The Guide to…
In a week where Facebook shares have continued to struggle (sat at $29.60 at time of writing after launching at $38), it seems that the financial world is still trying to work out where the link lies between social media success and commercial success.
But there is one social network which continues to grow and is delivering strong quality referrals – that network is Pinterest. There are lots of articles which quote the incredible levels of growth in Pinterest, but not many who actually challenge it. I will be answering the following key questions:
- Who is on it?
- Why is it different?
- Why is it successful?
- What does the future hold?
Who is on it?
The demographic for Pinterest is becoming more and more broad, but is still dominated by women. Almost 70% of Pinterest users are women, and the dominant categories are food and fashion. The top 3 boards are Better Homes and Gardens, Wholefoods and Bergdorf Goodman, a luxury goods department store based in New York City. The top 5 repinned words are recipe, chicken, minutes, bake and cake. Without being sexist, these have a clear female bias!
Why is it different?
I attended a conference this week where the excellent Windahl Finnigan was discussing the role of Pinterest. Her research has shown that Pinterest is where people tend to be brand advocates and say positive things about products, and Facebook / Twitter is where people will complain about products. This positive atmosphere is attractive to both consumers (who may have troll fatigue) and organisations.
Pinterest requires less user commitment than other social networks. One criticism of Facebook is the level of personal information that you need to share to truly participate, and on Twitter it is so difficult to stand out. Pinterest posts will stay on your boards so that you can revisit them at any time, and you don’t need to share any personal information to participate.
Why is it successful?
The strongly female demographic of Pinterest is key to its success – females are far more likely to interact and share social media updates (from all networks) than males, so it makes sense that Pinterest has a lot of shares.
The commercial benefit from Pinterest comes from its referrals – how well does it move consumers down the path to actually making a purchase? It delivers a greater number of referrals than Google+, YouTube and LinkedIn combined. Not too surprising really – Google+ is struggling with low levels of user-generated content; YouTube is a sharing site and not commercially focused and LinkedIn is a very different proposition. I read recently that Pinterest has more members than LinkedIn, so it must be really successful – no, we are comparing apples and oranges, they are totally different propositions!
Pinterest refers more purchasers than Twitter because the content is so much more visually engaging, but less than Facebook because of the sheer size of the Facebook membership.
But what about the size of the referred purchase? The average order from a Pinterest referral is $80. From Facebook it is just half of that. When on Pinterest, people’s mindset is more open to purchasing than it is on Facebook, where the focus is being social and catching up with friends.
I have written many times about the power of the share – it is the 21st century’s answer to word of mouth. And Pinterest allows people to share their posts onto Twitter and Facebook. So, Pinterest’s software is designed to encourage its word to spread on the two biggest social networks – that is smart.
The secret to social media success is knowing where your consumers hang out online. And with a very clear female demographic, fashion, home and food retailers have embraced Pinterest and provided some very strong commercial results.
What does the future hold?
Like all social networks, Pinterest is facing the challenge of monetising without ruining the user experience. It is something that both Facebook and Twitter seem to be struggling with.
But for Pinterest, it has delivered strong initial referral rates, so there should not be a shortage of organisations wanting to advertise. But what affect will this have on the user? One of the benefits of Pinterest is the freedom to move round without being sold to. A business’ best advertising comes from the quality of their own boards as this is where their range should be. So, maybe the monetising opportunity is publicising those boards? I think there is a subtle way of recommending boards which Pinterest already does but not commercially. If Pinterest takes the main topics that a user pins, then this will allow boards to be recommended to them – rather like Amazon or eBay recommendations. This should satisfy businesses with well targeted consumers, and users whose experience is theoretically enhanced by this.
What do you think about Pinterest? Next big thing or just a flash in the pan? Let me know!