Pinterest’s advertising business growth accelerates and is favored by Generation Z

Revenue Forecast

According to Warc Media, Pinterest’s advertising revenue is expected to reach $3.6 billion in 2024 (a year-over-year increase of 17.3%) and will maintain this growth rate in 2025, with total revenue expected to reach $4.2 billion next year.

From an audience perspective, Pinterest surpassed 500 million users for the first time in the first quarter of 2024, and its monthly active users now stand at 518 million.

Report author Celeste Huang of Warc said: “Pinterest has long been known for upper-funnel discovery, where users go to find inspiration. However, Pinterest’s audience has high commercial intent. Its advances in shopping capabilities and AI – as well as a focus on satisfying users’ ‘multi-session journeys’ – have begun to pay off, and moves into performance are attracting more investment. Advertisers’ trust in Pinterest’s sustainable growth and understanding of its competitive positioning are rising.”

Warc Media’s latest Platform Insights Report provides evidence-based insights into the challenges and opportunities facing Pinterest and outlines the key data points advertisers need to know about the platform’s investment, consumption and performance.

Investment: Pinterest’s advertising revenue is expected to reach $3.58 billion in 2024 and $4.2 billion in 2025

Pinterest is often mentioned alongside Snapchat and Reddit as a “smaller” platform, distinct from digital giants like Meta and TikTok. However, Pinterest will maintain strong growth momentum in the second half of 2024. The platform has perfected its position in the competitive social media market: not only is it effective at upper-funnel discovery, but it also leverages advanced ad formats to attract users with high commercial intent.

Warc Media predicts that Pinterest’s global advertising revenue will reach $3.6 billion this year (up 17.3% year-on-year) and $4.2 billion by 2025 (up 17.1% year-on-year)

Pinterest’s low-funnel revenue growth rate “nearly doubled” compared to the fourth quarter of 2023. Its monetization strategy is similar to that of its other digital peers: leveraging new formats and new products to increase user engagement and grow ad volume and impressions.

Pinterest’s growth has been strongest lower in the funnel, primarily in the U.S., and with the “largest, most sophisticated advertisers,” the platform claims. These brands are often “faster” to adopt new ad tools. Emerging categories such as tech have driven the biggest growth in the U.S., while WARC Media predicts that the retail category will spend $575 million on Pinterest globally by 2025.

Consumption: Pinterest’s MAU surpasses 500 million for the first time.

Generation Z is now Pinterest’s largest and fastest-growing group, accounting for 40% of all Pinners. Data from Qustodio on social media usage among children and teens shows that Pinterest usage surpassed Instagram in the US, UK, Australia and France last year. Young users use Pinterest for planning and shopping, and are quick to respond to new content formats such as collages.

The platform has long been known for brand discovery and product inspiration. Pinterest users are open to new ideas: 96% of the top searches on Pinterest are not brand-related. However, Pinterest is currently refining its content and shopping strategies to further enhance performance and consumers’ journey from inspiration to action.

With 55% of users viewing it as a “place to shop,” Pinterest is looking to position itself as a “more positive alternative” to other digital environments, especially as social platforms focus on entertainment and relationships migrate to messaging apps.

New formats like collages are critical to achieving these goals: collages are shoppable, and users are 3x more likely to save a collage than any other format on Pinterest. Nearly 70% of Gen Z create a collage. This helps create human curation signals that inform Pinterest’s AI to deliver more customized ads.

Performance: Attribution models underestimate Pinterest’s revenue contribution

Fospha’s research found that Google Analytics significantly underestimated Pinterest’s revenue contribution, with Last Click accounting for only 1.3% of its impact. The study concluded that the most optimized brands on Pinterest spend 23% of their budgets on awareness and consideration and adopt an “always-on” strategy.

According to Nest Commerce, Pinterest’s cost per acquisition has dropped 60% year over year, while its conversion rate continues to grow. Leveraging keyword and interest targeting is critical to low-funnel success.

Pinterest itself shares data showing that it can bring advertisers a 28% increase in conversion rates and up to 96% increase in traffic. Multi-format ads are very important here: According to Pinterest, brands that use video in Collection ads have seen a 44% increase in ROAS compared to static Collection ads.

Additionally, both advertisers and users have a positive view of Pinterest’s advertising proposition. Kantar’s advertising equity metric shows that Pinterest’s score has improved between 2021 and 2023, meaning consumers are less likely to have a negative view of ads on the platform. Pinterest was also ranked as the second favorite advertising platform for U.S. consumers, with ads seen as “very relevant and useful.”