Bloomberg News

Pinterest Rolling Out Self-Service Advertising

June 05, 2014

Pinterest Inc., which was valued at $5 billion last month, is opening up its advertising to all users as the scrapbooking website seeks additional revenue.

The 4-year-old startup, which first started making money off of marketers in May, is testing a new program where any person or business can pay to promote their posts, known as pins, so they get viewed by more Web users, the San Francisco-based company said in a statement today.

The self-serve ad product is projected to help generate revenue from small businesses and individuals, Pinterest said. It’s the same kind of service that helped Google Inc. (GOOGL:US), Facebook Inc. (FB:US) and Twitter Inc. (TWTR:US) build an early revenue stream, and remains critical to sales for those Internet companies in their early days.

“It was super important for Facebook -- it’ll be really important for us as well,” Don Faul, head of operations at Pinterest, said in an interview. “The things that people discover on Pinterest come from really big established brands, but also from very small businesses.”

Pinterest will let advertisers target consumers by analyzing their interests based on the images that they’re pinning, Faul said. People use Pinterest to gather online pictures related to what they’d like to buy, make or do.

The targeting takes into account the depth of someone’s interests. For example, Pinterest is honing the ability to tell the difference between someone who is planning a trip to France soon, and someone who dreams of one day traveling around the world, he said. The new ad product is still in a trial period, with brands including Vineyard Vines LLC and Shutterfly Inc. testing it out.

Pinterest, which has yet to start generating significant sales, has been spending to improve its products and expand around the world with the $200 million it raised from investors in May. The company has a total of $764 million in funding from investors including SV Angel, Bessemer Venture Partners, Fidelity Investments, Andreessen Horowitz, FirstMark Capital and Valiant Capital Partners.

Bloomberg LP, the owner of Bloomberg News, has invested in Andreessen Horowitz.

To contact the reporter on this story: Sarah Frier in San Francisco at sfrier1@bloomberg.net

To contact the editors responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net Reed Stevenson, Jillian Ward


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