The Digiday Podcast: How Pinterest Went from Selling Views to Selling Clicks and Conversions, with CRO Bill Watkins

Release Date: March 11, 2025

Industry Updates: Juicy Scoops

Before diving into the main interview, hosts Tim Peterson and Kamika McCoy discuss several pivotal developments in the digital advertising and technology sectors.

1. Publicis Group's Strategic Acquisitions

• Publicis Group Acquires Loadomy: Publicis Group has acquired Loadomy, enhancing its data capabilities within its programmatic arm, Publicis Epsilon Group. Marty Swan highlights that this acquisition significantly boosts Publicis' data assets, facilitating the development of more robust AI systems for clients. Kamika notes, “Publicis is aiming to federate identity, shifting from centralized data management to client-side handling” (03:56).

• T-Mobile Expands in AdTech: T-Mobile has recently acquired Bliss, a UK-based adtech startup, for $175 million, and Vistar Media, a digital out-of-home company. This move positions T-Mobile as a late entrant into the advertising sector, contrasting previous attempts by Verizon and AT&T, which eventually exited the ad business (04:50). Tim reflects, “T-Mobile is determined to succeed where others have not,” underscoring the company's commitment (06:30).

• RGA's Transition to Private Ownership: RGA, after 23 years under IPG, is reverting to a privately owned entity. This shift is part of a broader trend where private equity firms are increasingly acquiring adtech companies. Kamika raises concerns about potential downsizing, a common practice post-acquisition (06:50).

2. Retail Media Networks on the Rise

• Target's Retail Media Performance: Target reported flat overall revenue for Q4 but saw growth in its retail media arm, Roundel, which generated $649 million. In comparison, Amazon leads with $17 billion, and Walmart follows with $4.4 billion in ad revenue. Despite the stiff competition, Kamika notes Target's potential to double Roundel's size, though it remains a fraction of Walmart's scale (07:29; 08:52).

3. TikTok's Uncertain Future in the US

With less than a month before the 75-day deadline for a decision on TikTok's status in the US, President Trump has indicated four potential bidders for a TikTok deal, though specifics remain undisclosed. Potential buyers from earlier reports include Elon Musk, Mr. Beast, Kevin O'Leary, Larry Ellison, Steve Mnuchin, Perplexity, Microsoft, and Serena Williams. Kamika compares the ongoing uncertainty to Google's third-party cookie deprecation, emphasizing the prolonged ambiguity surrounding TikTok's fate (10:06; 12:26).

4. YouTube Introduces Premium Lite

YouTube has launched a new subscription tier, Premium Lite, priced at $7.99 per month. This tier allows users to watch most videos without ads, excluding music videos and shorts. There is speculation about its potential success given the crowded subscription market. Tim expresses surprise at YouTube not including podcasts in the ad-free offering, considering their significant consumption on the platform (13:16; 15:36).

5. Promotion: Work Life's New Podcast

Kamika and Tim promote Work Life’s new podcast, "Moms at Work," hosted by Jess Davis. The podcast explores the challenges faced by working mothers and offers insights for employers to support them better. Both hosts commend the podcast's blend of personal stories and expert interviews, encouraging listeners to check it out (16:23; 17:37).

Interview: Bill Watkins on Pinterest’s Transformation

The centerpiece of this episode is an in-depth conversation with Bill Watkins, Chief Revenue Officer at Pinterest. They explore Pinterest's strategic shift from a view-centric platform to one focused on clicks and conversions, driven by significant investments in artificial intelligence (AI) and enhanced data utilization.

1. Pinterest's Evolution and Recent Success

Bill Watkins shares insights into Pinterest’s journey over the past decade. Initially focused on building a strong foundation, Pinterest is now in its "third chapter," emphasizing performance advertising. This strategic pivot has culminated in Pinterest achieving its first-ever billion-dollar quarter in Q4 2024.

"We have an end-to-end AI solution across creative, bidding, budgets, targeting... driving better results for our advertisers." (24:18)

2. Transition from Views to Conversions

Five years ago, Pinterest primarily sold views. Today, two-thirds of its ad revenue is derived from lower funnel activities like clicks and conversions. This shift is attributed to:

• Data Expansion: Scaling from hundreds of thousands to billions of SKUs, enhancing product selection and relevance.
• AI Integration: Leveraging AI to utilize Pinterest’s unique data asset of organized pins and boards, enabling more effective ad targeting and performance.
• Measurement Enhancements: Implementing robust measurement solutions, including Conversion API (CAPI) and partnerships with nearly 100 measurement partners, ensuring accurate tracking of ad performance.

"The combination of investment in shopping, more SKUs, more auction density, and utilizing our unique data with AI has propelled us to a $1.2 billion Q4." (21:43)

3. Balancing Ad Load with User Experience

Bill emphasizes Pinterest’s commitment to its mission: inspiring users while facilitating their shopping journey. To balance increased ad load without compromising user experience, Pinterest employs:

• AI-Driven Relevance: Ads are treated as content, ensuring they align with users' interests and aspirations.
• User Engagement Metrics: Monitoring user return rates, engagement, and time spent on-site to gauge ad tolerance.
• Positive Environment: Maintaining a brand-safe, positive platform by banning political and anti-vaccine ads and investing in diversity and inclusion through AI (27:39; 31:49).

"Ads on Pinterest are content, and with our AI-driven solutions, we're seeing both ad load and ad relevancy increase in tandem without sacrificing user growth." (36:42)

4. AI Investments and Transparency

Pinterest’s AI investments are central to its advertising strategy. Bill outlines:

• Data Utilization: Pinterest’s extensive data, with over 500 billion pins organized into 10 billion boards, provides a rich foundation for AI training.
• AI Enhancements: Significant investments in GPUs and large language models have amplified AI capabilities, driving double-digit growth in user engagement and ad relevance.
• Transparency with Advertisers: Pinterest offers advertisers flexibility in using bundled AI solutions or testing individual features. Additionally, the platform maintains transparency by allowing advertisers to understand and measure AI-driven outcomes.

"We’re the antidote to the toxicity of social media, engineering the most positive app on the Internet." (48:55)

5. Pinterest’s Unique Positioning

Pinterest positions itself at the intersection of search, social, and commerce. This unique blend allows it to serve as an inspirational hub where users not only discover new ideas but also seamlessly transition into shopping those inspirations.

"In 30 years, I’ll tell my kids I worked for a company whose sole aim was to inspire the world." (53:14)

6. Success Stories and Performance Metrics

Bill shares notable success stories showcasing Pinterest’s performance advertising effectiveness:

• Pandora: Achieved a 73% increase in ROAS, a 79% rise in checkout volumes, and a 44% reduction in CPA.
• Prada: Experienced a 64% decrease in CPA and a 30% increase in conversion rates.
• Overall Impact: Since launching Pinterest Performance Plus, advertisers have seen an average 20% gain in efficiency across various metrics.

"Our ability to drive better performance metrics underscores our AI investments and data utilization." (44:43)

Conclusion

This episode of The Digiday Podcast offers a comprehensive look into Pinterest’s strategic evolution under the leadership of Bill Watkins. By prioritizing AI and leveraging its vast data assets, Pinterest has successfully transformed its advertising approach, resulting in significant revenue growth and enhanced advertiser performance. The discussion also highlights broader industry trends in adtech acquisitions, retail media expansion, and the ongoing uncertainties surrounding TikTok’s future in the US.

For those interested in the intersection of digital advertising, AI, and user experience, this episode provides valuable insights into how Pinterest is navigating and leading within this dynamic landscape.

Timestamp References:

• 03:56 – Publicis Group Acquisition Discussion
• 04:50 – T-Mobile's AdTech Moves
• 06:30 – T-Mobile’s Determination
• 06:50 – RGA's Privatization Concerns
• 07:29 – Target’s Retail Media Comparisons
• 08:52 – Target’s Growth Potential
• 10:06 – TikTok Deadline and Speculations
• 12:26 – Comparison to Google’s Cookie Deprecation
• 13:16 – YouTube Premium Lite Launch
• 15:36 – Potential Subscriber Reactions
• 16:23 – Promotion of "Moms at Work" Podcast
• 17:37 – Host Endorsement of New Podcast
• 21:43 – Pinterest's Revenue Shift Explanation
• 24:18 – AI Solutions Driving Ad Performance
• 27:39 – Balancing Ad Load and User Experience
• 31:49 – Metrics for User Tolerance
• 36:42 – AI and Ad Relevancy Success
• 43:26 – AI Investments and Data Utilization
• 44:43 – Transparency and Ad Flexibility
• 48:55 – AI Transparency with Advertisers
• 53:14 – Pinterest’s Unique Positioning
• 55:31 – Closing Remarks