With how useful and neat Pinterest is, as well as how popular it has been getting lately, they have to be raking in some serious cash, right? But when you offer a free service, how do you make money off of it? In this tutorial, we’ll explain how Pinterest makes its money, as well as avenues they make explore for making money in the future. So how does Pinterest make money?
Pinterest makes money through ads on boards, as businesses are openly allowed to advertise their products to users, who are often looking to purchase new items. They also recently launched the Pinterest Shop on iOS and Android devices, which allows users to buy products instantly with a credit card.
Pinterest.com is one of those interesting websites or apps like Snapchat that is valued very highly, yet seems to not bring in much revenue because of the way it is designed. With advertisements and sales from those ads, they estimate bringing in revenue in the billions by 2018. The new Pinterest Shop is also very convenient, and will likely bring in more revenue for the website in the coming years.
Pinterest and their investor relations
Taking a very unique approach to marketing themselves, they offer their services for free, even to small businesses who want to use the platform to advertise and promote themselves. In general, they’re looking to find out two things:
- How many (new) users they can attract to the website.
- How many users follow posts and pages from businesses on Pinterest back to the websites of those businesses (where they will then hopefully purchase products or services).
Based on those two things, Pinterest is looking to keep potential investors guessing as to how effective of a marketing tool Pinterest can be for their business. This is why, while the website doesn’t have many established ways of making money yet, the company is estimated to be worth around $5-10 billion USD.
Potential money-making models for Pinterest
As for how Pinterest might be able to make money in the future, some potential avenues that have been speculated upon include:
- Placing advertisements for paying businesses next to related posts (a feature called “Promoted Pins” that they recently launched)
- Selling information to marketers about what people look for the most, in order to help those marketers know what products to sell, where to sell them, and who wants them
- Selling control of the company to a computer or Internet mega-corporation like Google, Yahoo, or Microsoft
We hope this explanation helped enlighten you about the ways Pinterest, and other similar websites make money. To learn more, be sure to check out the rest of our course, including important topics such as how to stay safe while using Pinterest.