Turning the lastest whizbang web site into a marketing success

Citation

(2012), "Turning the lastest whizbang web site into a marketing success", Journal of Consumer Marketing, Vol. 29 No. 5. https://doi.org/10.1108/jcm.2012.07729eaa.002

Turning the lastest whizbang web site into a marketing success

Article Type: Internet currency From: Journal of Consumer Marketing, Volume 29, Issue 5

Edited by Dennis A. Pitta, University of Baltimore

Over time, this column has noted the developments in marketing practice and technology that are evolutionary steps in advancing the profession. Recently, we chronicled yet another innovation that tilted the marketing balance, this time toward mobile device based communication. That portrays one of the challenges to marketing in the twenty-first century, namely the accelerating pace of change in customers, competitors, new product developers and their abilities.

Pinterest.com

One relatively recent development is the web site, Pinterest.com. Pinterest is described as the fastest-growing social-media site in the world (Bailey, 2012). Pinterest lets users visually organize their online world in a way that allows creativity. As a result, it has provided a unique and important way to organize content on the internet. In the site’s own words, “Pinterest is a virtual pinboard. Pinterest allows you to organize and share all the beautiful things you find on the web. You can browse pinboards created by other people to discover new things and get inspiration from people who share your interests. People use pinboards to plan their weddings, decorate their homes, and share their favorite recipes” (Pinterest.com, 2012). Pinterest has reversed the formula used successfully by powerhouses such as e-bay. Instead of focusing on e-commerce and building a brand one transaction at a time, Pinterest has shunned e-commerce entirely. Its appeal taps the passions of its users that represents a deeper relationship than just buying an item from a web site.

The web site is still evolving. Recognizing the importance of both internet and mobile computing, Pinterest provides both a URL and makes a SmartPhone application available. While it is technological characteristics are well developed, it does not yet demonstrate its path to commercial success. For example, some industry experts do not really understand its potential. One such expert, JWT North America CEO David Eastman stated his confusion with the site during Social Media Week in February, 2012. He stated, “Pinterest – it’s a beautifully laid out visualization of all the stuff we like, but … it all feels a bit empty.”

That comment focuses on the pinboard element in the site. Users can cut and “pin” pictures of anything that interests them like pasting pictures in a scrapbook. Visits to the site will reveal scores of images for home decorating, food, landscaping, fashion ideas, architecture and home decorating, There are other categories that include music, film, photography, crafts, and cars. In fact, there are over 30 different categories of interests that users can share. The nature and scope of the pictures creates value and the creativity of the organizer can enhance that value. One question focuses on the work it takes to contribute to Pinterest. Some wonder about the time commitment necessary to create a craft then upload a photo of it, “pin it,” and comment about it. At first glance, Pinterest seems reserved to those with infinite free time. In fairness, Pinterest can be fun. It capitalizes on providing a stage to show off people’s creativity. It is essentially different than Facebook. Facebook seems organized around acquaintances and their activities. In contrast Pinterest focuses on the interests of individuals and their creations. It has been described as providing inspiration and promoting aspirations among those who share the same passions (Virzi, 2012). Interest and wants are arguably the most robust segmentation bases. Marketers and businesses can no longer ignore Pinterest. Apparently, users see its value. Experian is a marketing services company which publishes trends in the industry. Its 2012 Digital Marketer Trend report lists Pinterest as the third most popular social networking site in the United States, attracting 21.5 million visits in the week ending January 28, 2012. Experian believes that Pinterest holds promise for retail brands that “want to make more meaningful connections with their customers.”

Pinterest’s focus seems to support that opinion and a survey of its postings reveals interesting and thought provoking “pins” that appeal to enthusiasts. Pinterest has worked to boost the visit totals by making it easier for visitors. Indeed, Facebook and Twitter both allow their users to log in from their web sites. In addition, Amazon and eBay plan to add Pinterest Buttons to their product pages. This is a very important development for the web site’s appeal. Still with all of this supporting Pinterest, the web site has not yet worked to capitalize economically. Its web site states that, “Right now, we are focused on growing Pinterest and making it more valuable…In the past, we’ve tested a few different approaches to making money such as affiliate links. We might also try adding advertisements, but we haven’t done this yet.” This calls into question the web site’s sustainability. Pinterest is clearly a social media hit, but users do not actually buy anything from it. So in the words from a not so recent movie, it is impossible to “show me the money” – at least from consumers. If the users are not buyers, they are by definition browsers. There is a question about whether browsers can yield payments. The question is not farfetched, and the answer seems logical. Pinterest has a large, growing user base, many who are either browsing or actively searching for some kind of product.

How might Pinterest generate revenue?

Web site revenue generation depends on creating an effective monetization model. There are potential monetization opportunities, several of which are generalizable for other digital media. Broadly speaking, internet monetization requires targeting segments that will pay for services. They fall into four categories, advertisers, e-commerce partners, users, and other B2B partners.

Advertisers

Two of the many possibilities include creating branded pins or branded campaigns. A branded pin might take the form of a onetime sponsored pin in a pin stream that is paid for by an advertiser. These pins would ideally be placed on category pages (e.g. architecture, furnishings, etc.) and not be jarring to the user.

Branded campaigns are already underway and involve brand holders creating their own Pinterest pages and pinning their own products to them. This seems a viable revenue stream, even considering the “non-commercial” nature of Pinterest.

E-commerce partners

Pinterest already has a dedicated section of the site focused on e-commerce. It is titled “Gifts” and has the look and feel of a marketplace. Pinterest has moved all pins that contain the “$” character in their description to the Gifts area assuming that they are meant to be e-commerce links.

Pinterest could also create a true C2C marketplace. Instead of merely pinning products, users could engaging in true e-commerce. They could post product photos, a description, and a price, into a modified “Gifts” section where other users can buy the pins directly on Pinterest.com. Pinterest could require a percentage of the transaction and increase its revenue. Typically it could collect a 5-8 per cent cut of the transaction value.

Users

If Pinterest generates significant volume from its “Gifts” section, it could create its own e-commerce retail operation. Instead of directing its users off-site to other e-commerce sites it could control the entire transaction. Based on what users are “pinning”, it could source its “own” products, create a check-out process on-site and manage logistics.

The ultimate expression of a user-centric revenue stream is creating an online brand. It is tricky to accomplish but Pinterest has the opportunity to create its own brand and its own line of products. Pinterest accesses daily market research, supplied by user pins that help it forecast demand well. Armed with the knowledge of the products and designs their user base likes they are in the unique position of being able to market this supply and meet that demand. If necessary, Pinterest could outsource production and logistics and capitalize on marketing skills it could develop.

Charging B2B partners

Knowledge is power and Pinterest knows its user base. That data may be valuable to advertisers, retailers, publishers, TV networks and other marketers. The clearest example is Nielsen which aggregates data from retailers in many ways, then re-packages it and customizes it for a specific customer.

Overall, Pinterest has two exciting values: one is a web site with a captivating variety of content; the other the information that comes from knowing its user base. It seems inevitable that it will become more commercialized; the economic pressures are irresistible.

In our next issue, we will investigate other informative sites and invite readers to submit their favorite internet sites for our consideration.

Reader requests

Please forward all requests to review innovative internet sites to: Dr Dennis Pitta, University of Baltimore, 1420 North Charles Street, Baltimore, MD 21201-5779, USA. Alternatively, please send e-mail to: dpitta@ubalt.edu for prompt attention.