Friday, September 20, 2013

Social Media as an advertising platform

That the entire social media and online businesses thrive on advertising revenues has never been a secret. So, it wasn't really surprise when I got a mail from Pinterest in which they have taken great pains to explain why they are moving towards being an advertising platform. Ohkay, the words are not so direct. Some of the points mentioned included the usual platitudes of ads being tasteful, relevant and constantly "improved" based on user feedback. The netizens might argue, " what's new in that? Haven't we seen the same with Facebook and Twitter before that?" Of course, Google is the holy mother of all advertising platforms.
Major points of contention here are:
  • Will the user behavior and usage patterns get affected by ad displays?
The site currently has 70 million users with 30% of them pinning and repinning in June '13. that's not a sizable number when you compare with the likes of FB, twitter etc but still substantial enough considering it has been only 3 years since its inception.

  • Will Pinterest be able to generate the kind of advertising revenues that some of the other social networks have been able to do?
  • Businesses might lap up the idea of ads (initially they are free and Pinterest hasn't really clarified whether businesses will have some control over their ad displays as of now) but will the users bite the bullet?
Both the above questions depend primarily on whether Pinterest is able to extend its user base beyond the American shores who currently constitute 79% of its user base. Amazingly, around 38% of Business accounts on Pinterest are Chinese. It is a huge number considering that the site isn't even localized in China.

Will the numbers grow positively for the site? A lot depends on how soon the user base grows exponentially and the users see the site having its own differentiating factors rather than more of a me-too look and feel. I would leave you with the following pointers form the mail that I received from Pinterest detailing their advertising plans:

I know some of you may be thinking, "Oh great...here come the banner ads.” But we’re determined to not let that happen. While we haven't figured out all the details, I can say that promoted pins will be:
  • Tasteful—No flashy banners or pop-up ads.
  • Transparent—We’ll always let you know if someone paid for what you see, or where you see it.
  • Relevant—These pins should be about stuff you're actually interested in, like a delicious recipe, or a jacket that's your style.
  • Improved based on your feedback—Keep letting us know what you think, and we'll keep working to make things better.
For our first test, we'll promote a few pins in search results and category feeds. For example, a pin for a Darth Vader outfit from a costume shop might be promoted in a search for “halloween.” Nobody's paying for anything yet—we want to see how things go and, more than anything, hear what you think.
Thanks so much for all your support these first few years, and we hope you'll keep pinning with us for many years to come!

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