Pinterest addresses the TikTok threat in its first quarter earnings – TechCrunch

Pinterest may have Win in revenue and profits In the first quarter, but the company has yet to step out of the woods when it comes to creating a place for its service in today’s competitive landscape. In particular, Pinterest faces a credible threat with the rise of TikTok when it comes to social commerce. The idea that shopping can be inspired by browsing shared media by others is an experience that Pinterest, in a sense, has helped bring to the fore, with its pinboard-style website where users have often kept ideas for things they are considering buying or trying.

But these days, the more common chorus among affected and inspiring buyers is “Tiktok made me buy it”, not “I found it on Pinterest”.

This is a challenge that the company understands it must overcome in order to establish its site as a target for the next generation of online shoppers.

The company on Wednesday Reporting Quite stable profits, attractive With revenue of $ 575 million compared to the expected $ 573 million and yields earnings per share of 10 cents instead of the expected 4 cents. But one troubling area was the decline in the number of users. The company reported that its global monthly active users fell 9% from the same period last year to 433 million in the quarter, below expectations of 437.9 million.

Investors who delved into the decline of users thereafter Gains Communicate with a focus on better understanding how Pinterest faces the TikTok threat.

Pinterest has explained that it has been investing for the past year and a half in its new video-enabled features, such as Idea Pins – a sort of combination of the first video of short video content in TikTok-stye format and also Stories that can be tapped.

These pins are intended to attract creators to the Pinterest site, and allow them to record and edit creative videos with common tools such as narration recording, background music, transitions and other interactive elements. But the pins can also include content pages where creators can add instructions, like the steps for making a do-it-yourself project or the ingredient lists for the recipe. This makes the Pins more goal-oriented and action-oriented compared to some of the content in entertainment-focused destinations, like TikTok or Instagram Reels.

Pinterest admitted that it had to do a significant amount of work to catch up on where the market was headed via video, but believed it was now starting to see some attraction.

The company said its move to video-focused comes at the expense of some active monthly users in the short term, but it is taking the risk to get the new video-focused ecosystem up and running. As a result, it can be seen that the number of Idea Pinners in video has increased 15 times from year to year, noting that the feature attracts a more mixed audience. Pinterest also said it saw more than 25% growth in Idea Pins’s quarter-on-quarter savings rate. And Pinterest users who follow multiple video creators on the site tend to visit Pinterest more often than those who have not, the company shared.

“It’s also strategically important because we think video as a format is just fundamental to the way people get inspired and act in the future,” noted Pinterest CEO Ben Zilberman.

Pinterest also plans to continue developing new advertising features for video, including by leveraging its latest acquisition Vochi, which will help creators create better videos that are more likely to provoke action. It is said that it plans to extend the rewards to its creators Launched Pinterest API for shopping and started beta testing A new feature called Your ShopOffering a customized experience to users by connecting them with products they may like.

But Pinterest also said it felt the effects of lower search traffic and “time people spent on competitive platforms.” While the former was attributed to Google’s search algorithm adjustment in the quarter, the latter was more of a veiled reference to TikTok, in addition to other social apps.

The company noted that the US is its most mature market and one where a number of social media, entertainment and news apps compete for the time of mobile device users.

We read aloud [the] Competition only because there is a huge amount of options for consumers on the phone at any given time, “Zilberman said, without explicitly saying the word” ticking. “

“That said … what we heard from Pinners and what we see is that we have a pretty distinct use case … this is the use case of using Pinterest to plan, prepare for big events, and then, ultimately, consider purchases. And that’s quite different from a case. Use of entertainment and news, “he added.

But investors were clearly interested in understanding how TikTok, specifically, is affecting Pinterest’s business, prompting a direct question about the growing threat from the short video giant, whose mobile app saw the most downloads worldwide in the quarter.

“We have no exact loyalty to where people spend their time,” Zilberman responded. “But it’s clear that the story of recent years in terms of time change has been the rise of TikTok as a central place for people to hang out,” he admitted, before reiterating that Pinterest’s focus is on action-packed content – not just entertainment.

“This will have to be reflected in the way we provide incentives to creators, but also in the way we rank content on Pinterest,” he said, before presenting the vision of how Pinterest would compete with TikTok.

“The reason a feed on Pinterest feels different from a feed on a social network, or a feed on a pure entertainment network, is that the content is rated taking into account how useful this idea will be to accomplish something in the future,” the CEO continued. , Like staples of funded ideas, this is the kind of central thesis behind it. And this is in line with Pinterest’s main thesis overall, where it’s not a platform to talk to your friends. This is not a platform to keep up with the news. This is a platform for you to express things you want to do in your life [and] So that we can help you imagine what this final situation looks like, “he said.

Pinterest has also said it will work to improve the recommendation on house fees and the quality of its search results, while making Pinterest easier to access and use even for disconnected visitors.

But the company stopped thanking its monthly active user [MAU] The loss was due to TikTok or other competitive threats.

Instead, it largely blamed the global decline in users in the Russia-Ukraine war and lower involvement from other regions across Europe – an impact of about 5 million MAUs. Excluding this situation, Pinterest believed that its MAU count would have increased moderately from previous estimates.

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