Pinterest Loses 24 Million Customers as Lockdowns Ease and Bodily Shops Re-Open Across the World
After reporting user growth for 11 straight quarters, Pinterest took a hit, with the platform seeing a decline in total users in the second quarter, although revenue results remained strong for the period.
But users are going to be the main storyline here – as you can see here, Pinterest has lost 24 million users in the past three months, with U.S. users dropping 5% year over year.
The loss, Pinterest says, is largely due to the global launch of vaccines and the reopening of physical stores, which has impacted the adoption of e-commerce and online browsing.
According to Pinterest:
“During the second quarter, fewer MAUs came to Pinterest than we expected. The main reason for slower MAU growth worldwide and annual MAU decline in the US was the widespread relaxation of pandemic restrictions. When the locks were lifted, people spent less time at home in Q2 2021 compared to Q2 2020. Since many of Pinterest’s core use cases (e.g. decor, gardening, cooking, home improvement) are particularly relevant to the home, In our opinion, we have benefited disproportionately from the increased time we spend at home during the pandemic lockdown. “
In other words, last year’s results have been a bit unusual due to the pandemic, which means those numbers will inevitably look bad in comparison. All in all, 454 million total users are stable in terms of the platform’s longer-term growth path – only the addition of 62 million more users last year was unsustainable, which compounded the losses somewhat.
In context, Pinterest’s user base increased from 367 million in Q1 20 to 416 million in Q2 20, the platform’s largest quarterly growth in its history (49 million). Without the subsequent influx of pandemics, and based on the current number of users (454 million), Pinterest would have seen an average increase of 17.4 million new users per quarter over the past year, which would be considered a good performance. But riding the COVID-induced wave has blurred this with a far more variable and less favorable comparison.
The specific impact of the retail reopening is also underscored in Pinterest’s notes, with the platform explaining that the biggest drag on usage numbers was fewer people logging into the platform over the internet. Pinterest also says that Pinterest web-based users were “less engaged and generated less revenue” than pinners using the mobile app.
“In the second quarter, MAUs on our mobile apps increased more than 20% year over year in the US and internationally.”
So, if you’re targeting pin users on the web, or your target market is mostly desktop-based, this may not be the best reach option for your brand.
However, Pinterest notes that both shopping and search engagements remain solid overall, 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 increased 50% Q2 in the second quarter), making Pins easier to purchase and giving brands more opportunities to showcase their products to active consumers.
Essentially, this means that while Pinterest may not have that many users, the users it has can prove to be just as valuable if it can further refine and improve the in-stream buying experiences.
This is largely reflected in Pinterest’s average revenue per user statistics, which grew in the first quarter.
Even if the audience’s reach is lost, users of the app are still engaged, which is a positive sign for the app.
Growth remains a key element and Pinterest needs to get this back on track. But the numbers, as Pinterest notes, reflect some sort of market correction following the surge in web usage over the past year as a result of global bans. As that wave recedes, we’re getting a closer look at each company’s actual growth path – and with that in mind, Pinterest is expanding its core element by providing a platform for shopping discoveries and purchases, and more marketing opportunities.
The top-line user stats look bad, but the underlying performance metrics still indicate significant potential for reaching potential customers on the app.
Pinterest further notes that Gen Z Pinners are still very committed:
“US MAUs under 25 experienced double-digit year-over-year growth and showed particularly strong commitment to our new native content format Idea Pins.”
Idea Pins – which were Story Pins – are in line with the wider story engagement trend, so it’s no surprise that they are resonating with younger users. And the fact that Pinterest is seeing greater engagement in this audience segment as e-commerce sales continue to grow is also a positive sign of future expansion.
Pinterest says the number of Idea Pins created each day has increased more than seven-fold since the beginning of the year, and daily impressions of Idea Pins have increased more than ten-fold over the same period. Worth considering in your strategy.
In terms of revenue, Pinterest raised $ 613 million for the quarter, up 125% year over year.
Pinterest said it had particularly strong advertising interest from major U.S. retailers and travel brands, while the continued expansion of its business tools into new markets also helped drive revenue.
Again, the numbers undermine what the broader narrative will be, namely that the platform has lost users. Since it has lost a surprising number of MAUs – but has a similar perspective to Twitter’s numbers on monetizable daily active users, while Pinterest may have lost some audience, it can also limit itself to more profitable users or people who actually use the app to Spending money.
If Pinterest can continue to produce results, it has a good opportunity to further cement and build on those results – but the concern, of course, is that the decline in audience leads to decreased advertiser interest. Because of this, Pinterest needs to highlight the potential of its direct shopping opportunities to keep business going.
Looking ahead, Pinterest essentially said it doesn’t know what to expect:
“Our current expectation is that Q3 revenue will increase in the lower 40% year-over-year range. We expect Q3 operating costs to increase slightly Q3 as we invest in our long-term strategic priorities continue to increase and resume plans. ” our brand marketing campaign in the early 4th quarter. The headwinds from engagements on Pinterest continued in July. The evolution of the COVID-19 pandemic and associated restrictions are not yet known and we are not providing guidance on MAUs in Q3 2021 as we have no insight into certain key factors of engagement. “
So it could report a further decline in user numbers in the near future. Which would be bad, but if Pinterest can continue to deliver results for advertisers and drive ad spend, and keep improving its shoppable pins and direct sale options to help businesses connect with its spend-ready users, then it might well be able to deliver its Revenue growth momentum and maximization of ARPU numbers, which it could then describe as a positive sign of the business’s persistence, despite less crowd.
But growth will be the key story and will remain the main focus until Pinterest can convince the market that it is not a problem. Because at some point, no matter how you look at it, it will be, and if Pinterest can’t keep growing and getting results for brands, its challenges could increase as vaccine rollout continues around the world.