Pinterest — long seen as a decent place for ad campaigns, but not a critical one — is getting some increased attention this week. This after the company's stock price surged by 15% yesterday year-to-date, driven by increasing ad revenue.
The rise has attracted investment firms' attention, prompting RBC Capital Markets to reassess its estimates for the company.
🔍 Factors Driving Increases
RBC liked Pinterest's recent third-party media deals, like the recent multi-year partnership with Amazon — deals which let Pinterest place more ads in categories where it lacks first-party data.
According to analysts, two opposing forces are at play:
- Increased ads, and
- Amazon's involvement leading to higher auction density that should drive CPMs higher platform-wide
So good news for Pinterest, less so for media buyers I guess.
Conversion support will also become a factor. Pinterest reports that 10% of enterprise customers using its conversion API have seen a 15% reduction in cost-per-action, a 30% increase in conversions, and a 30% growth in ad spend in the most recent quarter vs. 5% overall.
Image: Canva
