Pinterest forecast suggests heightened ad dollars competition

Pinterest's fourth-quarter revenue was $981.3 million, falling short of estimated $990.6 million
An undated image displaying Pinterest logo. — Freepik
An undated image displaying Pinterest logo. — Freepik

Pinterest on Thursday published its first-quarter revenue forecast well below what Wall Street estimated, indicating that it's grappling with bigger social media giants — like Facebook, Instagram, X — as the digital marketing landscape regains momentum. 

However, the company's shares dipped 9% in extended day trading following an announcement of its ad integration deal with Google made by CEO Bill Ready.

During the announcement, Ready remarked that the deal would allow Pinterest to place ads with the help of Google's Ad Manager, ensuring the monetisation of international markets.

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The visual discovery social media platform collaborated and signed a deal with the e-commerce giant Amazon, which the industry analysts said would foster the material advertising on the platform this year, Reuters reported.

The CEO said"Third-party ad demand is scaling as we anticipated ... and we are now seeing it contribute to our growth this quarter."

Pinterest is currently indulged in a fierce competition with social media platforms like TikTok and Meta-owned platforms that have been chosen the most by advertisers because of their massive user base and better engagement for targeted ads.

"Pinterest’s solid but unspectacular Q4 numbers should see some scrutiny from the market, which saw Meta blow out expectations just last week," Jeremy Goldman, Insider Intelligence analyst, said.

According to market intelligence firm Sensor Tower, advertising spending in the shopping category, which is typically a major advertiser during the holiday quarter, only grew by less than 1% compared to the previous period.

Sensor Tower also reported that ad spending from the software and gaming categories in the U.S. increased by 34% and 22% respectively in the fourth quarter for Pinterest. Additionally, Pinterest's global monthly active users (MAUs) increased by 11% to 498 million in the fourth quarter, surpassing previous estimates of 484.5 million.

However, Pinterest's fourth-quarter revenue was $981.3 million, falling short of the expected $990.6 million.