Pinterest today announced a multi-year strategic advertising partnership with Amazon that aims to bring more brands and related products to its platform. The new deal will make e-commerce giant Pinterest its first-ever third-party advertising partner, the company said in a blog post shared alongside the company’s first-quarter earnings.
The partnership is a step in a new direction for photo-sharing and social media sites, which are adapting to changing consumer interests around product discovery in recent years. As demand grows on video platforms like TikTok and Reels, Pinterest’s image board is starting to feel stale, prompting it to launch Idea Pins for the first time and increase its investment in creator content.
But some of those creator efforts have waned recently, before a fourth-quarter revenue loss from Pinterest as the company also warned of lower first-quarter sales, sending its stock lower.
By comparison, Amazon’s digital advertising unit did well in the same quarter, jumping 19% to $11.6 billion.
Like other tech companies, Pinterest has been grappling with macroeconomic forces affecting its business, but it has promised that it is working to adapt to a changing environment. The company also laid off 150 employees in February, as it tried to reduce expenses.
While Pinterest has worked for years to connect product inspiration with purchases, the Amazon Advertising partnership has the potential to offer consumers a more seamless buying experience. Unlike some e-commerce sites, Amazon shoppers may not have to fiddle with filling out forms, as most already have their payment information on file with the company, resulting in faster checkouts.
When users encounter an Amazon ad on Pinterest, they will be taken directly to Amazon to make the purchase, Pinterest said.
“More than 463 million people come to Pinterest each month to create lives they love. Brands and products are an important part of that journey, enabling Pinners to move seamlessly from inspiration to action and advertisers to realize value in connecting with users with high commercial intent,” Pinterest noted. in her blog post. “Our partnership with Amazon will allow us to scale these efforts in meaningful ways,” she said.
The company indicated that the Amazon Advertising integration implementation will take place over multiple quarters, starting later this year. Pinterest can’t yet say where ads will appear to end users, nor is it making any near-term predictions regarding revenue impacts, indicating that it may not see a meaningful impact until next year.
“Amazon Ads is excited to partner with Pinterest and make it easier for customers to discover and purchase relevant products through shoppable content, while also providing distinct value for brands,” Paul Kotas, Amazon’s senior vice president, added in a statement.
Pinterest outperformed first-quarter revenue and earnings, with revenue up 5% year-over-year to $603 million, beating the $598 million expected, and adjusted earnings per share of $0.08, versus the $0.02 expected. Monthly active users globally were up 7% year-over-year to 463 million. The company also reported a GAAP net loss of $209 million, or 31 cents per share, an increase of 1 cent per share in the same period last year.
Despite the earnings outperformance, Pinterest stock fell 6% on higher second-quarter costs.
More is coming