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Pinterest Rises on Better Advertising Potential
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Pinterest Rises on Better Advertising Potential

It’s no secret that digital advertising has been on the decline lately. However, marketing professionals suggest that there are at least four ways to attract potential customers to your product or service, even when they have decided to cut back on spending. Social media site Pinterest (NASDAQ:PINS) may have discovered just such a strategy, and investors are responding positively, with Pinterest’s shares up nicely in Monday afternoon’s trading.

These marketing professionals typically rely on four primary tactics in such situations: lowering prices, changing distribution channels, enhancing promotion, or improving the product itself. These four tactics are known as the four P’s of marketing. According to recent reports, Pinterest is focusing on improving its product by enhancing its advertising technology.

UBS analyst Lloyd Walmsley noted that Pinterest has formed several partnerships in the ad tech field, including with operations such as LiveRamp. Partner monetization and more efficient advertising, Walmsley suggested, were likely to improve advertising performance. Consequently, while advertisers are reducing their overall ad levels, Pinterest could weather the downturn by becoming the go-to social media advertising platform of choice. With TikTok potentially facing a ban in the United States and other social media giants struggling to differentiate themselves, Pinterest may gain a significant advantage by being the best in the business.

Analysts are somewhat skeptical about this. With six Buy ratings and 16 Hold ratings, analyst consensus considers Pinterest stock only a Moderate Buy. Further, at an average price target of $28.19, it comes with slight downside risk potential.

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