process.
In local, I really think the local discovery process is broken — we often miss a great store or artist in our neighborhoods. I don’t think any service out there has nailed the discovery aspect of local search. That’s probably an area where Pinterest can fill a void in a unique and interesting way.
Like many tech companies, Pinterest began developing its ad product with large brands. How different is the development process for small businesses.
We’ve been working with both large and small businesses from day one. For small businesses, we need to keep the platform simple and easy to understand with an ability to present a clear illustration of the return on investment. Yes, we have a self-serve product, but we also want to make sure we compliment that with quality service.
It’s still early on with the promoted pins product, but we have started to collect data from our partners to understand that full return on investments. But there’s also opportunities for smaller retailers to draw from the success of large brands. For instance, a small business do what Nordstrom’s did and look at their analytics and see what’s popular and then feature that more prominently in their stores.
Users engage with Pinterest in very different ways than they do with Facebook and Twitter. How does that impact the value proposition for advertisers?
One of the interesting things about Pinterest is that the board gives advertisers a ton of context around how the user plans to use a product You could have a picture of a kitchen and someone may pin it to a board called “granite counter tops” while another might pin it to a board called “new kitchen.” For marketers, that’s incredibly valuable to understand that level of context.
Most of the content on Pinterest comes from a business. Seeing content from businesses is a very natural welcome part of the experience. We wouldn’t have Pinterest if it wasn’t for the business content. In that sense, users are already looking to discover new business that have things that appeal to their interest.
Steven Jacobs is Street Fight’s deputy editor.