Inside Pinterest’s Trend Prediction Machine

[00:00:05] Phillip: Hello, and welcome to Future Commerce, the podcast at the intersection of culture and commerce. I'm Phillip.

[00:01:40] Brian: I'm Brian.

[00:01:41] Phillip: And I am tired, Brian. I'm back from advertising week. Very long week.

[00:01:46] Brian: You've been on the road. I mean, we've both been on the... You've been on the road as well. Yeah. I tapped out. You tapped in here.

[00:01:54] Phillip: First thing I did, this is no lie, I had an invitation to come back to New York next week. I'll be attending some more events not associated with advertising week, but I do have a bit of an affair I have to go to, and it is cocktail attire. And if there's two things I don't have, Brian, it's cocktail attire. I have formal wear, right? And I have a bunch of suits and stuff. I don't have cocktail attire. So the first place I go to find cocktail attire is I open Pinterest because that is my search engine for such a thing.

[00:02:27] Brian: Nice lead in.

[00:02:28] Phillip: And that is my default. And I think it is the default of many people. And I think there's a lot of data to be had and a lot of data to discover as we've been going through some of that data from recent trends reporting from Pinterest team about the way that those defaults are shaping behavior for consumers at every generation, not just old elder millennials like myself. In fact, this is a trend that we're seeing pick up and shape consumer behavior today. And here today to talk about it, we have just the person to talk about how Pinterest is thinking about the future. She is the VP of Ads Product Marketing at Pinterest, where she's responsible for the influencing of product strategy and roadmap priorities, alpha beta programs, and global go-to-market operations and growing adoption and engagement across advertising products. And before Pinterest, she spent five years at Amazon where she was the Head of Product Marketing and oversaw go-to-market programs for Amazon's advertising product portfolio. Welcome to the show, Julie Towns from Pinterest.

[00:03:30] Julie Towns: Thank you. I'm very excited to be here. Thanks for having me.

[00:03:33] Phillip: Glad to have you. And maybe you can help me pick out some cocktail attire a little bit later.

[00:03:37] Julie Towns: Maybe.

[00:03:38] Phillip: You weren't at advertising week, but I think your team was.

[00:03:40] Julie Towns: Yes. Yeah. They said it was great. I had some FOMO.

[00:03:44] Phillip: Oh, it's quite the show. And the way that they structure it these days, it really is quite packed in, learned a lot, and we'll have a lot of recap content over on all of our channels over the next couple of weeks. But the next few weeks, I think, are quite busy for you all. And I think that there's quite... I think this last year or two have been quite busy for Pinterest. It's in my estimation, there's been a lot of folks talking about new defaults and people have been sort of resetting their defaults. I think of Pinterest as a visual first search engine for folks to do the very thing that I did in my use case. Tell me a little bit about how you all are thinking of Pinterest these days and where you're trying to take things and how your role shapes that.

[00:04:31] Julie Towns: Yeah. It's a good place to start. Well, I think you said it best that Pinterest is and always has been a visual search engine. And I think one thing that's important to start with is how our consumers today are using the platform. We have almost 600,000,000 monthly active users who come from across the globe to find inspiration visually. And we've learned a lot from newer cohorts of users, especially Gen Z. Almost 40% of Gen Z consumers are choosing Pinterest now over traditional search engines. Especially when they have the use case that you explained, Phillip, around finding an outfit or anything that is visual in nature. We have probably the best product market fit we've ever had in years because of this intersection of building out shopping capabilities on the platform and providing more tools for consumers to search visually. And the problem that you stated at the onset is an interesting one because when you think about an outfit or something to decorate a room or to create a vibe or aesthetic, you really search and shop with your eyes first. And I think traditional search engines have really failed in helping consumers use that as a starting point, an image, or if you don't have the words to describe what you're looking for, where do you begin? And that's something that Pinterest is really a moat that we've created and really leaned into. Something that I'm really excited about in the development and product area that we're investing in is building out our visual language models. So I think all the rage in search right now is kind of moving towards conversational search and more text based search that is really founded in human language. And I think what has made Pinterest successful and very unique is all of the human labeling that we have that have built what we call our taste graph. Our taste graph is super unique to Pinterest. It's something that we've built over a decade plus in really understanding how humans are labeling images themselves. So we have over 500,000,000,000 pins that have been curated by humans into billions and billions of boards. And so if you think about what humans have been doing and taking an image and describing it and grouping it with other images and then labeling that grouping, there's hundreds, thousands of different ways you could do that. I think what's interesting in an example from what we see for Gen Z, for example, a lot of the boards that they're curating are Vibe based. So we see they have beige boards or blue boards. If you look at what's in them, they're all different kinds of content. It could be blue eyeshadow, blue nail art, blue outfits, blue rooms and paint colors. And so if you didn't have a human grouping those together and labeling them for us, it would be really hard to train a model to understand the connection point or through line between all these otherwise unrelated images. And so that's what's created this visual language model that we use to train our search and our visual search engine. Sorry to get into the tech right away, but it's something I find fascinating how we're building the product for the future.

[00:08:11] Phillip: And the head start that you have too. Right? This is so many years in the making. We've talked about this, Brian.

[00:08:19] Brian: Yeah.

[00:08:20] Phillip: You know, machine learning and visual search has been a core strength of Pinterest. We'll get into some of the data here in just a moment, but I do wanna point to a few resources. I think we'll cover a couple of them here today. There was a fall trend report that your team published that we recently covered in Future Commerce's newsletter, The Senses. I think we'll be covering a little bit of some data there and some data that your team provided over to us. And then we also have our own primary insights and foresight team. And we had a report that we published back in August called New Modes. And it is an annual report that we talk about the channels for search and the channels of AI tools that consumers use that assist in their shopping journeys. And between those two things, Pinterest features very heavily in the consumer shopping journey. We'll touch on a couple of those things today as we go. Brian, you were about to say...

[00:09:22] Brian: Oh, yeah. It just fascinated me. So the stat about almost 40% of Gen Z consumers choosing Pinterest over traditional search engines is a mind boggling number. And so I'm just curious, as you've analyzed this trend, is this just about visual language, picture's worth 1,000 words, replacing text? Or is there something deeper about how generations are expressing their taste? Why do you think this is the move?

[00:09:54] Julie Towns: Yeah. Great question. I think there's two answers to that question. The first is really shopping. So why are users and specifically Gen Z coming to Pinterest to search when they have a shopping use case? I think I said this, but people search with their eyes. I think we're best at helping to showcase images and search from images. The second answer I think is a little bit more nuanced, which is Gen Z makes up over half of our global active users now, which is wild. And we've gotten this question of, have you built specifically for Gen Z as a consumer audience? And the answer is no. And I think it's important to explain why, but one, like any young generation, if you start to try to build something for them or be cool, they will sniff that out and reject it. But what I think is really happening is Pinterest is providing an antidote for Gen Z to the intensity and kind of doom scrolling experience that they're having on other social platforms.

[00:11:04] Phillip: Yeah.

[00:11:04] Julie Towns: And so we hear from Gen Z directly that Pinterest is a place of reprieve. And this is off script, but I think a funny anecdote. I was at a comedy show on Friday and one of the comedians was talking about his experience with another unnamed social app and he was like twenty minutes of doom scrolling... "I put my phone down and question like, Who am I? Where am I? What just happened?" And it's funny because Pinterest, the exact opposite is happening where Gen Z are coming to Pinterest specifically to discover who they are through this act of curation. So we find that when you take the time to find things you like and group them together, and it's this peaceful space where they're really discovering who they are. And so I think that in combination with all of the shopping enhancements we've made where you can now buy everything that you find, if you see something that you love or you want to save it for a future purchase, that capability exists. And so there's this perfect match of being a place where you can discover your true self, your true style and aesthetic and vibe in a space that is safe and uncluttered with nasty comments or likes or needs for following. And it's paired with the technology to have some utility. If you're really discovering something you love and you want to find that product and purchase from multiple retailers, that capability exists now too. And so I think the combination of those two things are really what's driving the engagement from Gen Z in particular.

[00:12:45] Brian: I think what's super interesting here is like you're focused on two things, what's native to humanity and identity. Marshall McLuhan, who I quote often, and that's a drinking game for Future Commerce, said that "Anywhere there's a frontier is an opportunity for identity to be formed." And I think the Internet is a frontier. It's it's a place that naturally people have to find their identity. And so when they're given tools that just confuse them further and don't give them the space or something that's naturally human to engage with, it leaves them empty. And so I love the idea of giving people more contained, more thoughtful spaces to help them establish what those identities look like. And yeah, you're doing, like you said, two things. You're tapping into something that is more native to humanity, which is visual search. And you're also giving a structure that allows people to more peacefully and more thoughtfully craft where they fit into this new world. And I think that's super cool.

[00:13:51] Phillip: Oh, reaffirming identity. Right?

[00:13:53] Brian: Yeah.

[00:13:53] Phillip: And I think that's something to say. I also have to touch on something. There's a report that I don't think you would often see from a social platform or from a search platform about how men fit into the equation. I think this is a... We hear a lot about the manosphere. Although I think that's a charged term. Males now represent more than a third of Pinterest user base. And I think we'll dive into some of the men trend report here. But how is Pinterest catering to the growing audience? You said you're not specifically trying to cater to a Gen Z audience. Are you surprised by this trend of men's adoption of the platform in this way? And are you doing anything to try to grow that adoption?

[00:14:45] Julie Towns: Yeah, it's a good question. And I would say similar to the answer on Gen Z, we are not purposely building features specific for men. However, we are seeing the growth in engagement from men coming from very similar reasons to the growth we've seen from Gen Z. So you mentioned men make up over a third of our platform. And what we've heard from them is that they're coming to Pinterest for very similar reasons. We've recently run a study and learned that over half of men in The US believe that traditional social media is a contributor to mental health challenges in society. And so many of the men that are coming to Pinterest, I think are looking again for a reprieve from the traditional experience they're getting on other social platforms. And to have a safe space to find information or curate things for their life. And so some of the trends that are most interesting that we found in our recent trend report are men, they fit our natural use cases of health, wellness, beauty, parenting, searches for things like Pilates or Pilates workouts are up over 300% from men in particular.

[00:16:07] Phillip: Wow.

[00:16:08] Julie Towns: Which is, I know, I mean, I'm a big fan. I don't know what took men so long to learn about it, but yeah, that's an example of ways that men are using the platform. I think we're also seeing searches for things around parenting. So father and child activities up over almost 400%.

[00:16:26] Phillip: Wow.

[00:16:26] Julie Towns: And so what we're seeing is millennials, especially elder millennials like myself, but men are really redefining masculinity and they're doing that through self discovery. And so again, similar to Gen Z, they're using the platform in the same way, but they're curating and searching for potentially different topics. But I think it's resonating for very similar reasons.

[00:16:50] Phillip: Again, have to go back to my own personal experience. It's the one I can draw on the most. But, you know, I wanted to do kettlebell flow workouts in, you know, 2020, 2021, built like a home gym and a and where did I turn? I turned to Pinterest. You know, I built a home climbing wall. Where do I turn? I turned to Pinterest. And, you know, these are... I guess I hadn't even really externalized how much of a resource Pinterest is even to me. And I think this is where most consumers are, Julie, is probably not aware of our defaults and not aware of our choices when it comes to which channels are channels of preference when it comes to sourcing certain types of material or certain types of inspiration. And this is something that I think if brands understood where those defaults lie, they would make better investments in partnerships and provide better channel dollars available to go to where people's buy modes are. Because I have to believe that, you know, people's attitudes are multimodal when they're on other social platforms. But there's a pretty explicit mode of a desire to improve yourself or to find a certain facet of your identity or, you're in more of a buy mode when you're looking at things on Pinterest. Most of it can be had. Right? Yeah.

[00:19:31] Brian: Beacause commerce and identity are inherently linked together.

[00:19:34] Phillip: Yeah. Let's look at these. You mentioned the data around Pilates. I find this fascinating. There's other trends too. You said male nail art is up a 115%. Dad and son up content for 415%. How are brands seeing the opportunity here? Are they harnessing it and how are they working with you in order to leverage that to connect with their customers?

[00:20:04] Julie Towns: We have all of the trends that I just mentioned to you available to brands through our trends tool. And so there's a few ways that brands and agencies can access it. We have a tool available in our consoles that a brand can go in and filter specifically for themselves, for their own content or their own products, and today understand the audiences that they care about, what exactly are they searching for, what are they saving with intent to buy? And what are they actually shopping or clicking out and buying? And those are super powerful predictor types of trends that not only brands are using to help guide their campaigns and creative, but we're hearing are using to develop new products and new product lines. One example I've loved in recent client conversations was brands using the trends tool to help switch from one product line to another. So it was a beauty brand that was in the skincare vertical that was looking to launch new products in haircare and wanted to understand the leap and where they should enter the market. And the Trends tool was a partner to them in their research and development efforts all the way through to their launch campaign planning and messaging and positioning.

[00:21:22] Phillip: Wow.

[00:21:23] Julie Towns: So I think because Pinterest ahead of the trends, our trends report, we're very proud to share that we get our trends 80% accurate for five years in a row. And so we predict trends almost a year out because we have these trendsetters, trends spotters who are doing the pre curation months and years in advance. And so it is such a treasure trove of insight. I always think about the act of saving is a very unique user pattern on Pinterest that for a brand is like gold. When you save something, it's an intent for purchase. So pinners today are over seven times more likely to purchase a product that they've saved. It is an equivalent of an abandoned cart, but with more intent of a wish list or for a future purchase. And so all of that insight is something now that we're translating and harvesting to give to brands to make decisions about or plan their future campaigns. And so that's the partnership that we're really trying to develop with brands and agencies to give them more agency and control and understanding these behaviors.

[00:22:34] Brian: Your conversion rate must be through the roof. I've heard. I've heard. The average is higher than other platforms.

[00:22:42] Julie Towns: Yes. And growing.

[00:22:45] Phillip: Speaking of conversion rate, I'm looking for a Halloween costume at the moment. The scariest Halloween costume I could think of this year, Brian, is I might be dressing up as the reciprocal tariffs.

[00:22:57] Brian: {laughter}

[00:22:57] Julie Towns: {laughter}

[00:22:57] Phillip: That's just me. That's the scariest costume I could think of. But when I'm looking at, when I'm thinking about the there's Halloween trends, obviously, which I think is probably more of a macro trend. But you're talking about trend forecasting. Would you define things as sort of micro trends? Are there are there new ways to define how trends emerge, evolve, how things sort of divide into, cultural behaviors or how things leap from platform to platform. How do you track those? Is there vernacular around it? How do you inform brands about these trend cycles in that brand relationship?

[00:23:43] Julie Towns: Yeah. So a couple of things there. So one on Halloween, just to start with that, I think you kind of nailed it with your maybe joke of a reference on what you're going be for Halloween, although it's a good idea. In that what we're seeing for this Halloween, this upcoming Halloween, is that there's many more micro trend styles of Halloween costumes. So people are really searching for uncommon or non traditional Halloween costume ideas. So that specific search actually of uncommon Halloween costumes is up almost 200% year over.

[00:24:19] Phillip: Wow.

[00:24:19] Julie Towns: But just to give you a counterfactual, this time a few years ago, I would have shared a stat that Squid Game's costumes were up 200%. Or that was the trending grouped search. And so we're not seeing that this year and that there's not going to be like single blowout common costumes for this year. People are trying to be more creative, unique, and kind of the micro trends of smaller, more nuanced costumes, I think is really what is going to happen this Halloween season. And so, what we talk about that is really like trend atomization where culture really splits into lots of different personalized expressions of a trend or of an identity that people are forming. And so, it'll be interesting to see what happens this Halloween season. There are a few Halloween costumes that are grouping and kind of trending. So, one that I'm excited to maybe see on the streets with my kids are more food costumes. So things like lemon meringue are up or even like bug inspired costumes. And then there's certain aesthetic costumes. So like doll core or medieval castle core, cosplaying type trends. So we'll see. We'll see what happens. But I think to answer the second part of your question on how are we really partnering with brands to help them capitalize on this and really understand where the future is going. I mentioned the trends tool is one. We always come out with a trends report and predicts report at the end of the year where we do both a deep audit of using machine learning and large language models to retro inspect all of the search behavior, as well as what people are saving and curating and collecting. And then we have a team of editors as well who manually review all of that data and add on a layer of human intel to name the trend group it. We use our own LLMs to help with that as well. It'll be exciting to see what the 2026 predictions are. The team, like I said, always nails it and our trends often last two times longer the trends that you see on other social platforms because of this future planning, future curation. So that helps us to not only get it right, but know for a brand that if you invest in the trend, it's not going to be gone tomorrow. This is actually a shift in culture and in the cultural zeitgeist. So you can commit to the trend and have it pan out for you with higher confidence.

[00:27:09] Phillip: And it's so much better to be honest with you. This is the thing that I think everybody wants. We like to think about outcomes and the experience of the consumer because that's what everybody wants. As a consumer, your experience, you want to be seen as smart or clever or other people to sort of think of you as, "Oh, well, why didn't I think of that?" And, Brian, maybe this is something we could talk about in the After Dark, but it's it's probably more like a barbell shape.

[00:27:37] Brian: It is. Totally. Are you in or out?

[00:27:37] Phillip: You either want to be fully part of the crowd or you wanna be... Exactly. You wanna be absolutely unique.

[00:27:45] Brian: This unique personalized seems to be kind of weighing down one side this year.

[00:27:49] Phillip: What's wild about that, though, is that the same platform is able to provide inspiration for both. And I tend to believe with no data to back it up, so conjecture, but I tend to believe that algorithmically driven platforms that are feed based have sort get you into a mode where you...

[00:28:08] Brian: Into the zeitgeist.

[00:28:11] Phillip: Right. You're in the zeitgeist. You're in whatever's happening in the moment, and it shapes your preference in a way that doesn't give you the control. That is that is conjecture, and I'm only giving you that based on my own personal experience. And if that were my own personal experience, I would only be led to dressing up like Rumi from K Pop demon hunters this year, and that's just me.

[00:28:31] Brian: Oh, you have two daughters.

[00:28:33] Phillip: I would look great in a ponytail, maybe. I don't know. Sort of switching gears, you'd mentioned searching by vibe or sort of curating by vibe. Can you walk a little bit through the way that this works? And maybe how you're partnering with curators and creators on the platform, either with tools or enablement to help them to do that better? Because I think that brands play a part in that conversation. Brands play a part in the role of either assisting in the curating or providing data. I'm curious how you're playing that role.

[00:31:13] Julie Towns: Yeah. So I think there's two things, maybe how are we giving users more control in their visual search? And then how are we partnering with brands and creators to also bring some of that to life in curation? Is that kind of in both directions...

[00:31:32] Phillip: Yeah.

[00:31:33] Julie Towns: On the first part, you mentioned at the top Pinterest is and has always been a visual search platform and that's very unique to us and how we, with our taste graph, determine what images to share next or how to decode an image and find the items within it and shop those items. Earlier this year, we launched a series of new features that give users more control to decompose an image, is how I would describe it. So if you're kind of zoomed in on an image and you want to... I think what's challenging, I guess, with visual search first platforms is that with words, you can be very specific on exactly what you want and what you're looking for. With an image, it's hard to understand if you're interested in the entire vibe of the image or if you really love the shoes that that woman is wearing walking down the street or you're more interested in the chair sitting next to, in the street that someone is sitting on or the lamp in the background or the color palette. So I think that was an interesting challenge for our team to figure out how can we give back some sort of controls to the user to help guide what component of an image they're most interested in and want to see more of or need words to describe. And so we launched a series of features that essentially decode the image and using a magnifying glass that shows up on top of images, you can search visually and do a few things. You can identify a specific item to shop that item exactly or similar items, or we are using our visual language model to actually give words to the image. We can describe a style like athleisure or cottagecore, or this is a graphic pattern that you could also find in a pillow or in paint colors or wallpaper. And so it kind of gives the many different directions you might want to go in from an image as your inspiration point and helps us understand exactly what the user is looking for and which direction they want to go in. And so those are tools that are available today. We started in fashion and home decor, and now we're expanding to other content verticals. On the second part of your question, how are we working with curators and creators? I think of the future of commerce really is in curation and creators are ultimately the super curators on the platform, they're our taste makers. And so we've created more tooling to invite creators into helping with that curation. So for example, building boards or holiday gift guides that a brand can partner with. So if you think about on other platforms, creators' shopping lists or creator shops are effectively curated boards, but without all the amazing features that a board offers on Pinterest. And so, we're working with brands and creators more to help bridge that gap and adding the curation element that a human or a creator brings and connecting a brand's product line or product set into that experience and helping to distribute that across the platform so that pinners can more easily discover what's trending from this brand or what's the best gifts for mom this holiday season in partnership with X brand and Y tastemaker or curator. There's other tools that we're building too. For example, we have a feature called Collages, which is a digital version of a mood board or a scrapbook board where you can cut out images and stick them together. And that has become a new media type on the platform where people can use that as a spark for inspiration. And it's a great shopping vehicle as well. We found that collages are much more shoppable than kind of standard images or standard pins. So we're creating ways for brands to develop those in partnership with creators and use that as ad creative as well.

[00:35:50] Phillip: Yeah. I think about how those sorts of tools evolve to there's sort of a multiplayer aspect. I remember when iOS, I think, 14 came out and people were using the sticker function to sort of create outfit of the day notes for themselves. It's like, "This is what I look like." "This is what I look like." "This is what I look like." And I was thinking to myself, "That is first party feature of many platforms as like a feature request." So as people are sort of becoming, they're sort of ingenious in this ingenuity of the user base, when you give them a tool, that tool can become a tool for commercialization. And creators benefit in monetary sense. Right? They can actually build actual business through their Pinterest relationship. It's not just a brand who sees Pinterest as an advertising platform. I think that's what makes it a really powerful approach.

[00:36:53] Brian: Yeah. The other thing that's really interesting right now is AI is playing such a role in all of this in creating images. Searches are getting smarter, but creators have more powerful tools. And the content they can create, the speed they can create, and the fidelity they can create it is getting better and better and better. And so I would imagine you're bumping into some challenges now where there's synthetic images that are being introduced into the platform and introduced into these curated moments to augment them or...

[00:37:28] Phillip: That's so true.

[00:37:28] Brian: There's so so many different reasons why someone introduced these images in. How is Pinterest thinking about this? Because curation is such a big part of what you see as the takeaway of the platform and people it being sort of a human led activity when you start to introduce synthetic ideas and synthetic images and videos into the platform, how are you thinking about how to address those? Are they a benefit? Are they a challenge? What's the take?

[00:38:00] Julie Towns: For sure. I think there's no one size fits all. So I think AI produced images have a place in inspirational content. I think what's really important though, and the principles that we're using to make decisions here are really around transparency and control for the user. And so, across the board, we're choosing to prioritize content that is inspirational and actionable. AI generated content can fit that, but I think it's important to be transparent with the user and let them know and decide whether AI modified content is useful for them. We've recently made a decision to implement an AI modified label on any content that's brought onto the platform and saved onto Pinterest or uploaded from other means that is AI generated. And we have a model to detect that and auto apply the label so that we're being transparent with our users on when an image is Gen AI modified and not authentic or from the real world, but it could still be very inspirational. And we've also given a control to users, or a tool, that allows them to adjust the amount of Gen AI images that they see in their feeds, so the amount of images that have that AI modified label. I think that's the balance here is that sometimes AI modified images could be useful. You might want to see them, sometimes you don't, and we should let the user decide that and be transparent in the process.

[00:39:34] Phillip: I like that as an approach to giving people the control rather than having hard and fast guidelines. I think also the attitudes toward AI seem to be shifting with whatever winds of culture are blowing, and I think that allowing people to have control is always the right choice. This has been a phenomenal journey so far. I feel like we're just scratching the surface. I can't believe this is the first time we've ever had you sit down. We'd love to have you back at some point.

[00:40:06] Julie Towns: I'd love that. Yeah.

[00:40:07] Phillip: There's so much more to cover, but I do want to get to some of the transformation in your role and what you're bringing to the role in the business. So you've led Pinterest transformation to what you call a global performance platform. Obviously, you're heading up ad revenue. I assume that performance platform has something to do with ad performance. What does that mean to you? And what does performance mean in the Pinterest context?

[00:40:39] Julie Towns: Yeah. So I'll start answering that question with the consumer problem we're solving first, which is one of the biggest pieces of feedback we get or we previously got from consumers is, "I love this image," or "I love this inspiration. Where can I buy it?" It was like the number one comment. We have comments still. It's the number one comment on Pinterest. And so that was problem number one to solve is we are a shopping platform. And first and foremost, we help pinners find inspiration and then bring it into action by connecting them with the product itself and with the retailer where they can go and buy that item. And so I think that really aligns with the definition of success of performance for a retailer as well. So, how can I buy this translates into sales or conversions for a brand or for a retailer? And so there's a really natural fit between the deep problem that a consumer wants and the outcome that a brand or retailer wants that we're building on the platform. And so we've been really intentional and focused on building towards performance ads solutions that help brands very easily get their entire catalog onto Pinterest, translate that into shopping ads, and then optimize those ads to show them to users who we know are actively looking for their products or who are ready to buy based on where they are in their decision journey. And so we've grouped all of these optimization features into our Pinterest performance plus suite of tools that are effectively all of the defaults we have across our ad set to optimize for performance across targeting and creative and bidding. And what we've seen is that advertisers who are using performance plus campaigns are seeing over 15% increase in return on ad spend, which is the ultimate goal of many performance advertisers. And so I think this natural fit between our visual search platform translating into a shopping and commerce platform and optimizing for that experience is really where we're seeing success in growing our ads business.

[00:42:49] Phillip: Most folks who are in the demand side of the business and want to focus on growth are looking for diversification of channel revenue. And I think that we look at our new Modes report, for instance, and this is something we'll link down in the show notes. In 2024, among our consumer survey, 77% of consumers who said that they use AI in their journey for shopping cited Pinterest as part of their shopping journey, and they realized that part of their shopping journey is taking that journey through Pinterest. I think that whether we think about it or not, I think we're at this place right now where we think of AI as certain platforms. We go there for an AI experience. We don't realize that AI is being slowly baked into all experiences. And the ones that we consider to be better experiences that are delivering superlative experiences are ones that are being driven by more personalized, more targeted, and better data driven AIs. Pinterest does that really well. And I think better ads translates to that brands want better experiences too. This all connects back to data that we found ourselves in our primary research as well. Lastly, I do want to cover with you, Julie, before we let you go. You have a big marketing event every year. And along with that, you sort of have your big announcements. And I'm curious what took place at it. I think it's called Pinterest Presents. What was announced this year? What's on the horizon? Tell us a little bit about what is coming.

[00:44:29] Julie Towns: Yeah, thank you. So yes, Pinterest Presents is our ads focused event. We have it every fall. And this year, we really focused on visual search and all of the new tooling that we've enabled for consumers on visual search, which I shared previously, and how advertisers can participate in that new visual search experience that consumers are having on the platform. And so what we found is that first, where you show up in the feed really matters and as people are searching or decomposing their images. And so we learned that from some internal research that 45% of clicks on content in Pinterest are happening in the top 10 results in our search feed or in our related pin speed. And so we wanted to give advertisers more control to show up in the feed in top of search results. And so one of our big announcements this cycle is scaling our top of search ads to allow brands prominent placement and performance. So we're seeing that brands who are using this are seeing greater increases in engagement and click through rate. And so that's an example of a control we're giving back to a brand to curate their presence on the platform as people are visually searching. The other thing we found as we're building out our shopping platform and some trend data is that today still over 80% of purchases are happening locally in stores. So while all of the research and discovery is happening online, people are still going physically in stores and that trend persists, at least the data we have up until 2028. So it's going to be this way for some time. And so we wanted to create a bridge for both consumers and advertisers who find amazing inspiration on Pinterest and give them more tooling to understand where they can buy it locally. So we've launched a local inventory ads experience that brings forward local pricing, local delivery options, store closest to you to find and buy the product. And then lastly, the kind of big announcement I've been very excited about is an expansion to our media commerce capabilities where we're partnering more uniquely now with retail media networks in the future, other media networks as well, maybe outside the retail space to provide more self serve toolings to brands who are setting up campaigns inside Pinterest Ads Manager. So CPG is probably the best example. If I think about a beauty brand, they sell at many different retailers and ideally they want to run their ads to retailers for direct purchase instead of their own website. The challenge for a brand when you do that is you lose visibility into the downstream conversions.

[00:47:20] Phillip: Totally.

[00:47:20] Julie Towns: And you may not be able to access the unique audience from that retailer. And so, we've created a connection point with retailers to send their audiences, send the brand's product catalog, and then offer the closed loop conversion reporting so that that beauty brand can run the ads on their own from Pinterest, but still see the downstream conversion benefit and optimization in partnership with that retailer. And we've seen that retailers have been really leaned into this approach because it's helping them drive new demand for their business. So there's this really nice partnership between fixing a solution, a problem for a CPG brand, but also helping to grow in partnership with retailers' businesses. So it's been a very long time coming, I'm excited to see where it goes because I think the landscape in the retail media space is changing rapidly.

[00:48:11] Phillip: Oh, and and retail media or as it's been, I guess, renamed to Commerce Media because it it needed a rebrand, I guess. {laughter} We all had adopted the terminology. Let's change it. So because of that, it is the talk of the advertising industry today too. It was, I think, the largest section of programming. It was mentioned in pretty much every session that I was in advertising week this past week. Also, at Cannes. It is the connection point, I think, that's been missing for a long time between the transactional side of performance and the brand side of advertising. And so I love that these things are coming together. I think a media network connection into Pinterest that's in a self serve platform, I think, is sort of how it's characterized, seems like a really powerful step for folks to look at this as like, "Oh, this is a totally untapped channel for potential for us in our media mix." Fantastic. Where do people go to find out more about this?

[00:49:18] Julie Towns: They can go to Pinterest Newsroom. We have all of the announcements from Pinterest Presents there and on our Pinterest business blog as well.

[00:49:27] Phillip: Oh, fantastic. Well, I have so enjoyed this time. This has been so wonderful.

[00:49:32] Brian: Thank you.

[00:49:33] Julie Towns: I've so learned so much today too. So thank you so much, Julie, for joining us. Why don't you come back again sometime?

[00:49:39] Julie Towns: I would love to. Thank you for having me. Great questions.

[00:49:42] Phillip: Julie Towns is the VP of Ads Product Marketing at Pinterest and can't wait to see what you guys do next. Thank you so much for checking out this episode of Future Commerce. You can find more episodes of this podcast over at YouTube, or Apple Podcasts or wherever you get podcasts these days. You want to support the show, you can leave us a comment on your favorite podcast app of choice or go over to futurecommerce.com/subscribe and subscribe so you never miss another episode of Future Commerce. We have a lot coming here. Our events are in full swing. You can find out more about that at futurecommerce.com/events. NRF is coming up. We'll see you there. We are activating in a big, big way. But in the meantime, you're in the midst of q4. Our predictions and trends of our own are coming. Don't miss it. Get on the list. Futurecommerce.com/subscribe. Thank you so much for checking out this episode of Future Commerce.

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