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Pinterest seems like it should be one of the great social media success stories of recent years.
It’s got 70m users, 80% of whom are female and 35% of which use Pinterest on their mobiles.
A demographic skewed towards women with decent incomes: an advertiser’s dream...surely…?
The platform also features half a million business accounts and attracts 2.5 bn page views a month. A recent round of investment valued it at $3.8bn.
And the revenue of this dream site?
£0. Yes, that’s $0 if you’re from Wyoming. (Or €0 if you live in Rome.)
Social media, in its most organic state, draws a lot of strength from discovery, as a filter, curated by like-minded people. Many people use Twitter in this way, as a news aggregator.
And Pinterest offers the same neatly segmented library, whether you want to view anything from patterned blinds to paella recipes. And all wrapped in an eye-catching user-friendly visual experience.
The social web is full of startups that win gold for facilitating discovery or appreciation, but come last when it comes to generating a sustainable business model.
Take Spotify (valued at $3bn and made a $78m loss in 2012) or Tumblr (acquired by Yahoo, made $13m in revenue but had $25m in operational costs in 2012).
Yelp and Fab.com are two more, Twitter too to some extent although the commercial imperatives are kicking in.(There’s a great breakdown here from Time magazine with more examples).
Social media’s raison d’etre has always revolved around community, connection and discovery. Do these principles, and consumer behaviours and expectations in social spaces, automatically need to be at odds with commercialism?
Newsfeed ads on Facebook were, and probably remain, unpopular, but they’re still there. And the share price has done relatively well lately.
Some of the purists hold firm to a utopian social mantra, like Pinterest CEO Ben Silbermann who said in September:
Nobody’s paying for anything yet. We want to see how things go and, more than anything, hear what you think.
I wonder what he’ll say when his earn-out is linked to share price after Pinterest is acquired? I don’t think purist social media principles need to be uncommercial by nature.
Ultimately, every audience will be prepared to put up with some commercial messaging, if it is thoughtfully implemented and doesn’t significantly impair the site’s appeal or user experience.
So how do you achieve this? The first step has to be to ask the audience.