The social media platform Pinterest has become a go-to destination for things such as home décor inspiration, travel tips, clothing ideas, recipes, and so much more.
For the general public, Pinterest is a site that connects them with content generated by millions of monthly users, without having any membership or subscription fees paid directly by the consumer. Without an obvious source of revenue, however, you may very well find yourself wondering “How does Pinterest make money?”
This article will cover the basics of how Pinterest makes its money, its revenue and growth, and overall whether or not Pinterest is considered a profitable company.
How does Pinterest make money?
Pinterest makes its money in a variety of ways, including via advertising, partner and influencer collaborations, and revenue from the various businesses, they have acquired since its founding. Overall, the majority of the revenue that Pinterest sees comes from its many advertising options that are provided to third-party companies.
How does Pinterest make money from ads?
Pinterest boasts a whopping 478 million monthly users, who are targeted directly by ads from more than 1.5 million advertisers on the platform. These advertisers pay Pinterest to promote their goods and services on the site, which has resulted in it at least 82.2% of the company’s revenue being derived from advertisers.
Generally speaking, advertisers pay Pinterest for every time a user clicks on their ad. They also tend to pay based on how many users see their ads, even if they do not actually interact with it. This amounts to a tremendous amount of revenue for the company.
Other Pinterest revenue sources:
One of Pinterest’s business models is an interest revenue model. With this approach, Pinterest takes the considerable amount of money it gains from other sources and seeks to maximize the interest it makes off of the cash and marketable securities it holds.
One of the main sources of income that helps generate this interest is the sixteen different acquisitions the company has made since its founding. Acquisitions made by Pinterest include companies such as Jelly, Instapaper, Fleksy, and URX.
As stated previously, Pinterest also makes some of its money from partner or influencer collaborations. With partner collaborations, third party companies are able to work with Pinterest to boost their own advertising strategies, audience targeting, and overall performance. Pinterest makes money in return for the boost it gives these companies. Past partners include companies such as Shopify, Neustar, and Vidmob.
With influencer collaborations, Pinterest gives individual influencers the ability to tag their posts with links to products that their followers can purchase. A portion of the profits then goes to Pinterest. Influencers are also given opportunities to create content for third-party companies, of which Pinterest also gets a portion of the earnings.
Pinterest revenue growth
Revenue is calculated based on the amount of money a company receives in return for the goods or services it provides. In looking at Pinterest’s annual revenue for the past four years, the company has seen a tremendous deal of revenue growth.
Annual revenue for 2019 saw a total increase of 51.17% over the revenue from 2018. Meanwhile, the 2020 fiscal year saw an additional 48.12% increase over that seen in 2019. The trend continued in 2021 with a further 52.31% increase over the previous year.
While the final revenue from 2022 will not be available until the end of the year, early reports show continued growth. Revenue for the quarter ending on March 31, 2022 amounted to $0.575 billion, already amounting to an 18.48% increase over 2021.
Is Pinterest profitable?
As of 2022 – yes, Pinterest is a profitable company.
In the spring of 2022, it was reported that for the first time in company history Pinterest saw a full year of profit, to the tune of more than $2 billion in annual revenue.
As a result, Pinterest Inc. stock prices surged almost immediately, rebounding after having previously hit a 52-week low. The company plans to continue to push the new initiatives that helped it see such record profits, with the goal of continuing to see the same level of profit for years to come.
Pinterest is a unique social media platform that chooses not to profit directly from its users, building instead a revenue stream based largely off of advertising, collaborations, and company acquisitions. This method has led the company to tremendous growth, which will likely continue now and into the future.