Retail Media
28 April
Coming soon to Pinterest feeds: Amazon ads
A new partnership is ushering in third-party advertising on Pinterest as the platform seeks to become more shoppable.

Pinterest. (Photo by charlesdeluvio on Unsplash)
A new partnership is ushering in third-party advertising on Pinterest as the platform seeks to become more shoppable.
Pinterest will soon feature ads from outside networks. On Thursday, the company announced that the first partner on this initiative is a recognizable name in commerce: Amazon.
“We believe Amazon is the right first partner as we bring third-party demand onto Pinterest because they offer a breadth of relevant shoppable ad content paired with a seamless consumer buying experience,” Pinterest CEO Bill Ready said on the company’s Thursday earnings call. “Their broad coverage of brands and products will help accelerate our efforts to take users from inspiration to action, satisfying more of the commercial intent that users have on our platform.”
Through the partnership, brands that advertise through Amazon’s ad platform will now also have a pathway to promote their products on Pinterest. Ready said the appearance of Amazon ads will roll out over multiple quarters, meaning that revenue impact may not begin to take hold until 2024.
The move comes as Pinterest is seeking to boost shopping on the platform. The visual platform has long been a place to discover new items. Now executives see an opportunity to make it a place where people buy products, moving from "idea to action," as the company puts it. Ready, who previously led commerce at Google, has set a long-term goal to “make every Pin shoppable,” and the platform is also seeking to boost commerce-focused advertising as a means to bring in more products to browse buying capabilties.
“I think we are a platform that is still under-monetized relative to the amount of intent on the platform,” Ready said. “…As we bring more relevant ads onto the platform, that is not only aiding our revenue growth, aiding advertiser value, it’s good for users.”
Ads from third parties can provide scale to these efforts. Ready called the third-party demand "an important lever for us to increase the comprehensiveness of our ads, thereby leading to greater relevance and shoppability for users," as well as improved monetization.
In particular, Amazon offers both a large ad network that will boost inventory, and an easy path to checkout through its own highly-tuned shopping experience. Users who click on Pinterest ads will be able to complete purchases on Amazon, where many likely already have Prime accounts.
“Amazon Ads is delighted to partner with Pinterest and make it even easier for customers to discover and buy relevant products through shoppable content, while also providing differentiated value for brands,” said Amazon SVP Paul Kotas, in a statement.
With the deal, Pinterest will tap into an ad network that is continuing to grow rapidly. In its own first quarter earnings on Thursday, Amazon reported that advertising revenue was up 23% year-over-year. CEO Andy Jassy shared the following perspective on Amazon’s advertising growth, even at a time when there is more caution in spending among both brands and consumers:
On the advertising side, we’re continuing to buck wider advertising trends and deliver robust growth. I think there are a few reasons for it. First, even in difficult economies, most people still shop. And with the largest ecommerce shopping venue, we have a lot of customers that companies seek to reach. That, coupled with our very substantial investment in machine learning to make sure customers see relevant ads when they’re looking for various items, have meant that these advertisements have performed unusually well for brands, which makes them want to advertise on Amazon.
The new Pinterest agreement shows how brands that advertise on Amazon will also be able to potentially leverage the network to reach shoppers on other platforms, as well. In the end, the tentacles of Amazon are stretching deeper into the web.
The retailer's marketplace is expanding quickly.
When it comes to ecommerce growth, was the pandemic a blip or a new trendsetter?
As we move further from the height of COVID-related closures, it’s a question that will start to be answered through the lens of history.
So far, the narrative of ecommerce growth in the U.S. from 2019-2022 has gone like this: Ecommerce’s share of overall retail saw a huge spike at the height of the pandemic in 2020-21, when goods in general were in demand and online shopping was necessary to preserve health and safety. Experts looked out and saw a permanent exponential change in the penetration of ecommerce as a share of retail that would last beyond the pandemic. Then, in 2022, everyone went back to stores and the trendline came back to 2019 levels. Growth was no longer exponential. There was still growth, but it was not happening as fast as during the pandemic period.
With this in mind, it’s worth pointing out that 2023 is the first year that there likely won’t be a pandemic-influenced swing to influence ecommerce growth. It is also a year where demand has suffered challenges amid inflation and interest rate hikes.
So as we seek to determine the importance of ecommerce to overall retail, it’s worth it to continue taking a close look at what growth trends retailers are seeing now, whether ecommerce is remaining resilient amid consumer pullback and how retailers are preparing for the future.
The latest example arrived this week from Macy’s. It’s a fitting one for the times. Overall, Macy’s is seeing a slowdown as consumers pull back on discretionary purchases, with sales declining 7% in the first quarter versus the same quarter of 2022. Digital sales were down 8%.
Macy’s is particularly susceptible to the macroeconomic headwinds that many brands and retailers are facing, as spending among the middle-income consumers it counts as a primary customer base is particularly softening, said GlobalData Managing Director Neil Saunders.
But while ecommerce is slowing overall, the importance it gained to Macy’s business during the pandemic is remaining in place.
In 2019, ecommerce made up 25% of Macy’s revenue, CEO Jeff Gennette told analysts on the company’s earnings call. That jumped to a high of 44% in 2020. By 2022, digital reached 33% of sales after the pandemic boom. In the first quarter of 2023, it remained at 33%. So, while the trend line dipped after shoppers returned to stores, ecommerce share still settled in at a higher post-lockdown point than it was before the pandemic.
This came in a quarter in which traffic was “relatively good” across both online and in-store, Macy’s CEO Jeff Gennette said. It was “flattish” online, and slightly up in stores.
“We do expect that this is the reset year with the penetration between them,” Gennette said. “But we do expect more aggressive growth in digital in the future versus stores as we think about '24 and beyond. And that's going to be foisted by a lot of ideas and strategies.
Over the last year, the retailer has made investments in boosting ecommerce, even as shoppers returned to stores. In a bid to boost the assortment of goods available online, Macy’s launched a marketplace in September 2022 that welcomes goods from third-party sellers.
The marketplace had an “outstanding” first quarter, said Macy’s President Tony Spring, who is poised to succeed Gennette as CEO next year. Gross merchandise value increased over 50% when compared to the fourth quarter of 2022, while the average order value and units per order for marketplace customers was 50% above those not shopping at the marketplace.
Macy’s is continuing to build the marketplace even as it racks up sales. The retailer added 450 brands, ending the quarter with 950 brands.
This is helping to draw in new customers, as well as younger existing customers who are buying more items, resulting in increased basket size.
“We're very excited as to how marketplace is really attracting the Gen Z customer, particularly in categories where it was not economically feasible for us to carry in the past,” Gennette said.
In the end, Gennette said a strong digital and social presence is key to attracting younger consumers. That's a different type of shopper than other age groups.
“We know the younger customer starts first online,” Gennette said. That behavior will still be in place as the generation gets older, and gains more buying power in the process.
Going forward, Macy’s is seeking to expand the model to other retail banners in its portfolio. Bloomingdale’s will open a marketplace in the early fall.
The Macy’s ecommerce trajectory isn’t that different from the wider U.S. ecommerce narrative detailed above. With one quarter of 2023 data, there is evidence that ecommerce share settled out at a higher point after the pandemic than where it started before COVID arrived. There is flattening now, but the retailer is taking it not as a sign of a slowdown, or a signal to change course. Rather, it sees changing consumer behavior as a reason to build for the future.