Pinterest may have beat on revenue and earnings in the first quarter, but the company is not out of the woods yet when it comes to carving out a place for its service in today’s competitive landscape. In particular, Pinterest is up against a credible threat with the rise of TikTok when it comes to social commerce. The idea that you could be inspired to shop by browsing media shared by others is an experience that Pinterest, in a way, helped pioneer, with its pinboard-style website where users often saved ideas of things they were considering buying or trying.
But these days, the more common refrain among influenced and inspired shoppers is “TikTok made me buy it,” not “I found it on Pinterest.”
That’s a challenge the company understands it must overcome in order to establish its site as a destination for the next generation of online shoppers.
The company on Wednesday reported fairly solid earnings, pulling in $575 million in revenue versus $573 million expected and delivering earnings per share of 10 cents instead of the 4 cents expected. But one troubling area was its decline in users. The company reported its global monthly active users decreased 9% from the same period last year to 433 million in the quarter, below expectations of 437.9 million.
Investors drilled into the user decline on the subsequent earnings call with a focus on better understanding how Pinterest was standing up to the TikTok threat.
Pinterest explained it’s been investing over the past year and a half in its new video-powered features, like Idea Pins — a sort of video-first mashup of both TikTok-stye short-form video content and tappable Stories.
These Pins are aimed at attracting creators to Pinterest’s site, allowing them to record and edit creative videos with common tools like voiceover recording, background music, transitions and other interactive elements. But the Pins can also include pages of content where creators can add instructions, like the steps to perform a DIY project or the ingredient lists for a recipe. This makes the Pins more purpose-driven and actionable compared with some of the content on primarily entertainment-focused destinations, like TikTok or Instagram Reels.
Pinterest acknowledged it had to do a significant amount of work to catch up to where the market was headed with video but believed it’s now starting to see some traction.
The company said its shift in focus to video had come at the expense of some monthly active users in the short term, but it’s taking the risk in order to get the new video-focused ecosystem off the ground. As a result, it’s seen the number of video Idea Pinners increase 15x year over year and noted the feature was attracting a more engaged audience. Pinterest also said it’s seen over 25% growth in the save rate of Idea Pins quarter over quarter. And Pinterest users who follow multiple video creators on the site tend to visit Pinterest more often than those who do not, the company shared.
“This is also strategically important because we think video as a format is just fundamental to the way people get inspired and take action in the future,” noted Pinterest CEO Ben Silbermann.
Pinterest is also planning to further develop new publishing features for video, including by leveraging its most recent acquisition Vochi, which will help creators make better videos that are more likely to inspire action. It’s said it’s planning to expand its creator rewards, had launched a Pinterest API for shopping and began beta testing a new feature called Your Shop, which offers a personalized experience to users by connecting them with products they may like.