At Pinterest, a New Pitch to Small Businesses

In a social media market littered with high-profile failures, Pinterest is a phenom. The bookmarking site has managed to capture and sustain the attention of an overwhelmed consumer, carving its own domain in a jam-packed social media market.  Now, it’s time to build a business — and the local market is poised to play a big role.

The company, which exploded onto the scene in 2010, began to develop its advertising products earlier this year. Pinterest launched its first paid advertising campaigns in the spring, working with Kraft, Gap and handful of other large brands to introduce a new promoted pin product.  Then, in July the scrapbooking site launched 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.

“There’s a lot of interaction between the online and offline world. A lot of time they’re finding things on Pinterest and buying thing in stores,”said Joel Meek, the head of the company’s small business effort, during a BIA/Kelsey event in San Francisco on Thursday. “Discovery permeates our the way we shop in the physical world but it’s still largely unsolved online.”

Small local businesses already account for a large portion of the businesses on the site, says Meek. He said that “hundreds of thousands” of businesses currently use Pinterest, the majority of which — nearly 80% — employ less than 10 employees.  The company may be known for catering to fashion and design types, but Meek says two of every three businesses using the service operate a physical store.

To support those offline business, the firm has spent the past year developing products that help connect online discovery with the brick-and-mortar shopping experience. In the fall of 2013, Pinterest rolled out Place Pins, an iteration of its core pin tool that allows users to save and repost a business or destination. Then Last summer, Pinterest announced a partnership with Shopify, the point-of-sale firm, that would allow business programmatically fill inventory data into their Pinterest pages.

As newcomers, social media firms face a small business market dominated by search. Companies like Pinterest and Facebook need to convince users to shift spending from Google without scrapping the concepts which the search giant has spent millions on to educate small businesses. For Pinterest, that means pitching the service as a way for consumer to “discover” — rather than “locate” — local businesses and products.

“If you think about traditional search, it’s extremely effective at solving fact-based questions where there’s one answer for everyone,” said Meek. “But there are tons of other questions where the answers are very personal. These questions are much more about meaningful possibilities where theres no one correct answer and represent a bigger opportunity than traditional search.”

For years, Google has benefited from its position as the last step in the consumer discovery experience. A shopper may only come to google to find transactional information about a business  — say, a phone number or an address — and yet it will appears that Google is responsible for the consumer going to the store. The idea, says Meek, is that a Pinterest could provide a way for business to not only convert, but stimulate demand for a product.

However, the success of Pinterest will likely not come at the expense of Google’s existing business. Rather, small businesses will likely continue to investments in search and shift spending on more awareness-driven products such as sponsorship and print ads to digital content marketing efforts on Pinterest and Facebook.

Steven Jacobs is Street Fight’s deputy editor.