Saturday, August 30, 2014

Pinterest Business Model Canvas

If you look at the most successful [Web] companies, they really find a great intersection between what people are there to do and what advertisers want to do. They make it pretty transparent.”
Ben Silbermann, CEO Pinterest1


Executive Summary
If Pinterest is to survive on advertising, the focus should be on seamlessly integrating the user purpose and experience with the advertiser’s goals2. The site also needs to be transparent about its model to respect its user base. Pinterest’s current users can be split into 2 main camps: Inspiration-seekers3 (those who come to the site to be inspired) and Influencers (those who are heavy users of the site and have significant followings). Influencers will serve as intermediaries to help better connect the purpose of the Inspiration-seekers with that of the advertisers, without having advertising content come off as too contrived. The benefit to Influencers is receiving a payment for agreeing to feature up to 20% promoted content on their Pinterest boards. The benefit to the Inspiration-seekers is that the integrity of the experience will be preserved while at the same time suggesting additional inspirational content through advertising. To preserve the experience, Advertising content has to be seamlessly woven, such as: 1) paid search which suggests content related to the user’s search 2) “You might also like” suggestions based on user’s recent pins 3) “Pinterest suggests” items based on user’s past search history. This Free/Advertising model is a viable proposition, with a unique Multi-Sided platform twist by using the Influencers as an intermediary between the Advertisers and the Inspiration-seekers to help preserve the Inspiration seeker experience4.



Sources:
1 MacMillan, Douglas, Jan. 21, 2014. “Pinterest CEO Lays Out Growth Plan.” Wall Street Journal.
2 This is the beauty of the Google business model: users are Googling for a purpose, and the paid advertisements Google shows are related to what users are actually seeking so both advertiser and user benefit. Facebook’s business model is more challenging because advertisements on a friend’s sharing site may feel more intrusive.
3 “Inspiration-seekers” and “Influencers” are terms I developed
4 Osterwalder, Alexander & Pigneur, Yves, 2010. Business Model Generation.


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