Analysts looked at Pinterest’s results with high expectations, especially after Snap’s third quarter results showed “continued resilience” of direct response advertising, which is used by marketers to drive an immediate response, like clicking on a link. The industry is also seeing the start of a recovery in branded advertising, which was hit hardest during the pandemic.
Pinterest said it also took advantage of boycotts by advertisers from other social media platforms like Facebook and Twitter due to the spread of toxic content and misinformation. CEO Ben Silbermann said of the company’s results that advertisers “want to be around positivity when building their brands, and that also contributes to our growth. ”
Pinterest posted total third-quarter revenue of $ 443 million, a 58% year-over-year increase. The company expects its fourth quarter revenue to grow 60% year over year, saying uncertainty remains around the pandemic and other factors.
Although Pivotal Research analyst Michael Levine said he already has “very high expectations” which have gradually increased given its recent market outperformance and following Snap’s results last week, Pinterest “has more than delivered the goods ”in the third quarter.
“According to SNAP, business apparently picked up in the quarter, as brand and DR spending rebounded,” he wrote in a note Thursday.
Morgan Stanley analysts said in a note Thursday that the direct response and branded advertising markets continue to show signs of a faster-than-expected recovery. They added that digital advertising bullish trends are expected to continue during the “shelter vacations” as retailers and marketers increasingly invest and experiment in digital to reach shoppers.
Some positive trends are likely to continue in earnest as consumers stay at home: Emarketer analyst Andrew Lipsman said Pinterest is “uniquely positioned at the moment” due to users flocking to the site for inspiration while they are at home in the pandemic and also benefiting from a boom in e-commerce.
Aaron Goldman, chief marketing officer for adware company Mediaocean, said in an email that brands using the company’s closed ecosystems platform have increased their ad spend by nearly 40% from a year over year in the third quarter. He also said he expects Pinterest’s shopping tools to take off with consumers and brands as the company embeds Shopping ad units in more places on the app.
MKM Partners, while improving the buy stock, said Thursday that it also expects the company’s buying tools to expand.
“It’s still early days when it comes to shopping on Pinterest,” the company said. “Catalog growth and integration with key e-commerce ecosystem stakeholders such as Shopify will increase the importance of Pinterest in the overall buying funnel. ”
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