Category: In the News

The model will rely on the first-party data that Pinterest can provide about its users as well as insights into trending topics and brands to determine what content might perform well on the platform. The publisher is then responsible for creating content — particularly video content.

This first campaign with Fritos includes several recipe videos including one for a Frito taco casserole and sweet and salty Fritos cookies. They feature the overhead shot, “hand-in-pan” style videos that Tastemade uses frequently, with Tastemade’s and Fritos’ logos in the bottom corner. The pins are published to Fritos’ page on Pinterest but are promoted throughout the platform.

Neither Tastemade or Pinterest would disclose what the revenue split is, but both companies said the commission rates were competitive with industry norms, with the publisher earning less than the platform.

Tastemade currently reaches 87 million viewers per month on the platform, according to Meredith Guerriero, U.S. head of partnerships at Pinterest. And the publisher has received over two billion views on video pins since it first started posting videos two years ago, said Jeff Imberman, Tastemade’s head of sales and brand partnerships.

The publisher has also run campaigns on the platform in the past that allowed it to keep all of the earned revenue. But Imberman said that the appeal of entering into a revenue-share model was that Pinterest “knows more about its users than we could ever hope to know.” 

“Purpose built platforms like Pinterest have a treasure trove of knowledge about their users about how they react on that platform,” said Imberman. “And how someone acts on Pinterest is different than how they act on Twitter or Facebook or other platforms.” 

Imberman said that Tastemade and Pinterest both had relationships Fritos as an advertiser. But Pinterest noted that the brand had an increase in searches on the platform, which made it seem like the right fit for this experiment, in particular because it was already organically trending.

Guerriero said that from May 2019 to May 2020, searches on Pinterest for “taco bake with Fritos” had increased by nearly 400% year-over-year, while “Frito taco casserole” increase by 96% and “comfort food recipes” had increased by 165%. Beyond that, recipe searches in general saw a significant increase during the pandemic as people began cooking at home more.

Pinterest can also “drive performance by pulling levers” that Tastemade on its own does not have access to, he said. However, Tastemade can provide creative capabilities that Pinterest “as an organization is not skilled in,” such as video production, Imberman said.

So far, the videos are outpacing the expected benchmarks, according to Guerriero. In the week since the pins were first posted they have reached over 6.7 million unique users and have received over 37,000 saves to people’s accounts—two times the platform’s average save rate on pins. 

There is no definitive timeline for rolling out this ad model to other publishing partners, said Guerriero, who added though that there are plans to extend it beyond the food category into the lifestyle category. 

According to eMarketer, Pinterest surpassed Snapchat as the third most popular social media platform in the U.S. for 2019, with an estimated total of about 86 million users, compared to Snapchat’s expected 83.1 million. 

Pinterest earned over $1 billion last year in total revenue and is expecting to hit $1.5 billion this year, according to MarketWatch. 

And with the Facebook boycott gaining momentum, Benjamin Arnold, a managing director at social media agency We Are Social said brands are looking to shift their media budgets to other platforms, though Twitter, YouTube and others are also coming under pressure to change how they benefit from hate speech as well. 

“Pinterest looks set to be a major beneficiary [of the Facebook boycott] and new advertising features, such as the co-sell model, will only further increase its attractiveness to marketers,” Arnold said. 

At the beginning of 2020, after seeing no data suggesting positive lift from resellers, the publisher trimmed any supply-side platform partners that delivered less than 5% revenue. Of the nine SSPs remaining, down from 15, it cut loose all ad resellers from those partners, according to its ads.txt file, so any deals are done direct with those exchanges. 

“We were told as publishers that resellers were so important,” said Emry Downinghall, vp of advertising at Chegg Inc., “but no [publisher] has communicated to me they removed resellers and lost X% lift.”

Programmatic ad revenue is a “small but meaningful” slice for the publisher, which wouldn’t say exactly how much. While the majority of its revenue comes from subscription services, most of its ads are sold on the open exchange and non-guaranteed. Downinghall said it delivers between 20 and 25 billion impressions a year. In April, Chegg, based in the U.S., had 9 million monthly unique users, according to Comscore.

Ad reseller activity is one theory accounting for the lost 15% of revenue within the programmatic supply chain, according to the transparency report by the Incorporated Society of British Advertisers, the Association of Online Publishers, carried out by PricewaterhouseCoopers and released early May. Additionally, a cross-industry task-force has been set up to improve transparency but the AOP and others have recommended publishers scrutinize contracts and reduce intermediaries to potentially reduce the 15% gap. Examples of untangling the mess under the umbrella of supply-path optimization will likely continue to grow. 

But given the murky nature of the programmatic ecosystem, it’s difficult to pin down every single reseller in a given impression sold and it’s also hard to track the reseller fees throughout the chain.

“Publishers are asking more questions of SSPs about ‘why does this reseller exist,’” said Ari Lewine, co-founder of exchange Triplelift. “It’s the indirect paths that are being questioned.”

Chegg gradually removed resellers from its ads.txt file, while keeping a close eye on the data as there’s no clear way of A/B testing SSPs with and without resellers.

“I never heard a fully compelling reason why resellers were there,” said Downinghall. “In some instances, I was told they were required to be in the exchange in order to run some [private marketplaces], I was never able to prove that out. It’s up to publishers to decide what they will and won’t run.”

Other publishers, like Bloomberg Media, are taking a closer look under the hood through demand-side optimization, analyzing how impressions are being bought rather than sold. Similar to supply-path optimization, DPO-minded publishers collect different data sets—like win rates, response time, page load and ad quality— to work out exactly which partners make sense for it to work with.

Bloomberg Media has been on this route since the end of 2019 and pegged this summer as when it should have worked out which SPO and DPO options make the most sense. 

“Unquestionably it will improve yield, more revenue will be back in the hands of the publisher, clients will have full transparency of where the money is being spent,” said Simon Baker, Bloomberg’s head of programmatic Europe, the Middle East and Africa. “Bloomberg is a data and tech company with transparency at its core, that’s why DPO makes so much sense. Ads.txt has gone a long way, but not far enough.”

Earlier tight economic market conditions forced publishers to incentivize short-term gain over longer-term health. As demand became more scarce and the ad premium fell when marketers pulled ads out of the open exchange, the temptation would be to plug in more demand sources in order to increase bid density. That could drive short-term revenue but makes for a more complicated picture of which buyer is bidding on what inventory. For publishers, managing multiple relationships takes up time.

For Chegg, having direct relationships with SSPs and confidence in their solvency was imperative to protecting its ad business for the long term.

“I couldn’t say resellers are bad, but I can say they haven’t helped drive up lift in 2020,” said Downinghall. “In 2018 or 2019 that might be different. Now with further emphasis on SPO, this is at least putting you in the best position to succeed, especially when removing resellers did not hurt performance.”