Paypal To Acquire Pinterest? Building a “Walled Garden” For Advertisers

  • Alyx 

Update: As of October 25, 2021, PayPal has announced they are NOT interested in acquiring Pinterest. We’re leaving this post up as an exploration of the potential synergies between social companies and payment companies in general.

PayPal, the fintech company that perhaps was originally best known for facilitating eBay payments but that’s pivoted into everything from P2P payments with Venmo to buy-now-pay-later offerings and even cryptocurrency, today announced plans to acquire social sharing app Pinterest. At first, many thought this sounded like an unusual fit. Why would a fintech want to acquire an image-sharing service?

The most important reason may be the simplest: Pinterest generated $1.7 billion in ad revenue in 2020.  As the post-cookie world emerges, and it’s no longer possible to track user behavior across sites due to the deprecation of third-party cookies, the ability to directly connect ad clicks to purchases will become even more critical. If the acquisition happens, PayPal is now uniquely positioned to not just target ads for the beauty, apparel and home decor products so commonly shared on Pinterest, but to process the payment as well, thus directly confirming the conversion, revenue and potentially even the customer lifetime value.

The emergence of these types of “walled gardens” enabling advertisers to directly connect the dots is a trend we predicted in our eBook, Marketing In a Post-Cookie World. If you’re interested in learning how the deprecation of third-party cookies may change how you track ad performance in the future, you can find the eBook here.

(Disclaimer: Position in PYPL)