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Pinterest Loses 24 Million Users as Lockdowns Ease and Physical Stores Re-Open Around the World

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After reporting 11 quarters of consecutive user growth, Pinterest has taken a hit, with the platform seeing a decline in overall users in Q2, though its revenue results remained strong for the period.

But users will be the key storyline here – as you can see here, Pinterest lost 24 million users over the past three months, with US users dropping 5% year-on-year.

Pinterest Q2 2021

The loss, Pinterest says, is largely attributable to the global vaccine roll-out, and the re-opening of physical stores, which has impacted adoption of eCommerce and online browsing.

As per Pinterest:

“Fewer MAUs came to Pinterest during Q2 than we expected. The primary driver of slower year over year MAU growth globally, and year over year MAU declines in the US, was the widespread easing of pandemic restrictions. As lockdowns lifted, people spent less time at home in Q2 2021 vs. Q2 2020. Given that many of Pinterest’s core use cases (e.g., decor, garden, cooking, DIY) are especially relevant at home, we believe we disproportionately benefited from increased time spent at home during pandemic lockdowns.”

In other words, last year’s results were somewhat anomalous, due to the pandemic, which means that these numbers will inevitably look bad in comparison. On balance, 454 million overall users is steady, in terms of the platform’s longer-term growth trajectory – it’s just that adding 62 million more users over the past year was not sustainable, which amplifies the losses somewhat.

For context, Pinterest’s user count jumped from 367 million in Q1 20 to 416 million Q2 20, the platform’s biggest quarter-on-quarter increase in its history (49m). Without the subsequent pandemic influx, and based on its current user count (454m), Pinterest would have posted an average increase of 17.4m new users per quarter over the past year, which would be considered good performance. But riding the COVID-induced wave has muddied that with a far more variable, and less favorable, comparison.

The specific impacts of the retail re-opening are also underlined in Pinterest’s notes, with the platform explaining that the biggest drag on its usage numbers was due to fewer people logging into the platform via the web. Pinterest also says that web-based Pinterest users were ‘less engaged and generating less revenue’ than Pinners who use the mobile app.

“In Q2, MAUs on our mobile apps grew in the US year over year, and grew by more than 20% internationally.”

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So if you were targeting Pin users on the web, or your target market is primarily desktop-based, it may not be the best outreach option for your brand.

Pinterest does, however, note that both shopping and search engagement, overall, remain solid, so people are still discovering new products and brands, and buying through the app.

This particular element has benefited from the platform’s improved feed ingestion processes (catalog uploads were up 50% quarter over quarter in Q2), facilitating more shoppable Pins, and giving brands more opportunity to get their products in front of active consumers.

Essentially, what this means is that while Pinterest may not have as many users, overall, the users that it does have may prove to be just as valuable, if it can continue to refine and improve is in-stream buying experiences.

That’s largely reflected in Pinterest’s Average Revenue Per User stats, which have increased on Q1.

Pinterest Q2 2021

So even if it is losing some audience reach, the people that are using the app are still engaged, which is a positive sign for the app. 

Growth remains a key element, and Pinterest will need to get this back on track. But the figures, as Pinterest notes, reflect a market correction of sorts, following the surge in web usage last year, as a result of the global lockdowns. As that wave recedes, we’re getting a more accurate perspective on what can be considered each company’s actual growth trajectory – and in this sense, Pinterest is growing its core element, in providing a platform for shopping discovery and purchase and facilitating more marketing opportunities.

The top line user stats look bad, but the underlying performance figures still point to significant potential to reach prospective customers in the app.

Pinterest further notes that Gen Z Pinners continue to be highly engaged:

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“US MAUs under 25 grew double-digits year over year and showed particularly strong engagement with our new native content format, Idea Pins.”

Idea Pins – which were Story Pins – align with the broader Stories engagement trend, so it’s no surprise to see them catching on with younger users. And the fact that Pinterest is seeing stronger engagement with this audience segment, as eCommerce sales continue to rise, is also a positive sign for future expansion.

Idea Pins

Pinterest says that the number of Idea Pins created daily has grown more than 7x since the beginning of the year and daily impressions from Idea Pins have grown more than 10x in the same period. Worth considering in your strategy.

In terms of revenue, Pinterest brought in $613 million for the quarter, a 125% YoY increase.

Pinterest Q2 2021

Pinterest says it saw particularly strong advertiser interest from large US retailers and travel brands, while the continued expansion of its business tools into new markets has also helped boost revenue intake.

Again, the numbers here subvert what will be the broader narrative, being that the platform has lost users. Because it has lost a surprising amount of MAUs – but taking a similar perspective to Twitter’s ‘Monetizable Daily Active User’ numbers, while Pinterest may have lost some audience, it may also be refining down to more profitable users, or people who are actually using the app to spend money. 

If Pinterest can continue to produce results, then it has a good opportunity to further solidify these results, and build from there – but the concern, of course, is that audience declines will result in less advertiser interest. Which is why Pinterest will need to underline the potential of its direct shopping options to maintain business activity.

Looking ahead, Pinterest has essentially said that it doesn’t know what to expect: 

“Our current expectation is that Q3 revenue will grow in the low-40% range year over year. We expect Q3 operating expenses will grow modestly quarter over quarter as we continue to ramp investments in our long-term strategic priorities, with plans to resume our brand marketing campaign in early Q4. Engagement headwinds on Pinterest have continued in July. The evolution of the COVID-19 pandemic and related restrictions remain unknown, and we are not providing guidance on Q3 2021 MAUs given our lack of visibility into certain key drivers of engagement.”

So it could well report another decline in users in the next period. Which would be bad, but if Pinterest can keep producing results for advertisers, and encouraging ad spend, and keep improving its Shoppable Pins and direct selling options, helping businesses connect with its spend-ready users, then it may well be able to maintain its revenue growth momentum, and maximize its ARPU numbers, which it could then point to as a positive sign of business endurance, despite lower audience traction.

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But growth will be the key story, and will remain the key focus until Pinterest can convince the market it’s not an issue. Because eventually, no matter how you look at it, it will be, and if Pinterest can’t keep growing and producing results for brands, its challenges could mount as the vaccine rollout continues around the world. 

Socialmediatoday.com

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Snapchat Announces New Features for Snapchat+, Provides Insights on Snapchat+ Take-Up

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Snapchat Officially Launches its New 'Snapchat+' Subscription Program

Snapchat has announced some new additions to its Snapchat+ subscription offering, while it’s also shared some new insight into Snapchat+ take-up, which provides some more perspective on the potential of such options in the broader strategic scheme.

Snapchat+, which it launched in late June, enables Snap users to pay $3.99 per month to access a range of add-on elements including variable app icons, new data insights, and the capacity to pin a user in the app as ‘your #1 best friend’.

And now, Snap’s looking to sweeten the Snapchat+ deal, with subscribers now also able to access:

‘Priority Story Replies, which makes your replies more visible to Snap Stars.

Snapchat+

‘Post View Emoji’, through which you can pick a dedicated emoji that you want friends to see after they view your Snaps.

Snapchat+

New Bitmoji Backgrounds including ‘gleaming gold’ and a beach paradise. 

Snapchat+

While there are also some new app icons thrown in for good measure, so you have even more ways to customize your Snap experience.

Snapchat+

I mean, none of these are groundbreaking additions to the current offering. But even so, Snapchat+ clearly holds a level of appeal, with Snapchat also reporting that it now has over a million paying subscribers that have signed up to the option.

That’s an extra $4 million per month going straight into Snapchat’s coffers – so while it may not seem like an amazing, compelling package to casual users of the app, the numbers show that, even at marginal take-up (1 million subscribers equates to 0.29% of Snapchat’s active user base), such options can be significant earners for the apps themselves.

If they can get them right.

These latest features now give Snapchat+ subscribers access to 11 exclusive in-app features, which bests Twitter Blue’s 9 exclusive elements. Not that it’s a competition, because most of the people who are likely to pay for Snapchat+ are not going to be in the target market for Blue as well. But still, the two subscription elements provide an interesting parallel as to how these types of offerings can work – and indeed, if they actually do work in the broader scheme of things.

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For example, it’s interesting to note the recent strategic variances for each, with Twitter recently increasing the price of Twitter Blue by 60%, despite adding no new features, and Snapchat announcing an India-only release of Snapchat+, at an 85% discount on the regular price.

Which strategy will work out best?

For Twitter, it’s likely upping the Blue price ahead of the addition of tweet editing, which looks close to launch, and which it probably expects to bring in a heap more paying subscribers, given that it’s the most requested social media feature in history.

Snapchat, meanwhile, is going for volume, and making its app more sticky in the Indian market, which could expand its usage in what’s now its biggest single biggest market, at 144 million Indian users.

That, eventually, could help Snap develop a stronger market presence, and give it a lot more users to sell ads to, or to pitch its own products, like its Pixy drone camera or its coming AR glasses.

Though when, exactly, those glasses might be coming could be further off than anticipated, given Snap’s recent spending reduction measures as a result of the broader downturn in the digital ads market.

But then again, what if Snap, which now has a huge and growing Indian presence, were to partner with Apple on its AR glasses, as a means for both to maximize take-up, and dominate the space? Meta, too, is looking to become the AR leader, as another element within its broader metaverse push, though it’s primarily focused on VR and building wholly immersive digital worlds.

That could open the door for Snap and Apple to win out, with the cool factor of Snap combined with the technology of Apple to build a more fashionable, appealing AR wearable product.

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There’s nothing to suggest that such a partnership is on the cards as yet – though Snap has worked with Apple on various AR projects and elements in the past.

With this in mind, building audience could be a key step, which is why Snapchat’s approach to Snapchat+ may just be the better way to go, as opposed to Twitter’s thus far stumbling Twitter Blue strategy.

Snapchat says that it will ‘continue to drop more features’ for Snapchat+ over the coming months. 

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