Pinterest has shared its latest performance update which shows a continued decline in active users as a result of more regions coming out of lockdown, and shoppers returning to physical stores, while revenue remained steady, despite challenges in the market.
First off, on usage – Pinterest’s total MAU count declined to 444 Million in Q3, down 10 Million on the previous reporting period.
Image Credit: Pinterest Report for Stakeholders
As you can see here, its Q2 numbers were down 24 Million MAUs before that, so over the past two periods, after a long stretch of steady growth, Pinterest has lost some 34 Million active users overall.
That’s not a good sign – but then again, the volatile market conditions, as a result of COVID, are tough to predict, and of all the social platforms, Pinterest, with its focus on shopping, was always the most likely to be hit hard by the re-opening of physical stores.
During the lockdown period, in which Pinterest added over 100 Million more active users. The platform touted itself as a virtual shopping mall, and a replacement for IRL browsing – this drove major growth, but the downside now is that with actual shopping malls opening back up, the utility of Pinterest is going to be lessened, at least to some degree.
As Pinterest explains in their report:
“As lockdowns eased, people have embraced life outside their homes, a trend that caused a dramatic decline of our year-over-year growth rate of monthly active users (MAUs) in Q2 and Q3, as consumer preferences shifted away from our core at-home use cases.”
This will be the main storyline of the platform’s Q2 report, but there is reason for optimism in other elements, and there is also an argument to be made that Pinterest should not be measured on usage growth in the same way that other social networks are, as it’s not as reliant on the same for its business growth.
That’s somewhat reflected in Pinterest’s Average Revenue Per User numbers, which increased once again in Q3.
Its international ARPU growth is still very minor, but Pinterest is still in the process of rolling out its shopping tools in more regions, while its US APRU continues to steadily increase.
Again, the argument here is that Pinterest has more opportunity make money from shopping activity, as opposed to relying on broader exposure to ads, because the focus is on incentivizing direct action with each Pin, instead of reaching the widest possible audience.
Pinterest does, of course, still generate its revenue from Ad exposure, but the focus of the app is different, which could lessen the impact of slower growth, if Pinterest can maximize the users that it does have.
“Shopping engagement remains robust, with the number of Pinners engaging with shopping surfaces up more than 20% quarter over quarter and up 60% year over year.” we gather from the report.
Pinterest is still developing this, but if it starts to take fees on purchases, for example, and if it can drive better sales results for certain verticals, it still has major potential for revenue growth, even with lower comparative usage rates.
In terms of revenue, its Q3 intake was up 43% year over year to $633 Million. Indeed, Pinterest’s generating more direct sales for more businesses than ever, and at 444 Million MAU, it’s hard to ignore that potential.
And as it continues to bring its shopping tools to more regions, its opportunities continue to grow. It may not be the best result for Pinterest right now, but its ongoing development, innovation and growth may still lead to big opportunities.
Follow @itp.live for more.