Pinterest’s latest performance update doesn’t give us very impressive numbers. Revenue did increase year-over-year but took a hit quarter-over-quarter. User growth has returned, though only slightly with 2 million more monthly actives in Q1.
Treading Lightly
Based on internal charts, Pinterest usage has significantly declined from its peaks during the Pandemic. Back then, Pinterest won the forced eCommerce push big time, attributing its success to the effects brought by lockdowns and other quarantine protocols. During its height, Pinterest saw up to 478 million users flocking to its platform to browse and shop. This has since gone down to 433 million upon the continued easing of restrictions.
“In Q1 2022, we continued to experience year-over-year engagement declines primarily due to pandemic-influenced growth in the year-ago quarter as well as lower search traffic (largely driven by Google’s algorithm change in November 2021). Time spent on competitive video-centric consumer platforms remains a headwind, particularly in our more mature markets. These declines were most pronounced for our desktop web and mobile web users, with mobile app users showing more resilience. The decline in global MAUs from February 1 to March 31 was primarily due to Russia’s recent invasion of Ukraine, and was particularly pronounced in Europe.”
On balance, this could suggest that Pinterest is stabilizing rather well, retaining a solid user base that it can continue to pitch ads to, while simultaneously improving its appeal to brand partners. Pinterest still has the focus to become a key shopping hub, where Google’s recent change could pose a problem.
Google looks to build in the same areas, with increased emphasis on product discovery and shopping. Google has the power to hurt Pinterest. What’s to stop the bigger player from bullying the smaller one if it feels like Pinterest is intruding on its turf? Then again, Pinterest is surely equipped to handle such a challenge, should the need ever arise.
In terms of revenue, Pinterest scored a better YoY, but at the cost of a lower QoQ, making it difficult to derive anything definitive. However, Pinterest points out that the decline in active users is likely the key cause. Again, as seen on its charts, Pinterest is also highly reliant on its North American market for revenue intake, pointing to more opportunities as it branches out to newer areas. There is still significant potential here, which requires just a little bit of extra digging.
There’s still an opportunity for Pins, even if numbers now don’t reach as high as they did back during peak pandemic. Either way, Pinterest still has an opportunity to carve a niche within the eCommerce sphere as Pinterest continues to evolve its discovery tools and newer elements like Idea Pins.
The Wrap
Just how big can Pinterest be? Well, perhaps the better question to ask is how big does it need to be in line with your personal needs and objectives? Depending on your target market, total usage might not even matter. While Pinterest’s growth slowly crawls back to higher levels, right now, it’s not really an essential platform. Nevertheless, it pays to have a strategy ready in the event that activity picks up once again.
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