Pinterest Jumps Into Video-Ads Fray
August 17 2016 - 8:20AM
Dow Jones News
Pinterest Inc. is forging into video advertising, a potentially
lucrative business that also is rife with competition from rival
social-media players.
The image-discovery service said it would begin displaying
promoted videos, allowing marketers to pitch their wares in video
spots that can run as long as five minutes. The beta version will
be available Wednesday, the company said.
Pinterest will present the ads differently than on Facebook and
Twitter, where the ads automatically start playing without sound as
users encounter them within their news feeds. On Pinterest, the
video ads that appear as previews in a user's feed would play as
quickly or slowly as the page is scrolled, stopping when the
scrolling stops.
Clicking on a video would produce a new page where the ad would
play with sound. Underneath the video, marketers could place as
many as six "featured pins" that could highlight specific products
related to the video, like an appetizer accompanying a featured
dinner recipe.
Pinterest is the latest web company to aggressively chase
digital-video ad dollars, battling more established peers like
Alphabet Inc.'s YouTube, Facebook Inc. and Twitter Inc., and
fresher faces like Snapchat Inc.
As more consumers cut the cord, marketers and their massive TV
budgets are following them to smaller screens. Advertisers are
projected to spend $12.82 billion on digital-video ads in 2018, up
from $7.7 billion last year, according to research firm L2.
"I think there's plenty of room for all of us to play, and
everybody's got their strengths," said Jon Kaplan, Pinterest's head
of global sales.
Pinterest believes its strength lies in user intent. People go
to the site to discover new ideas on topics such as fashion, home
dé cor and weddings by browsing through millions of images, or
"pins." Pinterest shows those users advertisements that coincide
with images that show up in their home feed.
Because many people use Pinterest to research specific projects
like making dinner or decorating a nursery, the site can more
easily predict their interests or catch a person in the mood to buy
something, such as the lipstick featured in a how-to style
video.
Pinterest has already tested the video-ad product with 12
partners that include Universal Pictures, General Mills's Old El
Paso and L'Oreal's Garnier haircare brand.
Old El Paso tested a 30-second recipe video on how to make mini
churro taco boats—a cinnamon churro crust filled with yogurt and
fruit. "This is just one video so we can only draw so much from it,
but we were excited to see that people were engaging and spending
time with the pin differentially," said Michelle La Berge, senior
marketing manager at Old El Paso.
The number of people who watched the video to the end exceeded
the company's expectations, Ms. La Berge said, but she declined to
disclose the specific video-viewing completion rate. She also
declined to say whether the brand would buy video ads on Pinterest
in the future.
Pinterest has been ramping up its ad business over the past few
years in a bid to justify the $11 billion valuation investors
assigned it in 2015. Last year, the company generated roughly $100
million in revenue, a person familiar with the matter has said. In
March, Pinterest hired Mr. Kaplan, a 12-year Google Inc. veteran
where he worked on ad sales at YouTube, to bolster its ad
offerings.
U.S. and U.K. businesses that already work with Pinterest will
initially have access to the promoted video. The ad would typically
appear in the fourth slot in the user's home feed as well as when
users are scrolling through category feeds.
Write to Yoree Koh at yoree.koh@wsj.com
(END) Dow Jones Newswires
August 17, 2016 08:05 ET (12:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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