Pinterest said it is projecting Q4 revenue of $1.13 billion – $1.15 billion as it started gaining from its investment in AI solutions for retail brands and customers.
Unlike Pinterest, larger online ad platforms like Google, Meta, Reddit, and Snap reported robust Q3 revenue growth, driven by strong ad spending, Reuters news report said. Pinterest, meanwhile, faces intense competition from Meta-owned platforms, which attract more advertisers due to their larger user bases.
Pinterest has released its Performance+ suite in October, offering AI-driven tools and automation to improve ad targeting. However, CFO Julia Donnelly noted that advertisers are cautious about shifting budgets to new features during the peak holiday season.
Pinterest is experiencing reduced ad spending in certain sectors, notably among food and beverage advertisers.
Pinterest projects Q4 adjusted operating expenses to grow by 11 percent to 14 percent, driven largely by investments in AI and product innovation. This reflects the company’s commitment to improving its AI capabilities despite its smaller scale compared to larger competitors.
Pinterest’s Q3 revenue rose by 18 percent to $898.4 million.
Global monthly active users grew 11 percent to 537 million, surpassing estimates of 531.5 million, indicating continued engagement with the platform.
AI focus
Pinterest has made significant achievements in integrating AI across its platform, primarily to enhance user engagement and drive revenue. Here are key highlights:
AI is central to all content served on Pinterest, both organic and ads. The platform uses first-party data from its 0.5 billion users’ interactions, like saves, clicks, and searches, to train its recommendation models. These models generate over 400 million predictions per second, creating highly personalized content feeds.
Pinterest benefits from unique, intent-based signals as users curate boards and explore content over time. This helps Pinterest understand long-term purchase intent, enabling it to recommend content tailored to users’ evolving interests and tastes.
AI improvements doubled ad relevance over the past two years. Pinterest’s ad-serving algorithms align with users’ intent, enhancing user experiences by making ads feel more like useful content.
Pinterest’s computer vision technology makes images shoppable, and they leverage first-party data to fine-tune large language models, yielding a 300-basis point increase in actionable engagement. These advancements drive a seamless, actionable shopping experience across Pinterest’s boards, collages, and search.
Pinterest says tools like mobile deep linking and direct links streamline the path to purchase, enhancing ad performance. Pinterest’s lower-funnel product suite has doubled outbound clicks to advertisers for four consecutive quarters.
Pinterest’s AI-driven automation tools, launched recently, simplify campaign setup and improve cost efficiency. Performance Plus automates budgeting, bidding, and creative elements, reducing setup time by 50 percent and enhancing return on ad spend by up to 20 percent for shopping ad campaigns.
Pinterest has introduced shoppable tags and filters for products to enhance users’ shopping journey, expanding features like “Shop the Look” internationally. For fashion, Pinterest launched “Ways to Style,” allowing users to see styling inspiration and product recommendations.
To support advertisers, Pinterest enhanced its Conversion API (CAPI) and introduced clean rooms for improved measurement. Over half of Pinterest’s revenue now comes from advertisers using privacy-centric measurement solutions.
Through AI-driven strategies, Pinterest is effectively transforming its platform into a full-funnel, intent-driven shopping experience, benefiting users and advertisers
Baburajan Kizhakedath
