Pinterest is launching "Promoted Video" in beta, which could be a game changer to grow revenue ahead of an eventual initial public offering.
Promoted Video will be paired with featured pins to give people the ability to watch a video and immediately take action — click to make a purchase or learn more about an item. On Wednesday, Pinterest, with 100 million monthly active users, is launching ads with a range of brands, including Lions Gate films, Purina, Behr paint and bareMinerals makeup.
Pinterest says it is well positioned to use ads to drive purchases, because consumers are already paying attention to companies and they're there to shop. Fifty-five percent of people on Pinterest are there to find or shop for products, compared with just 12 percent for other social networks, according to a report from Kleiner Perkins' Mary Meeker. And a full three- quarters of the content people consume on Pinterest comes from businesses. Plus, the company has seen a 60 percent increase in videos saved in the last year, though it doesn't reveal exact video numbers.
The company says early results of tests with 12 brands are positive. Pinterest cites a Millward Brown study of General Mills' Old El Paso brand, which found its video ads are four times as memorable as nonvideo ads.
"Promoted Video have performed equally well across a wide range of content types, video durations and verticals including food, beauty, financial services and entertainment," the company wrote in a blog announcing the news.
The move into video is key in that it allows the company to tap into the roughly $10 billion market for digital video advertising, dominated by Alphabet's YouTube and Facebook with its new live videos. Twitter has also been going after a bigger piece, investing in video content such as National Football League games.
The launch comes just a week after Pinterest announced that it is allowing marketers to bid on ads through an auction process, and to specify the maximum times a person can see an ad. These new ad tools should help Pinterest grow its revenue, to perhaps even boost its $11 billion valuation, and move toward an eventual IPO.