What you need to know:

• Pinterest has spent the last 2 years building out a suite of advertising solutions that straddle the full marketing money. And according to its local MD Melinda Petrunoff, it’s hit the inflection point, with a new suite of lowerfunnel, AI-powered solutions tackling the performance marketing requirements of brands.
• ROAS, conversion, brand and other metrics will plentiful across the platform’s Pinterest Presents event this week, as brands from Adidas to Mecca, Pandora and Walgreens touted the strong results they’d seen.  
• But it’s the platform’s positivity message that’s arguably more powerful in the current climate, where the evidence of social media’s negative impact on the mental wellbeing of young people is increasingly evident.
• As part of the Pinterest Presents virtual broadcast this week, global CEO, Bill Ready, said it was the platform’s relatively positive place in society compared to the other social media platforms that was compelling. Per Ready: “We’re proving you can provide real value to your audience without sacrificing their emotional wellbeing.”
• Local MD, Melinda Petrunoff, also stressed Pinterest’s proactive role in protecting younger consumers, noting privacy by default as a platinum basic for those under 16 years of age.

Full funnel and fully positive in comparison to the other social platforms: That’s the position Pinterest was working hard to land at this week’s Pinterest Presents annual showcase.

Laden with a fresh batch of AI-powered creative and advertising optimisation tools as well as ROAS and conversion results from advertisers, the social-but-not-social platform played off funny campaign creative with high-profile client shorts from Nestle to JPMorgan Chase to cement the message it has something for every advertiser if they’re willing to take a punt on the platform.

But outside the ad product and measurement story, Pinterest CEO, Bill Ready, was sharing a personal message in the face of growing fears of social media’s role in the growing mental health crisis happening with young people globally: “We’re proving you can provide real value to your audience without sacrificing their emotional wellbeing.”

“I joined Pinterest to build a more positive business model for social media, one centred on emotional wellbeing rather than engagement via enragement,” Ready said during the Pinterest Presents virtual broadcast. “That cause has only become more urgent with the growing youth health crisis around the world. The US Surgeon-General [Dr Vivek Murthy] has said social media platforms should come with a warning label – a better analogy might be nutritional labels.”

In response, Pinterest has helped found The Inspired Internet Pledge in the US last year with the Digital Wellness Lab at Boston Children’s Hospital, with the core principle being to measure the emotional wellbeing outcomes of its platform and share the results. According to the Centers for Disease Control and Prevention (CDC), youth mental health has continued to worsen, with nearly three in five US teen girls feeling persistently sad or hopeless in 2021 – a 60 per cent increase and the highest level reported in a decade. In a recent podcast with Mi3, Kincoppal-Rose Bay principal, Erica Thomas, labelled social media “the most damaging influence I have ever seen”.

According to The Inspired Internet Pledge’s findings, Pinterest leads the industry in terms of user wellbeing, Watkins said during Pinterest Presents.

“This is backed up by third-party research including Neely Ethics Technology Indices [Social Media Index], which found Pinterest has the lowest rate of overall negative experiences of social media platforms,” he said. In the Index,  2.7 per cent of US respondents said they’d personally experienced or witnessed something that affected them negatively on Pinterest, versus 14.3 per cent on TikTok, 19.2 per cent on Facebook and 21.2 per cent on Twitter.

Ready then threw down the gauntlet to other social platforms to put themselves through the same rigorous assessment.

“We have shared a tool for other platforms to measure their own outcomes and replicate the findings for themselves. Because while we are actively tuning our platform to improve the emotional wellbeing for users, we don’t want to be the only ones – we shouldn’t be,” Ready said. “Pinterest is proving a better interest is possible, but we can’t do it alone. It’ll take all of us, pushing for a healthier way forward.”

Speaking to Mi3 in advance of Pinterest Presents, local MD, Melinda Petrunoff, also took the subject of youth social media usage head-on, and was quick to note the platform is very much leaning in and working with local authorities as the Australian Government looks to introduce age restrictions around social media platform usage.

“We are absolutely there to comply in every possible way,” Petrunoff said. “We were the first major platform, if not the only major platform, that has made our platform private by default for anyone aged under 16 years old.

“We did that well over a year ago, before this was a discussion. Not surprisingly, our platform is not available for anyone under 13 years of age. Privacy by default means it's not even optional for anyone to turn that on, to make it public.

“What we know, and I think you would see this in your conversations with advertisers: People are coming to Pinterest to get ideas for an outfit or to design their bedroom when they're younger. They're not there to compare themselves. No content on Pinterest goes viral. No one is there to look at a selfie. People are there to focus on themselves. They're there to create a life they love, not to compare themselves. So it's a very unique environment. And that positive, inclusive nature is something I think advertisers are really appreciating. It's nice to be able to show that we can actually build a business that is positive and inspirational.”

Playing to performance

Positive, inspirational but also a platform that drives conversion. Petrunoff said it’s been a big two years building the capabilities to become a viable, full-funnel advertising solution for brands.

“I would say, based on these announcements that will have gone live with, it's a new era of performance on Pinterest,” she said. “As a business, we've been leaning heavily into what makes Pinterest unique. We know 50 per cent of our users are coming to the platform for shopping. We know people are coming to get inspiration, to plan for a moment or plan for an event. They're coming to get ideas, they're coming to decide, and they're coming to take action.

“If we know half our audience are coming to the platform to shop, we want to make sure they're able to increasingly take that action easily by us introducing them very quickly to these brands themselves.”

Regarded as an upper-funnel channel option, Pinterest had been struggling to work its way down the funnel in the minds of marketers and agencies. But the headline product announcement this week was firmly for those with a performance fetish: A new line-up of lower-funnel ad products, the Pinterest Performance+ suite, first touted at Cannes in June. The tools are available for free to existing advertisers globally and break the campaign options into consideration, conversions or catalogue sales objectives.

Notably, there’s an emphasis on decreasing campaign creative time through supporting AI tools, which Pinterest claimed cuts inputs by 50 per cent. There are also new creative tools to cut back the time it takes to make creative especially for the Pinterest platform.

“Ad innovation on Pinterest has been at an all-time high,” said Ready during the virtual broadcast. “We’re still the place for brands to drive discovery, but we’re now delivering on lower funnel and creative too. Brands are increasing Pinterest in their media mix and they no longer need to choose between awareness or lower funnel performance. Now they can have both.”

That's backed up by unit economics-focused ecom entrepreneurs like Carla Penn-Kahn, who suggests more brands are finding skyrocketing performance prices – which she recently told Mi3 have doubled in four years – are leading them to seek better value.

"A lot of customers are telling us that they're able to acquire customers, even though it's advertising far more efficiently, but a smaller market, on Pinterest than they can on Instagram, for example," said Penn-Kahn.

According to Pinterest, results from alpha and beta testing show most advertisers saw at least 10 per cent or more improvement in cost per acquisition (CPA) for Conversion and Catalogue sales campaigns or a 10 per cent-plus improvement in cost per click (CPC) for Consideration campaigns. As an example, the company said Prada’s new leather goods campaign in the US using Pinterest Performance+ campaigns versus business-as-usual campaigns resulted in a 64 per cent decrease in cost per action and a 30 per cent increase in conversion rate. They also saw a 1.8x increase in return on ad spend (ROAS) for checkouts.

Social Hill head of data and analytics, Daniel Hill, said for most of the industry, "brand" and "performance" are still different teams with different budgets working in silos. While brand teams have large creative budgets, performance teams often work with substandard assets relying purely on platform adjustments to drive results.

“Performance+ will bring Pinterest up to standard with market leaders from a technical buying stand-point and Performance+ Creative is very similar to Meta's latest AI creative product. However, with creative driving the majority of the outcome, the world's best brands will still be pulling brand work through the line into a performance realm rather than relying on platform AI solutions,” he told Mi3. “Advertising is ultimately competitive, and ongoing creative AI developments will increase the base standard across the industry. To stand out and drive results, top brands will need to push their creative even harder to drive strong ROI.”

Return and measurement

In that vein, Pinterest is also making Performance+ bidding for ROAS available in all markets to qualified advertisers. This allows users to optimise not just for clicks or conversion volume, but also now for the highest value (Pinterest Performance+ bidding for ROAS). The platform said most advertisers in alpha testing saw at least a 15 per cent increase in ROAS by using Pinterest Performance+ ROAS bidding.

A local brand example is Pandora. Pinterest said for a Conversion campaign, Pandora saw a 73 per cent increase in ROAS with Performance+. Make-up and skin retailer, Mecca, was touted by Petrunoff as another Australian brand that’s jumped in early with Performance+ on a conversion campaign and to target net new customers. As well as unlocking new customers through automation with Performance+, machine learning and smart AI optimisations saw Mecca drive a +7 per cent higher ROAS compared to BAU targeting.

Adidas, meanwhile, gained improved key efficiency metrics such as average order value, conversion rate, and ROAS through a Catalogue Sales campaign using Performance+ Shopping. It’s a good offering to have, said Hill – “but only if brands have done the work to ensure attribution is reflective of the platform's actual contribution to sales”.

“What I'm excited about is the AI improvements around creative creativity as well. We know that for brands, it's an enormous amount of time and effort to be able to showcase their brands in a creative way. One of the new features with Performance+ allows us to take products on bland, white or really not very inspiring backgrounds, to make them more lifestyle imagery, which we know works best on Pinterest,” said Petrunoff.

“If people become price conscious, planning becomes even more important. It sets us up to have very early signals into what people are caring about and looking for. If we can help users find that in the best possible way, it’s optimal for both advertisers and users.”

Globally, Walgreens has used that creative product and driven a 55 per cent improvement in click throughs as a result. Locally, Pinterest is talking to a large supermarket about the AI-driven creative tool.

“That has been a barrier for them to lift products in a catalogue, and putting them on lifestyle imagery. It solves that problem,” Petrunoff said.

Hill was a clear fan of the creative optimisation. “Performance+ Creative absolutely reduces the barrier Pinterest has traditionally faced of bespoke creative for the platform. While top performing brands will continue to drive better ROI through creative beyond just dynamic, AI-augmented product shots, AI creative will allow brands to experiment on the platform for a lower commitment and at a larger scale,” he commented.

Announcing Promotions 

Another way Pinterest is responding to ongoing softer retail conditions is through personalised, branded shopping recommendations, promotions surfacing and Deals ads modules for consumers across the Home Feed.

The company noted last year’s holiday shopping season saw a global average discount rate of 21 per cent, the highest since the start of the pandemic. Petrunoff is also seeing local users actively looking for sales and offers locally and pointed out ‘Pinners’ plan holiday season earlier than they do on any other platforms, and are also planning for those holiday moments.

“With any products they’ve been saying into their boards, it allows them to see any products that go on sale at a particular point in time. We believe that will be a huge driver of increased performance for advertisers on the platform,” she said.  

The promotion surfacing tools are available by advertiser request in the US, UK, Canada, Australia, France, Germany, Mexico, Brazil and Japan. Early results highlighted included a 12.7 per cent increase in conversions compared to the same ads that didn’t use Promotions.

Going too heavy on performance

There's a tonne of recent data suggesting brands are skewing too heavily towards performance and lower-funnel activity as a result of the ongoing cost-of-living crisis – as was suggested in Mutinex’s latest report.

According to a new report from Kantar released this week, ‘Destination: Marketing Effectiveness’, the drive towards performance marketing is because marketers: ‘find it easy to communicate the returns’ (47 per cent); believe it ‘drives more short-term returns than brand marketing’ (42 per cent); ‘feel pressure from the C-Suite to achieve targets’ (38 per cent); and ‘find it more cost-effective’ (31 per cent).

But Petrunoff insisted Pinterest is still seeing strong increase in investment and presence from advertisers on the platform.

“These new suite of performance products actually sets us up very well to help advertisers deliver on their goals, whether they're brand related or performance related,” Petrunoff said. “At this stage, we're seeing increased investment across both.”