Thanks; Benjamin Pimentel& MarketWatch
Oct. 24, 2013, 1:13 p.m. EDT
SAN FRANCISCO (MarketWatch) — Pinterest’s $3.8 billion valuation based on a new round of financing disclosed this week is based on the social media site’s strong growth potential, especially when it comes to brand advertising and reaching female consumers.
In fact, one ad industry executive said Pinterest, in which users “pin” their favorite online images and which is not yet known to be recording impressive revenue, could match and perhaps even surpass the other giants of social media, Facebook Inc. FB +1.50% and Twitter Inc. TWTR 0.00% .
“Ad execs in agencies and brand advertisers are quite excited about the potential to advertise with Pinterest, as it is somewhat better suited to support brands than Facebook, whose ads are a mix of text and images, or Twitter, [with] text-only ads,” Marc Poirier, executive vice president at the digital marketing agency Aquisio, told MarketWatch.
That’s because Pinterest is “designed to share images that people like, which is perfectly suited for brands,” and “if they follow in the footsteps of Twitter and Facebook, their native ad format will follow their feed capabilities, which means their ads will likely be images,” he added.
Agathe Blanchon-Ehrsam, an executive at Vivaldi Partners Group, a marketing consultancy company, called Pinterest “a fantastic tool to help brands build social currency.”
For one thing, the site helps brands by “telling stories that people can connect to.”
“Pinterest drives more referral traffic to our clients’ websites than all other social media networks combined,” she told MarketWatch.
Poirier said that given its size Pinterest still has “a long way to go to catch up with Twitter on sheer size of opportunity for marketers.” Twitter currently has more than 215 million monthly active users. Facebook has more than a billion users. Pinterest has about 25 million users.
But he also said of Pinterest: “The quality of their audience is undeniable.”
He cited Pinterest’s huge base of female users. “Half of them say they have gone on and made a purchase based on something they saw on Pinterest.”
Roughly 70% of Pinterest users are women, according to a survey done by eMarketer. Even more significant, given the growing importance of smartphones and tablets, 80% of the site’s mobile users are women.
Clark Fredricksen, vice president at eMarketer, said Pinterest is drawing particularly strong attention from direct-response advertisers and retailers.
“Because of the nature of Pinterest’s platform and audience, advertisers are exploring whether Pinterest is effective as a direct response channel—in other words, a venue from which they can get people to click on ads and make a purchase immediately after doing so,” he said.