Under CEO Bill Ready, Pinterest secured a deal with Amazon (AMZN) as its first partner to show third-party ads on the site, in an effort to boost revenue, the company announced yesterday (April 27).
“This milestone partnership will add to the great brands already on the platform and provide more comprehensiveness, shoppability, and a best-in-class buying experience for users, along with greater performance for brands and advertisers,” Ready said in a company statement.
Since the board appointed Ready in June, he has worked to revamp Pinterest’s advertising business, and analysts are taking notice. Last month, analysts at Switzerland-based investment firm UBS published a report crediting Ready with engineering a “philosophical shift” at Pinterest that will help it earn more revenue. The company, which sells ad space to earn money, has struggled to earn a profit in recent years.
In January, Pinterest secured a deal with LiveRamp, a California-based software company, to improve the site’s data sharing capabilities. Since Ready joined the company, it has also increased the number of ads a user sees while shopping. Ready formerly worked as Google’s president of commerce and Venmo’s CEO.
The announcement came as Pinterest reported its earnings for the three months ending March 31. Its revenue of $603 million beat estimates from analysts and is 7 percent higher than the same period last year, but the company lost $209 million, in part due to restructuring charges. The loss is more than double what it lost the entire 2022 year, according to company financial statements. Pinterest’s stock fell after the company released earnings, trading today at $22.26, or 18 percent below yesterday’s closing price.
How Amazon ads on Pinterest will work
Pinterest hopes the move will help users find new and relevant products on the site, according to the company statement. Users will be directed to the Amazon online store to purchase items. Consumers shouldn’t expect to see Amazon ads on their Pinterest feeds in the near future. Pinterest will begin working on the ads later this year, and it will take many months for the implementation to be complete, the company said.
Amazon’s ad business has continued to grow through a slowed advertising economy. In the three months ending March 31, the company made $9.51 billion from its ad services, up 21 percent from the same time last year.
“Amazon Ads is delighted to partner with Pinterest and make it even easier for customers to discover and buy relevant products through shoppable content, while also providing differentiated value for brands,” said Paul Kotas, Amazon’s senior vice president of advertising, music and IMDb.
