May 15, 2023

 

Pinterest recently announced a partnership with Amazon Advertising whereby Amazon will be able to offer ads from its vast advertiser pool directly on Pinterest.

 

CEO Bill Ready explained the rationale - “Pinterest was really solving digital window shopping but the actionability was low. So, it's sort of like Pinterest digital window shopping, but the stores were closed. We are opening the stores.”

 

Pinterest wins by bringing more advertisers onto its under-monetized platform, while Amazon gains surface area to offer and measure contextual ads. Brands benefit through the remix of these two platforms, providing them a new option to reach consumers.  

 

However, the partnership will challenge brands that have not integrated retail media efforts into their broader media efforts.

No Amazon team is managing Pinterest spend

Most consumer brands simply aren’t organized in a way that provides them a clear path forward for a partnership like this.

 

For most, a marketing organization is managing Pinterest spend, while the Amazon team, sitting in the sales organization, is driving Amazon Ads. These groups have different incentives (often reach vs. driving sales), and therefore different ideas on how to activate and measure performance. It’s tough to resolve this because politics, power and pay are inherently wrapped up in all of this.

 

The partnership challenges this set up.

  • Pinterest has suddenly become a bigger sales driving opportunity
  • It’s unclear if a brand should activate through Pinterest or Amazon or both
  • Budget shifts are going to be needed but it’s less certain which team should fund it

 

Most brands will struggle to move forward.

 

They’re not using Attribution or AMC to understand where to direct traffic. They lack clear sales and marketing goals to guide them on how they can leverage a Pinterest + Amazon opportunity. Many won’t even have the budget flexibility to participate when it comes to market because they set budgets once a year.

Here’s the thing…

A siloed endeavor was more acceptable when it was small dollars and isolated to just the Amazon account. But now it’s big dollars and every major retailer has a media offering.

 

Leaders must dive into retail media integration today. Here are five questions every CMO should be asking:

  1. What role can (as opposed to does) retail media play as part of our full toolbox of marketing activation options?
  2. What commercial benefits does retail media offer that alternative media simply doesn’t?
  3. Are incentive differences between our marketing and sales teams influencing strategic and tactical recommendations, and how do we referee this?
  4. How is retail media performing compared to our other media options?
  5. How do we make our budgeting process more flexible so that we can test new efforts like this one?

 

Keep in mind, this is just the beginning.

 

Pinterest won’t collaborate exclusively with Amazon forever, nor will other social platforms sit on the sidelines if the partnership is a roaring success.