July 24, 2024

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Pinterest announces multiyear ads partnership with Amazon alongside earnings beat

Pinterest today announced a multiyear strategic ad partnership with Amazon aimed at bringing more brands and relevant products to its platform. The new deal will make the e-commerce giant Pinterest’s first partner on third-party ads, the company said in a blog post shared alongside its first-quarter earnings beat.

The partnership is a step in a new direction for the image sharing and social media site, which has been working to adjust to consumers’ changing interests around product discovery in recent years. As demand for video platforms like TikTok and Reels grew, Pinterest’s image pinboard began to feel dated, leading it to launch its video-first Idea Pins and increase its investment in creator content.

But some of those creator efforts were recently wound down, ahead of Pinterest’s last-quarter miss on revenue where the company warned also of low first-quarter sales, sending its shares down.

By comparison, Amazon’s digital ads unit in the same quarter did well, jumping 19% to $11.6 billion.

Like other tech companies, Pinterest has been struggling with the macroeconomic forces impacting its business, but promised it was working to adapt to the changing environment. The company also laid off 150 employees in February as it tried to reduce expenses.

While Pinterest has for years worked to connect product inspiration to purchases, the Amazon ads partnership could potentially offer consumers a more seamless buying experience. Unlike on some e-commerce websites, Amazon shoppers may not have to fiddle with filling out forms, as most have their payment information already on file with the company, leading to faster checkouts.

When users click on an Amazon ad on Pinterest, they’ll be taken directly to Amazon to make the purchase, Pinterest says.

“Over 463 million people come to Pinterest each month to create a life they love. Brands and products are a critical piece of this journey, enabling Pinners to move easily from inspiration to action and advertisers to realize value in connecting with users with high commercial intent,” Pinterest noted in its blog post. “Our partnership with Amazon will allow us to scale these efforts in meaningful ways,” it said.

The company noted the implementation of the Amazon ads integrations will take place over multiple quarters, starting later this year. Pinterest can’t yet say where the ads will appear to end users and it’s not making any near-term forecasts related to revenue impacts, noting it may not see meaningful impact until next year.

“Amazon Ads is delighted to partner with Pinterest and make it even easier for customers to discover and buy relevant products through shoppable content, while also providing differentiated value for brands,” add Amazon SVP Paul Kotas, in a statement.

Pinterest beat on Q1 revenue and earnings, with revenue up 5% year over year to $603 million, ahead of $598 million expected, and adjusted EPS of $0.08 versus $0.02 expected. Global monthly active users were up 7% year over year to $463 million. The company also reported a GAAP net loss of $209 million, or 31 cents per share, up from 1 cent per share in the year-ago period.

Despite the earnings beat, Pinterest stock dropped 6% on higher Q2 costs.

More to come.