Former product manager at Pinterest Inc
- Pinterest's (NYSE: PINS) user and monetisation growth strategy, noting the impact of coronavirus and exiting the pandemic
- Newer content, video and e-commerce offerings and the importance of content creators, noting execution and competitive challenges
- Competitive landscape and Pinterest's positioning vs big digital advertising companies and smaller firms focused on the area
- Corporate governance, focusing on management turnover and employee morale
- 1-3-year outlook, highlighting opportunities and risks
Could you provide us with an overview of Pinterest and how it’s evolved, especially over the last couple of years?
You talked about Pinterest’s demographic and subject matter focus areas for the company starting from its origins to some extent, and how it has looked to expand that. To what extent has it been successful in doing that and how much more can it do? I think the company has come under some level of criticism or questioning because of the tight focus and maybe niche-type platform and users associated with Pinterest as opposed to some of the other broader platforms. You mentioned the fact that Pinterest has really taken seriously this concept of trying to be a more positive influence on its users in society. How has it tried to expand beyond its initial core and how is it differentiating along those lines?
It sounds like what you’re saying is the demographics might broaden out as Pinterest has shifted more to a mobile focus vs desktop, but it does seem reasonable to expect that it will continue to focus on its core use cases or verticals, and you’ve gone through a number of them. It seems like with that being somewhat acknowledged that it is also looking to expand in terms of the ways that people interact with Pinterest, and I think you touched upon this to some extent, but I think it’s reasonable to think that two of the major initiatives for the company are in and around shopping and e-commerce, and then video. Could you expand on each of those, why it’s important and the progress the company has made there?
You’ve highlighted a couple of largely structural challenges Pinterest is looking to overcome. I guess I would summarise by saying one relates to the notion of catalogue management, one is connecting the notion of being able to see things and buy things and then one is related to elements of the user experience, consummate a transaction. How focused do you think the company is on addressing those issues, and how possible do you think it is for them to make improvements? One of the things that you seemed to quickly discount is this notion of a native checkout, and I think it’s fair to say that the company identified this as an issue, but maybe in some people’s opinions the company hasn’t really come up with a strong solution as quickly as a lot of people might have wanted. Why would you say that’s the case? Are there actually problems innovating around these areas? Is it a lack of capital, when you were talking about the company wanting to be conservative when it comes to certain types of investments? Is it a lack of an internal strategy and execution approach that’s cohesive? Why do you think these things haven’t been done?
How has Pinterest been approaching monetisation? What has the company done right, what could it do better and where might there be some structural issues that make those efforts far out or impossible?
MAUs are not the best for Pinterest. It’s not even an adequate way to assess a company such as Pinterest. What do you think the better metric or metrics are to track and forecast success at and for the company?
You talked about 90-120 million mDAUs. What might be the breakdown between domestic and international?
It’s worth noting in Q4 2021 that only 20% of MAUs were from outside the US. How do you think Pinterest approaches monetisation because I think one of the ways the company has been criticised over the last couple of quarters is that it doesn’t do a good enough job when it comes to monetisation. How would you respond to that? Is there more learning that it needs to do? Are there structural issues? What are some of the opportunities and risks?
You mentioned Pinterest has already been pulling on the pricing lever, and so there’s really not a lot of related upside. To what extent has pricing gone up? I assume by pricing you’re talking about something such as a CPM construct. Can you give us a sense of how much you think pricing has gone up? I think one of the questions that people have had around the company is the fact that Pinterest historically would underprice because it wanted to win business and gain some market share, so it had some pricing flexibility. How much of that discount, for lack of a better characterisation, do you think is dissipated at this point?
We did an Interview [Digital & Social Media Advertising – Q2 2022 Update & H2 2022 Outlook – 18 March 2022], where one expert indicated that pricing for a lot of digital and social platforms has in fact doubled just over the last year or two. If you add to that the fact that, as you reference, with IDFA, GDPR and Google making moves related to cookies, that it’s going to cause advertisers to think they are paying twice as much and are getting less value. How do you think Pinterest is addressing that?
Is there anything that Pinterest could or should do to address some of these issues that you’ve detailed in terms of everything from pricing and monetisation to ROAS?
You made a reference to the notion of conservative financial management. How does that square with whether substantial investment is probably, if not needed, then definitely warranted when it comes to these areas? Do you think that Pinterest has the wherewithal to not just identify but invest against these areas, if you will?
Q: Are people going to Pinterest for videos? Are they going to Pinterest as creators to produce videos? I wonder to what extent that becomes a pretty substantial challenge given that as they normalise the platform, and I think you mentioned it’s looking and feeling more like a lot of other digital and social media platforms, it loses that differentiation? Then if it’s all about videos, why not go some place that in fact is, you used a good construct earlier, I think a mobile-first platform, what about a video-first platform like a TikTok or like a YouTube? Why wouldn’t people just go there?
I think Pinterest was in the news quite a bit towards the end of last year as it was reported that PayPal was in talks to buy the company. I think PayPal actually announced that it wasn’t looking to acquire Pinterest. What did you think of that when you saw that? Did it make sense to yo? Do you think it still makes sense? Do you think Pinterest ends up being acquired, and who would make the most sense as an acquirer?
It sounds like what you’re saying is PayPal didn’t necessarily have a lot to contribute from a fundamental perspective, but any company that has leadership, and can focus on execution and, hearkening back to what you had said earlier, I think the ability to substantially invest would be the type of suitor that would make the most sense. Is that a right way to think about it? Does it need to be someone who’s more aligned with some of Pinterest’s focus areas and opportunities? I think about, for example, what they’re doing in and around e-commerce, for example, or focusing on the type of demographic or the type of use cases. Should we be thinking about a potential acquirer that better aligns like that?
You mentioned Pinterest would benefit from being acquired by a company with more effective leadership, and I think it’s something that you’ve alluded to throughout this conversation. Ben Silbermann is Co-founder, Chairman, President and CEO of the company. What it is about him that on one hand has helped Pinterest get to where it is now, and then I think, conversely, has delayed progress and made it challenging for Pinterest to fulfil its potential? I think in a prior Interview we did [see Pinterest – User Growth Challenges & Platform Transition – 5 November 2021] there was a discussion about a lack of a sense of urgency, which is a topic that’s come up from your comments. What are your thoughts about the current CEO and how he’s done and what needs to be improved on?
What can and should change as it relates to Pinterest? It sounds like an easy fix, which is probably not going to happen, perhaps. Is it Ben Silbermann just continuing on as Chairman but then installing someone else as CEO, or him bringing on a strong number two as a President or as a COO? I think the company previously had someone in that COO spot. Is it as simple as something like that or is it more? Where people are perceiving some of the issues, structural and otherwise, has that resulted in a lot of turnover in executive and management ranks? It’s not lost on me that it was reported earlier in 2022, that the company had lost at least seven senior executives in roles ranging from creator marketing to corporate development, and that’s consistent with what you were talking about. What can Pinterest do to address these issues?
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