While eCommerce has seen a big rise in activity as a result of the pandemic, it seems that at least some aspects of online shopping are now returning to the mean, with Pinterest’s active user count dropping once again in Q4 2021, the app’s third consecutive quarter of declining user growth.
As you can see in this chart, Pinterest’s monthly active user count has fallen from 478 million at the start of 2021, to 431 million now, a decline of 47 million active users throughout the year.
That’s a significant drop, and while 431 million actives is still a lot, the fact that Pinterest has lost almost all of the growth momentum that it gained over the past two years (Pinterest hit 416m MAU in Q2 2020) is not a good reflection of any utility and/or value that users are seeing in the app, as it hasn’t been able to keep these people on as regular users, even as it continues to branch out into new regions.
Indeed, that’s been one of Pinterest’s key value propositions, that while it may not have as many users as other social apps, those that are regular Pinners find big value in the platform, with 90% of weekly active Pinners using the app to inform their purchase decisions. That still could be true for its most dedicated users, but if Pinterest isn’t carrying that value over to new audiences, as reflected in its retention and growth stats, that could suggest that it’s failing to capitalize on that potential, and win over a bigger market share for the many brands that are trying to reach their target buyers in the app.
And Pinterest has made a more concerted effort to win over more users, and capitalize on its growth momentum, as reflected in its ‘Sales and Marketing’ spend.
Pinterest knew that it would lose momentum as a result of physical stores re-opening, and COVID restrictions easing around the world, so it made a bigger push to maximize its opportunities through a new branding campaign, in the hopes of stimulating more interest.
Based on the user counts, that hasn’t been overly effective, which is a concerning sign for the app’s growth potential moving forward.
But then again, its revenue figures did improve on the back of increased interest from retail advertisers leading into the holiday period.
As you can see here, the platform brought in $847 million in total revenue for the quarter, with the majority coming from the US. Pinterest is, however, seeing more significant revenue growth momentum in international markets, another potentially good sign.
It’s also posted some solid revenue per user stats, which reflects rising advertiser interest in the app’s audience.
Generating more money per user, however, does essentially come down advertiser interest, and if Pinterest continues to lose growth momentum, it will struggle to maintain these gains over the coming year.
In terms of functional additions, Pinterest expanded its in-app shopping tools to 13 international markets in 2021 (Pinterest says user engagement with shopping surfaces in the app grew 20% YoY), while it also put a big focus on making it easier for merchants to upload their product catalogs, in order to list their products as shoppable Pins.
Streamlined onboarding is key to getting more products into its ecosystem, and with Pinterest also working to improve its search and discovery tools, this is a big element in building out its platform as a central eCommerce destination. Better matches and more options is what, ideally, will keep Pinners coming back, and if Pinterest can generate more sales results for the brands that are using its listings, that will keep things moving in the right direction, at least on this front.
Pinterest is also trying to build more incentive for Pin creators, with its own creator funding program, which will help to get more practical, valuable content into its ecosystem, and keep Pinners coming back. That seems like a harder road for Pinterest, given that it’s not focused on entertainment, as such. But it does also need its most popular creators to remain active, in order to give its users more Idea Pin and Watch tab content to check in on.
But there are some clear challenges ahead in building on its opportunities, and stemming the flow of users away from the app.
In some ways, the fluctuations of the past two years have been entirely unpredictable, so who can say for sure what impact each consumer shift and lockdown has had on overall behavior? But if Pinterest loses all of the growth that it gained, that’s a significant impact, especially given other social apps have continued to grow throughout the period.
Does that mean that Pinterest is losing attention, and user interest? Again, 430 million users is still a lot, but if Pinterest drops below 400m, a retraction on its pre-COVID levels, that would be a disastrous result.
Though Pinterest does also make this note, which is interesting:
“In addition, lower search traffic (driven by Google’s algorithm change in November) negatively impacted our MAUs on a year-over-year basis. In fact, we believe lower search traffic was the primary reason for the sequential decline in MAUs from Q3 to Q4 in both the US and international markets.”
That’s seemingly in reference to Google’s Core Update, launched in November, and could reflect concerns from some search marketers that Google now seems to be crawling less content, meaning that websites with a lot of updates lost some of their SEO advantage. It’s hard to say, however, what the full impacts on Pinterest have been – but it clearly believes that the update has negatively impacted Pin performance.
Which is also interesting when you consider that Pinterest and Google are both looking to capitalize on shopping searches, with Google regularly updating Google Images and its visual search tools along similar lines to Pinterest’s advances.
Could it be that Google’s punishing a potential competitor, or using its update as a reminder for Pinterest to stay in its lane and not push too hard on siphoning off search traffic?
It’s an interesting consideration either way, and it’ll also be interesting to note whether Pinterest gets less referral traffic from Google moving forward – and how that impacts its overall performance.
Elon Musk’s Team Asks for More Data to Complete Assessment of Twitter Bots
Okay, let’s just check in on the latest with the Twitter/Elon Musk takeover saga, and where things are placed to close out the week.
According to the latest reports, Musk’s team recently asked Twitter for more tweet info, in order to help it make an accurate assessment of bot activity in the app. This comes after Musk questioned Twitter’s claim that bots and fake accounts make up only 5% of its active user base, and said that his Twitter takeover deal could not go ahead unless Twitter could produce more evidence to support this figure.
Which Twitter did, by providing Musk with access to its ‘full firehose’ of tweets over a given period, which it shared with Musk’s team back on June 8th. Musk’s group has now had that data for a couple of weeks, but this week, it said that this info is not enough to go on, and that it needs even more insight from Twitter to make its judgment.
And after initially resisting calls for more data access, Twitter has now reportedly relented and handed over more tweet data access to Musk’s team.
Which may or may not be a concern, depending on how you see it.
In its initial data dump, Twitter reportedly gave Musk’s team info on:
- Total user tweets (within a given time period)
- Data on which devices were used
As noted, Musk’s team says that this has not provided it with the insight that it needs to conduct an accurate analysis of potential bot activity, so Twitter has now provided Musk with more ‘real-time API data’.
It’s not clear whether that means that Twitter has provided everything that its API systems can provide, but that could mean that Musk’s team can now access:
- Real-time info on tweet text and visual elements/attachments
- Data on retweets, replies, and quote Tweets for each
- Data on tweet author, mentioned users, tagged locations, hashtag and cashtag symbols, etc
- Date, time, location, device info
That should satisfy any analytical needs to uncover potential bot trends, and get a better handle on Twitter’s bot problem, though it also means that Musk has all your tweet info – which, again, it’s worth noting, Twitter up till now had been hesitant to provide.
I’m sure it’s fine. Musk’s team is beholden to disclosure laws around such, so it’s not like they can do anything much with that info anyway, in a legal sense. But the idea that the sometimes erratic Elon Musk now has all the tweets could be a little concerning for some.
But Twitter likely had to provide what it can, and if Musk is going to become CEO of the app soon anyway, he’s going to have access to all of that data either way.
Should be fine. No problems – no need to go deleting all your DMs (which are likely not included in the data that Twitter has provided at this stage).
According to reports, Musk’s team says that it now has the info it needs to make its assessment of bot activity, which should see the deal move forward (or not) sometime soon.
Of course, no one knows what exactly is going to happen next, and whether Musk’s team will look to renegotiate, or even back out of the deal entirely as a result of its bot analysis. But it does seem like, one way or another, Musk will be forced to go ahead with the $44 billion transaction, with Twitter’s past bot reporting methodology already accepted by the SEC, giving it legal grounding to argue that it’s acted in good faith, regardless of what Musk’s team finds.
The next steps then, according to Musk, would be securing debt financing and gaining Twitter shareholder approval, clearing the last hurdles for Musk to change the app’s name to ‘Telsla Social’, and add a million references to ‘420’ into the platforms various terms and conditions.
Because of the memes, because weed jokes are still funny to the richest man in the world – because he vacillates between inspired genius and a massive nerd who now gets to play out some fantasy of being cool.
Or something. Who knows what goes on in Elon Musk’s head – which is also why most are hesitant to bet against him, as nobody knows if and how he might be able to fix Twitter, and whether this is a great investment or a massive disaster.
It seems like we may soon find out. Maybe. Who knows. Either way, the memes should be great.
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