Are Pinterest ads worth the price?
FORTUNE — Last month, Ad Age’s Cotton Delo reported that, in Pinterest’s early tests for ads, the startup is asking advertisers for $1 million to $2 million spending commitments. Further, Pinterest, which is in the very early stages of monetizing, wants $30 to $40 CPMs, or cost per mille (cost per thousand impressions), the standard for measuring media.
That’s pricey. For comparison, the average CPM across the web in 2012 was $2.66. In general, advertising rates are rising as the digital media industry pushes for greater standards, transparency, and more premium offerings with better targeting.
Pinterest clearly sees itself in the premium category; the question is whether advertisers will bite. Pinterest has said it will kick off beta testing with a handful of brands this quarter. Industry buzz is that the company has been in talks with Kraft and Samsung. Pinterest will make its Promoted Pins widely available to advertisers in the fourth quarter.
A new study released this week shows the high price tag may be worth it. The study was conducted by Ahalogy, a startup selling Pinterest analytics and tools, which is clearly biased in favor of Pinterest. If Pinterest can win significant ad dollars from brands, it will buoy the entire fledgling ecosystem of startups building advertising tools for the platform, including Ahalogy, Tailwind, and Curalate.
According to the survey, Pinterest’s 60 million users are just the kind of audience advertisers want to reach: They’re “millennial moms,” and 295 of them are aged between 15 and 29. Two-thirds of them have tried a new recipe from Pinterest, and 59% have tried a new project because of Pinterest. Almost half have done six or more new projects because of Pinterest. They are taking action based on their pins. Oh, and they’re harder to reach, too: According to the survey, Pinterest users watch less TV than non-users, and half of them say they spend less time reading magazines, newspapers, and catalogs since joining Pinterest.
The study confirms what many have suspected about the platform: Its users are extremely valuable because they’re on Pinterest with the intent to take action. Bob Gilbreath, president and co-founder of Ahalogy, said Pinterest users’ behavior more closely resembles Google search than social media behaviors.
“These people are looking for projects and new things to do using Pinterest,” he says. “In stores, it’s their shopping list.” People are searching for recipes they pinned to get their ingredients or seeking out a specific article of clothing they saw on Pinterest. “That is a growing habit that is a game changer,” Gilbreath said.
What’s more, users say they’re open to brands: 87% of users said they’d rather follow a favorite brand on Pinterest than a favorite celebrity. Etsy, Victoria’s Secret, Target, Starbucks, and Jo-Ann Fabrics ranked among respondents’ favorite brands. Almost three-quarters of respondents were neutral to positive about the arrival of ads on Pinterest.
Ahalogy and its competitors are eager to preach the gospel of Pinterest, even if Pinterest itself is not. Pinterest has been extremely careful and secretive about its plans. Advertisers haven’t been offered much in the way of information on Pinterest’s user demographics, or their habits on the site. The company took years to release an API for brands to use to build advanced tools. With $563 million in venture funding, the company has been in no hurry to monetize. Now that it is, brands are likely to watch very closely.