Pinterest Boards The Video Train

Pinterest PINS is expanding its footprint in the creator community with Tuesday's launch of a video-first feature called "Idea Pins". The image platform is challenging other social media platforms by allowing creators to record and edit creative videos with up to 20 pages of content, voiceover recording, background music, transitions and other interactive elements in its "positive", "inspiring" and creative community.

Pinterest shares dropped after the company managed to beat estimates on both the top and bottom lines for its latest quarter on April 27^th as investors focused on a slowdown in user growth ahead of the re-openings. Although the resurgence of Covid-19 infections due to variants fueled Pinterest's growth, the vaccination rates are slowing the virus spread, so it is to be expected that users will curtail their time spent on the image-sharing platform in the near future.

The Story Behind Idea Pins

Obviously, video is the key element of this concept that aim to target the consumer demand for short video content but in this case, it is of creative nature. Idea Pins evolved from enhancing Story Pins that were launched in September last year, after a year of various development stages. Pinterest explained that Story Pins were different from the Stories you'd find on Snap Inc's SNAP Snapchat and Instagram Reels or YouTube Shorts because they focused on what people were doing, the action itself like undertaking a new project or an idea, instead of providing a glimpse into a creator's personal life. Another notable differentiator was that Story Pins didn't disappear after a certain amount of time, but rather could be surfaced through search and other discovery mechanisms. Idea Pin is merely a rebranded Story Pin, which now offers a broader suite of editing tools.

Idea Pins still include many features common to Stories, with over 100 hand-drawn stickers focused on top categories and expected behaviors and the option to tag other creators, along with plans for the royalty-free music database Epidemic Sound to offer free tracks as part of an ongoing collaboration. But, an additional perk is that Idea Pins can include "detail pages" where viewers can find the ingredient list or instructions as its aim is to inspire people to try a recipe or a new project, which is handy.

The Idea Pin format has been released on May 18^th to creators with a business account in the U.S., U.K., Australia, Canada, France, Germany, Austria and Switzerland.

The First-Quarter Figures – A Defining Milestone

During the first quarter, revenue grew at an impressive YoY rate of 78.3% as it amounted to $485 million. Adjusted EBITDA expanded to $84 million, smashing analyst estimates of $57.4 million. Pinterest's net loss shrank 85% to $21.7 million, from a loss of $141.2 million a year ago. But monthly active users of 478 million came below the consensus estimate of 480.5 million.

Outlook

With the 3-cent GAAP EPS loss in the first quarter, Q2 losses will likely come in higher Q2 global MAUs are expected to grow only in the mid-teens with U.S. MAUs expected to remain flat on a year-on-year comparison. Meanwhile, sequential operating expenses will accelerate.

The company is investing in comprehensive marketing. It has creators adding to native content that will drive long-term user engagement and result in higher revenue per engaged user. The concept that despite MAU being expected to drop in the post-Covid world, the platform is working towards expanding margins from its core customer base.

CFO Todd Morgenfeld emphasized investments to align the platform with advertisers and the improved solution will result in an average revenue per user growth (ARPU) opportunity while meeting the needs of small and medium businesses, hopefully allowing Pinterest to attract advertisers even from Twitter TWTR and Facebook FB.

Fortunately, the site's growth is seasonal and it's coming off a weak period. Even as people return to the physical workplace and go outside to restaurants and movies, they will still visit Pinterest, they will just spend less time on the platform. But the point is that they will shop more meaningfully by spending the same amount in less time on the site.

The Next Step Is To Make Idea Pins More Shoppable

With many tests underway, Pinterest has been increasing its investment in the creator community in recent months. Last month, it launched its first-ever Creator Fund and this month, it tested live-streamed events with 21 creators, along with testing numerous brand collaborations.

A Highly Competitive Environment

Its competitors are way ahead when it comes to spending as the new Creator Fund of $500 thousand falls short of the $1 million per day Snap paid creators, the $100 million fund Alphabet GOOG committed to YouTube Shorts creators, TikTok's $200 million fund and even the deals Instagram has been making to lure Reels creators. These platforms, along with a host of startups are investing big to help creators directly monetize their efforts through features like tips, donations, subscriptions, and more.

But Pinterest has two things in its favor. Its reach as the company claims it gathers 475 million users and especially the fact it is a rare environment where ads are ‘welcome' instead of annoying to users, and that is an opportunity that advertisers would be crazy to pass on.

Inspiration And Creativity Never Go Out Of Style

Its content policy is simple: inspiration comes from people who are fueled by their passions and want to bring positivity and creativity into the world, as explained by Pinterest co-founder and Chief Design and Creative Officer Evan Sharp. On this platform, anyone can inspire: from creators to hobbyists to publishers. This unique image platform is a place where anyone can publish great ideas and find inspiration. What Pinterest does is spark creativity in its users, inspiring them to create the life they love -what's not to love about that?

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Image by fernando zhiminaicela from Pixabay