Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Pinterest is ending the week on a high note, the
Speaker 2: company's second quarter revenue topping guidance, easing investor concerns about
Speaker 2: an advertising slowdown. Pinterest also saying that it's AI investments
Speaker 2: are beginning to pay off. The CEO of the company,
Speaker 2: Bill Ready, saying, our ability to leverage AI to personalize
Speaker 2: our users experience is a key differentiator. It also makes
Speaker 2: us a highly valuable partner to advertisers. He joins US
Speaker 2: now along with Bloomberg Technologies. Caroline Hyde, Bill, thanks for
Speaker 2: coming on the program. Really appreciate it. I'm fascinated by
Speaker 2: really the sell through revenue that you can get, not
Speaker 2: as much the advertising, but because of the way I
Speaker 2: use the Internet, because of the way I want to
Speaker 2: use Pinterest. I search for things that I want or need,
Speaker 2: and I want to just click through and buy them.
Speaker 2: How much are you to making that, you know, a
Speaker 2: very profitable reality.
Speaker 3: Yeah, I mean we've had a huge transformation in our
Speaker 3: business over the last three years where we've really made
Speaker 3: Pinterest a shopping destination for our users. And exactly to
Speaker 3: your question, you know, Pinterest historically was great for window shopping,
Speaker 3: but you really couldn't click or take action. Over the
Speaker 3: last three years, we've really opened up those stores, so
Speaker 3: it's not just window shopping. Now you can easily click
Speaker 3: and purchase with some really seamless examples. You can link
Speaker 3: your Amazon account, you can have a one click buying
Speaker 3: experience right inside of our app. And there's a lot
Speaker 3: that we're doing to really drive clicks and conversions and
Speaker 3: sales for our advertisers. But for our users, it's just
Speaker 3: really great shopping and seamless buying right on our platform.
Speaker 1: And let's just talk about the resilience of those consumers,
Speaker 1: the buying and indeed the advertisers bill because it's not
Speaker 1: exactly a feeling of economic nirvana out there right now,
Speaker 1: but still you're managing to give us a forecast unlike
Speaker 1: rivals in the social media space. What gives you that clarity,
Speaker 1: what gives you that resilience in the business.
Speaker 3: Well, you know, back to what we've done for our
Speaker 3: users in turning interest into a shopping destination pinteresses where
Speaker 3: gen Z goes to shop. Gen Z is now our
Speaker 3: largest fastest growing demographic, over forty percent of our users,
Speaker 3: and you know they're coming here to shop. We're giving
Speaker 3: them a great shopping destination. But you know that has
Speaker 3: allowed us to deliver great performance for our advertisers. We've
Speaker 3: delivered a performance advertising platform where advertisers can get clicks
Speaker 3: and conversions and great performance. We're giving them AI enabled tools,
Speaker 3: so it's easier than ever for them to go create
Speaker 3: campaigns on Pinterest and see really great returns on that.
Speaker 3: So that's the other side of the businesses that we've
Speaker 3: made Pinterest a shopping destination. Eighty five percent of our
Speaker 3: users come to us directly, and then we connect them
Speaker 3: with advertisers and make it really easy for advertisers to
Speaker 3: connect with those users in this moment where they're in
Speaker 3: market looking for something to buy but haven't decided what
Speaker 3: to buy. That's a great moment for those two to meet,
Speaker 3: and we see that continue to accelerate. We're all time
Speaker 3: highs on users and all time highs on depth of
Speaker 3: engagement per user, really driven by AI and the personalization there,
Speaker 3: and then how we're connecting shoppers and sellers.
Speaker 1: So is that keeping the likes of Timu and Sin
Speaker 1: who a lot of those gen zs are going to
Speaker 1: buy on your platform? Is that sticking around because many
Speaker 1: had worried because of the towers, because of the difficulty
Speaker 1: accessing the US and consumer in terms of a price point,
Speaker 1: what we'd see retrenchment in terms of ads from those companies.
Speaker 3: Yeah, Well, we're a global platform, you know, or over
Speaker 3: you know, five hundred and seventy million users. Eighty percent
Speaker 3: of those are outside the US, and so we noted
Speaker 3: as others that for Asian cross border sellers, you know,
Speaker 3: that has slowed down coming into the US, as others
Speaker 3: have noted as well. But we're seeing those sellers sell
Speaker 3: more globally and we're helping them to connect to other
Speaker 3: markets around the world. Here in the US. Consumers are resilient.
Speaker 3: You know, there's lots of public spending information that says
Speaker 3: that consumers are still shopping. We went through a major
Speaker 3: supply chain disruption just a few years ago during the pandemic,
Speaker 3: and you know, we all saw, you know, things are
Speaker 3: out of stock and consumers found other ways to buy,
Speaker 3: other things to buy, and we see that happening on
Speaker 3: our platform. That while you have things like budget conscious searches,
Speaker 3: like you know, budget friendly recipes or you know budget
Speaker 3: you know party decorations, budget party favors, and those kinds
Speaker 3: of things up to two hundred percent plus here on here.
Speaker 3: People find substitute products, they find other ways to go
Speaker 3: sort of bring delight into their life, and we're a
Speaker 3: great place to help them do that in a great
Speaker 3: place for advertisers to see these shifting consumer trends.
Speaker 2: So I'm fascinated. Did you say eighty percent of your
Speaker 2: users are outside of the US or the US approximately years?
Speaker 3: Okay, so approximate a percent users outside US?
Speaker 2: What's the mix of sales? So for US consumers, you know,
Speaker 2: I'm looking at stuff all the time that's arrow leathers
Speaker 2: in Scotland or the real McCoy's in Tokyo. So all
Speaker 2: of the products that I'm looking for, for the most part,
Speaker 2: except for Westco Boots in California, are coming from overseas.
Speaker 2: What's the mix right now for US shoppers through Pinterest
Speaker 2: on overseas products versus made in the US say stuff?
Speaker 3: Well, I would say we'd track the market generally on
Speaker 3: on that. But the opportunity for us with eighty percent
Speaker 3: of the users be outside the US is that you know,
Speaker 3: we have eighty percent of our users outside the US,
Speaker 3: but rough only twenty percent of our revenue outside the US.
Speaker 3: So the shopping playbook that we've created over the last
Speaker 3: few years, that's really working in North America for US.
Speaker 3: We're now exporting that to other markets and we're seeing
Speaker 3: that shopping playbook really take hold in other markets as well.
Speaker 3: So that's a big part of our forward looking opportunity.
Speaker 3: And here in the US we continue to grow rapidly
Speaker 3: as well, particularly you know on our depth of engagement,
Speaker 3: really making Pinterest a shopping destination. And again, consumers are resilient.
Speaker 3: You know, if some things aren't available to them, they're
Speaker 3: going to be creative and find other ways to buy.
Speaker 3: And you know, even if their pocket gets pinched. You know,
Speaker 3: we are a place for intentional purpose purchases, not just
Speaker 3: impulse purchases. So you know, we see highly considered purchases
Speaker 3: on our platform. Our users are planful and so if
Speaker 3: they go through a moment where they need to be
Speaker 3: a little bit more thoughtful about what they buy, are
Speaker 3: a little bit more creative about where to get it,
Speaker 3: that's exactly what people do on our platform, and we
Speaker 3: think that'll be a great moment for us to shine.
Speaker 1: You talk about that depth of engagement and in many
Speaker 1: ways that's driven by the AI investment you've made and
Speaker 1: the fact that you're personalizing it. You call it a differentiator.
Speaker 1: How is it differentiating you when we see meta also
Speaker 1: plowing a lot of money into AI and offering that
Speaker 1: to advertisers too, what's the secret source that you've had.
Speaker 3: So for us? You know, the really uniquely on our
Speaker 3: platform is that Pinterest is the only place in the
Speaker 3: Western world where users not only shop, but they also curate.
Speaker 3: So you know, you know, there's plenty of other places
Speaker 3: through third party cookies and things like that that could
Speaker 3: say they know everything you've bought and everything in your closet,
Speaker 3: but they have no idea how you style that into
Speaker 3: an outfit. They don't know your taste. On Pinterest, hundreds
Speaker 3: millions of people every day are styling their outfits, deciding,
Speaker 3: you know, what handbag to go with, what pair of
Speaker 3: shoes with what dress, And so we learn people's taste.
Speaker 3: I talked about on our call. Our taste graph has
Speaker 3: grown by over seventy five percent over the last two years,
Speaker 3: and that really unique signal lets us train AI to
Speaker 3: be really really personal is the way that manifests for
Speaker 3: our users. If you go ask a gens the user
Speaker 3: why they go to Pinterest. What they'll say is Pinterest
Speaker 3: just gets me. Well, that is the use of AI
Speaker 3: trained on that really unique signal where we understand not
Speaker 3: only their style and taste, but when somebody else bought
Speaker 3: that same handbag, how did they put an outfit together
Speaker 3: around that. That is really really great personalization, that's really
Speaker 3: helpful to our user and again totally unique in that
Speaker 3: signal that we have that we're able to do differentiated
Speaker 3: things with AI because of that unique signal of the
Speaker 3: from the curation that users do on our platform.
Speaker 2: I'm wondering about partnerships. You mentioned recipes earlier, and that's
Speaker 2: probably the main thing that I do on a daily
Speaker 2: basis with Pinterest. I save recipes that I like there
Speaker 2: and then I go to Pinterest when I'm ready to
Speaker 2: cook them. Can you partner up with, for example, on Instacart,
Speaker 2: to use your AI find all the ingredients I need
Speaker 2: and then say, like, you know, click this button to
Speaker 2: order all the stuff you need for this recipe.
Speaker 3: You know, what we're seeing is that our visual search
Speaker 3: technology is working across many many categories. Shopping has been
Speaker 3: a first area of focus for us, but there are
Speaker 3: many adjacent categories that works for and the way we
Speaker 3: think about that is partnering closely with great retailers, great
Speaker 3: brands to connect them directly to a customer. So I
Speaker 3: think those opportunities continue to abound. And you know, in
Speaker 3: terms of that visual search capability, one of the things
Speaker 3: that we talked about on our call yesterday is we
Speaker 3: just launched a new multimodal AI model for visual search
Speaker 3: that outperforms off the shelf models by over thirty percent.
Speaker 3: So just to make it really tangible how much better
Speaker 3: those recommendations are because of that unique signal. Outperforming the
Speaker 3: you know, the best off the shelf models by over
Speaker 3: thirty percent gets to really just how unique our capabilities
Speaker 3: are there. And that makes us a great partner for
Speaker 3: many And you've seen us partner with Amazon, You've seen
Speaker 3: us partner you know, with large retailers, and we're now
Speaker 3: expanding that to more and more other great partners, and
Speaker 3: so there are many more forward opportunities for us on that.
Speaker 2: All right, Bill, thanks so much for joining us on
Speaker 2: what must be a very busy day for you. Bill
Speaker 2: ready there the CEO having Pinterest