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After reporting 11 quarters of consecutive user growth, Pinterest got hit, and the platform saw a decrease in overall users in the second quarter, although the revenue results for the period remained strong.
But users will be the main storyline here — as you can see here, Pinterest has lost 24 million users in the past three months, with U.S. users up 5% year-on-year.
According to Pinterest, the loss is largely due to the global rollout of vaccines and the reopening of physical stores, which has affected the adoption of e-commerce and online browsing.
As per Pinterest:
“Fewer MAUs came to Pinterest during the second quarter than we expected. The primary driver for a slower year-to-year MAU growth worldwide and year-on-year decline in MAU in the U.S. was the widespread easing of pandemic restrictions. As closures rise, people are spending less time at home in Q2 2021 vs Q2 2020. Since many of Pinterest’s most important uses (e.g. decor, garden, cooking, DIY) are particularly relevant at home, we believe we have benefited excessively from the long time we spent at home during pandemic locks. “
In other words, last year’s results were somewhat abnormal due to the pandemic, which means that these numbers will inevitably look bad in comparison. After all, 454 million overall users are stable, in terms of the long-term growth of the platform – it’s just that the addition of 62 million more users has not been sustainable in the past year, which amplifies the losses somewhat.
For context, the number of Pinterest users rose from 367 million in the first quarter to 416 million in the second quarter 20, the largest quarter-on-quarter increase in its history (49m). Without the subsequent pandemic influx, and based on the current number of users (454m), Pinterest would have achieved an average increase of 17.4 million new users per quarter over the past year, which would be considered good performance. But driving through the COVID-induced wave made it difficult with a much more variable and less favorable comparison.
The specific consequences of the reopening of retail are also underlined in the notes of Pinterest, and the platform explains that the biggest increase in usage numbers was due to fewer people logging in to the platform via the internet. Pinterest also says that web-based Pinterest users were ‘less involved and generating less revenue’ than Pinners using the mobile app.
“In the second quarter, MAUs on our mobile apps grew year after year in the US and grew by more than 20% internationally.”
So if you were targeting Pin users on the internet, or if your target market is primarily computer based, this may not be the best outreach option for your brand.
However, Pinterest notes that shopping and search engagement in general remain solid, so people are still discovering new products and brands and buying through the app.
This particular element benefits from the platform improved feed intake processes (uploading catalogs increased by 50% in the second quarter), which allowed more pens in the store and gave brands more opportunity to get their products in front of active consumers.
What this essentially means is that while Pinterest may not have as many users, the users that have it can generally be just as valuable, if it can continue to refine and improve, but are in-stream buying experiences.
This is largely reflected in Pinterest’s average revenue per user statistics, which increased on Q1.
So, even if it loses the reach of the audience, the people who use the app are still involved, which is a positive sign for the app.
Growth remains an important element, and Pinterest will have to get it back on track. But the figures reflect Pinterest’s a kind of market correction after the increase in internet usage last year due to the global shutdowns. As the wave recedes, we gain a more accurate perspective on what can be considered the true growth trajectory of each business – and in this respect, Pinterest is growing its core element by providing a platform for discovering and purchasing stores and for more marketing opportunities. to facilitate. .
The user statistics in the top shelves look bad, but the underlying performance figures still indicate a significant potential to reach prospective customers in the app.
Pinterest further notes that Gen Z Pinners is still very involved:
“U.S. MAUs under 25 have grown double-digit year after year, and have shown a particularly strong commitment to our new Native American content format, Idea Pins.”
Idea pens – what was Story Pins – fits the broader trends of Stories, so it’s no surprise if they become younger users. And the fact that Pinterest is experiencing a stronger engagement with this audience segment as e-commerce sales continue to increase is also a positive sign for future expansion.
Pinterest says that the number of Idea Pins created daily has grown more than 7x since the beginning of the year and that the daily impressions of Idea Pins have grown more than 10x in the same period. Worth considering in your strategy.
In terms of revenue, Pinterest brought in $ 613 million for the quarter, an increase of 125% year-on-year.
Pinterest says major advertisers’ interest in major U.S. retailers and travel brands in particular, while the continued expansion of its business tools to new markets has also helped boost revenue.
Again, the numbers here undermine the broader narrative, namely that the platform has lost users. Because it lost a surprising amount of MAUs – but with a similar perspective on Twitter’s ‘Monetizable Daily Active User’ numbers, while Pinterest may have lost an audience, it could also lead to more profitable users or people actually using the app to spend money.
If Pinterest can continue to deliver results, it’s a good opportunity to further reinforce and build on those results – but the concern, of course, is that the decline in audience will cause less interest in the advertiser. Therefore, Pinterest will need to emphasize the potential of its direct shopping options to retain its activities.
Looking ahead, Pinterest essentially said it did not know what to expect:
“Our current expectation is that Q3 revenue will increase to a 40% year-on-year low. We expect Q3 operating expenses to grow moderately quarter-on-quarter as we continue to increase investment in our strategic long-term priorities, with plans to resume our brand marketing campaign early in the fourth quarter.The headwind of engagement on Pinterest continued in July.The evolution of the COVID-19 pandemic and related restrictions is still unknown, and we are not giving guidance over the third quarter of 2021, as we unable to see certain key executives from engagement. “
It may therefore again report a decrease in users in the next period. That would be bad, but if Pinterest can continue to deliver for advertisers, and encourage advertising spending, and improve its shopping vouchers and direct selling options, and help businesses connect with users who are ready for spending, it could be good momentum for revenue growth and maximizes its ARPU numbers, which it can then point to as a positive sign of business endurance, despite lower audience pull.
But growth will be the key story and will remain the main focus until Pinterest can convince the market that it is not a problem. Because eventually, no matter how you look at it, it will be, and if Pinterest can not continue to grow and deliver branding results, its challenges may increase as the vaccine’s rollout continues worldwide.
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