Pinterest is cozying up to direct-to-consumer brands like SmileDirectClub and Care/of as they get priced out of Facebook and Instagram
Noom; Smile Direct Club; Samantha Lee/Business Insider
- Pinterest says it's created a "substantial" sales team over the past year aimed at getting direct-to-consumer brands to advertise on the platform.
- Its pitch comes as some DTC brands are looking to diversify outside of Facebook and Instagram.
- Some marketers said they're been spending more on Pinterest, in part because of optimization and targeting tools it's rolled out over the past year.
- Pinterest also has lower ad rates compared to other social platforms, according to a recent report from UBS.
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Pinterest is the newest go-to platform for direct-to-consumer brands.
DTC brands that built businesses from scratch on Facebook, Instagram and Google are increasingly looking for new areas to tap for growth, including Pinterest. SmileDirectClub, Care/of, and Noom told Business Insider that they've upped their spend with Pinterest over the past year while other brands like Away, Glossier and Rothy's have also been seen running campaigns over the past few weeks.
John Sheldon, chief marketing officer of SmileDirectClub, for one, said that SmileDirectClub has increased its Pinterest spend tenfold over the past year, without giving a dollar figure.
Pinterest's pitch to DTC companies
DTC brands still only represent a fraction of all ad spending, but Pinterest, Facebook and others are heavily courting startups in hopes they'll spend more on advertising over time as they grow into full-fledged brands.
Harold Klaje, Pinterest's head of growth and SMB said the company has built a "substantial" sales group, which he wouldn't number, that has focused on disruptor brands for the past year.
Pinterest has also made changes to its self-serve platform that's led some DTC brands to increase their spending on the platform. In April, Pinterest rolled out a conversion tool that lets marketers optimize campaigns for specific goals - like stronger leads and online checkouts. Pinterest also started giving marketers more granular metrics than video views. And in October, Pinterest introduced features that help advertisers create campaigns in three steps.
In its pitch to DTC brands, Pinterest says that it puts them on an equal playing field with big brands. According to Pinterest, 97% of the top 1,000 search terms on the site are unbranded, which theoretically makes it easier for consumers to discover DTC brands. 77% of Pinterest's weekly users find a new brand or product each week, according to the company.
"They clearly also have to often build up their brands - this is where we can help them," said Klaje. "Because we're so intent and discovery-driven, our disruptor partners have been able to find a lot of new clients on our platform that they have not been able to find on other platforms."
Ad prices have dropped more than other platforms
One reason DTC brands may be looking more at Pinterest is because of price. According to a recent UBS report, ad prices on YouTube and Instagram have steadily increased over the past year while Pinterest decreased.
The report surveyed 40 advertising executives who spend more than $90 billion on advertising. It found that 44% of marketers reported no change in Pinterest's ad pricing over the past year while another 30% reported a 1% to 5% increase. 14% of advertisers said that Pinterest's ad prices have dropped over the past year.
"It's a less expensive top-of-funnel platform compared to other social channels," said Sam Wheatley, marketing manager at Noom, a personalized weight-loss app. "We do see lower conversion rates to go along with that. All told though, Pinterest is a solid platform that delivers legitimate and stable scale."
In a statement about the UBS report, a Pinterest spokesperson said: "Since our ad platform is relatively young there is a significant opportunity for new and current advertisers, including direct to consumer brands, from a pricing and competitive perspective."
Here's a chart that shows how Pinterest's pricing compares to other platforms over the past year, according to the UBS report:
Measurement and tracking is improving
Some DTC companies said Pinterest's measurement improvements have led them to increase spending on the platform.
"The audience is the same but it's less about that and [more] about our ability to measure and optimize," said Matt Gehring, VP of growth at shoe maker Rothy's.
About nine months ago, SmileDirectClub started tracking multi-touch attribution, a way of analyzing each media company's contribution to sales. Until then, SmileDirectClub had been measuring last-click attribution, which only credits the media partner that got a consumer to click an ad and buy something.
"We were able to see the broad-based impact that Pinterest is having in the upfront part of the funnel," Sheldon said.
Collin Peck-Gray, senior marketing manager at vitamin and supplement startup Care/of, said the company has doubled its spend on Pinterest in the past year to diversify away from Facebook. As Facebook and Google move away from third-party data, he said that Pinterest is offering more granular targeting.
Creative success is a mixed bag on Pinterest
Pinterest still presents a learning curve for DTC companies. Finding the right creative is one issue. Pinterest isn't a direct-response platform that can crank out the conversions that performance-focused advertisers crave, because unlike feed-based social platforms, people often save Pinterest pins for months before buying something, Sheldon said.
For example, it typically takes SmileDirectClub takes six months to acquire a customer, so the company starts promoting ads with the words "by the holidays" during the summer.
"The critical thing with Pinterest is to give it the time to season," Sheldon said. "We have to look out 45 days before we see Pinterest pop and prove itself. It's not a DR platform - it has to be coupled with other work that we're doing."
Kirsten Samuelson, director of social at YellowHammer, a direct-to-consumer ad agency, said Pinterest campaigns also take longer to plan than Facebook because of audience testing and conversion tracking.
Marketers are trying a variety of creative approaches. Samuelson designs Pinterest ads to look like vertical display ads with promotional messaging. Others are repurposing existing creative from other platforms.
Care/of's Peck-Gray said that the vitamin and supplement startup has tried promotional and native creative on Pinterest. On desktop, promotional, display-like ads work better because they pop out of the feed, he said. On mobile, keyword-targeted ads blend more into content and benefit from looking like native content.
"Right now, most advertisers including ourselves are testing creative with a pretty wide brush," he said.