- Pinterest reported double-digit growth in users and revenues in its Q3 2020 earnings.
- Pinterest said drivers of its strong revenue growth included investments in adtech, marketers prioritizing positivity and brand safety, and the expansion of shopping opportunities.
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In another sign of an advertising rebound, Pinterest posted double-digit growth in users and revenues in its Q3 2020 earnings this week, with worldwide revenues rising 58% year over year (YoY) to $443 million and global monthly active users (MAUs) increasing 37% YoY to 442 million.
Its growth is in line with our current expectations for the platform—worldwide annual ad revenues will grow by 25.2% in 2020 and the platform's total US users will increase by 26.5% to 88.0 million. Pinterest's stellar results come after Snapchat and LinkedIn both posted Q3 revenue and user increases over the last two weeks.
In addition to an improving macro environment, Pinterest said drivers of its strong revenue growth included:
- Investments in adtech that helped attract substantial spending from small- and medium-sized businesses (SMBs). Over the past year, Pinterest has been focused on conversion optimization and auto bidding, with the goal of automating a greater portion of its ad process. This emphasis has been particularly attractive to businesses working with smaller budgets and more performance-oriented direct-to-consumer (D2C) brands.
- Marketers increasingly prioritizing positivity and brand safety. After major brands began boycotting Facebook and Twitter over brand safety concerns in July, Pinterest—traditionally perceived as a brand-friendly platform—benefited from shifting budgets when these brands accelerated their spend on the image-sharing platform in Q3. This boost was further compounded by the US election, which has similarly been pushing marketers toward brand-safe channels, although we don't expect this trend to continue as strongly in Q4.
- The expansion of shopping opportunities amid the current ecommerce wave. Pinterest has been actively working to expand the volume of shoppable content, like introducing new shopping tabs in search and making it easier for retailers to upload their catalogues to the platform. These developments have helped Pinterest capitalize on the surge in ecommerce activity during the pandemic, which will likely continue to support the platform's growth during the upcoming holiday season.
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