Data Goldmine: Why Microsoft Pursued Pinterest

Data Goldmine: Why Microsoft Pursued Pinterest

by , Staff Writer @lauriesullivan, February 11, 2021

Data Goldmine: Why Microsoft Pursued Pinterest | DeviceDaily.com

Microsoft gets consumer data from a variety of places across its network of sites and services such as the Windows operating system, LinkedIn, Bing — and for those who own an Xbox, the game console, too.

Similar to Google, Microsoft has a privacy dashboard that tells consumers everything the company knows about them.

Pinterest, too, has a ton of data about the people who use its platform, especially with regard to the things they like.

In the past year, the company invested in the ability to deliver returns on accountable performance advertising — including conversion optimization, ads and shopping — and to scale campaigns and improve on automation through tools for advertisers like automated bidding.

“The words ‘invest’ and ‘investment’ are mentioned eleven times in the text of Ben and Todd’s shareholder letter,” wrote Colin Sebastian, senior research analyst at Baird Capital, in a research note. “On the [earnings] call, management outlined the focus areas for investment, including attracting more video content, improving the user experience, ramping advertising capabilities [automation and measurement] and expanding the platform’s shopping orientation with enhanced search and product recommendations.”

It’s pretty easy to understand the reason why Microsoft pursued Pinterest. It’s all in the Pinterest’s earnings call.

Ben Silbermann, Pinterest CEO, on the call mentioned the company’s reliance on first-party engagement signals and intent-based user activity like product searches, pins and boards that should help to limit the negative impact from Apple’s advertising identifier (IDFA).

Pinterest reported that Q4 2020 revenue grew 76% year-over-year to $706 million, whereas total-year revenue grew 48% year-over-year to $1,693 million. Global Monthly Active Users (MAUs) grew 37% year-over-year to 459 million.

International business grew 145% year-over-year on the back of strong advertiser demand. International markets now represent 17% of total revenue.

The plan is to expand its international business in existing geographies, and improve the ability to monetize in Latin America during the first half of this year.

Advantages from search come easy as people tell Pinterest what they want. And while there’s a fair amount of uncertainty around how much of an advantage this gives Pinterest, “what we do know about our platform is that we have high degree of commercial intent and planning behavior,” said Todd Morgenfeld, Pinterest CFO, during the earnings call. “That planning behavior drives a fair amount of on-platform signal”

Actions such as users creating boards, visual and text based queries, and saving content based on what Morgenfeld calls “planning behavior” creates a fair amount of signal that helps to inform ad targeting.

Morgenfeld also noted three major themes for the coming quarter. He pointed to early stages of automation, insights-led selling, and brand safety.

“These are three things that I’m really excited about coming out of the back half of last year that we expect to persist,” Morgenfeld said. “What’s different about Q1, two things, one, we had a little bit easier compare, which will become more pronounced in the second quarter and then much tougher as we get into the back half of the year.”

MediaPost.com: Search & Performance Marketing Daily

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