Pinterest Inc (PINS) 2020 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Pinterest Fourth Quarter Earnings Conference Call. (Operator Instructions)

I'll now turn the conference over to Doug Clark with Pinterest Investor Relations. You may begin.

Thank you. Good afternoon, and thanks, everyone, for joining us. Welcome to Pinterest's earnings call for the fourth quarter and full year ended December 31, 2020. I'm Doug Clark of Investor Relations at Pinterest, and joining me today on the call are Ben Silbermann, Pinterest's President and CEO; and Todd Morgenfeld, our Chief Financial Officer and Head of Business Operations.

Now I'll cover the safe harbor. Some of the statements that we make today regarding our performance, operations and outlook, including the impact of the COVID-19 pandemic, may be considered forward-looking, and such statements involve a number of risks and uncertainties that could cause actual results to differ materially. In addition, our results, trends and outlook for Q1 2021 are preliminary and not an indication of future performance. We are making these forward-looking statements based on information available to us as of today, and we disclaim any duty to update them later unless required by law. For more information, please refer to our risk factors discussed in our most recent Forms 10-Q and 10-K filed with the SEC and available on the Investor Relations section of our website.

During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in today's earnings press release and Letter to Shareholders, which are distributed and made available to the public through our Investor Relations website located at investor.pinterestinc.com.

And now I'll turn the call over to Ben.

Hi, everyone. Thank you for joining us today. I hope you and your families are safe and healthy. Just a short while ago, we announced our results for Q4 and all of 2020. Since it's a new year, I'm going to spend a bit more time than usual reviewing our progress and looking forward with our strategic priorities. Todd is going to then follow up with more about the financials, and then we'll open it up for questions.

I'll start by saying that I feel good about our progress in 2020. It was obviously a trying year for everyone because of the pandemic as well as some social and political unrest, and our company had to adapt quickly. I want to start by saying a huge thanks to our team for their resilience and dedication. As the results show, the hard work paid off. In Q4, monthly active users grew 37% year-over-year to $459 million. Revenue in the quarter grew 76% year-over-year to $706 million, and we were profitable on a non-GAAP basis for 2020. We're proud of this progress, and we're focused on continuing to deliver on our mission.

Now as I've told you before, our mission is to bring everyone the inspiration to create a life they love. And it's never felt more important than it is now. We hear this from folks all the time. People need a place to dream and be optimistic, away from politics and bad news; they need a space to focus on themselves based on what they want to do, not what other people will like. And businesses want to reach people early in the planning process, before they decide what to buy for their lives. Even creators are telling us that they want a place to do more than just entertain; they want to be able to enrich other people's lives. And with that in mind, I want to share with you our 4 priorities for 2021, designed to advance our progress against that mission.

The first priority is inspiring content. For us, everything starts with inspiration. It's why people come to our service. It's why businesses come to connect their products and services with the people who will love them. And so we want to continuously evolve the way that we inspire our users.

Historically, we've empowered Pinners to bring their favorite content from the Web onto Pinterest. Today, we continue to invest in emerging formats like video, which represents dynamic new ways to deliver inspiration, like how-to tutorials and incredible storytelling from brands. We're also now expanding our focus to bring the most inspirational people onto Pinterest: creators. Thanks to creators, Pinners can learn recipes directly from great chefs, get home decor tips from interior decorators or get style tips from incredible fashion designers.

At the end of last year, we introduced Story Pins to give creators a new way to publish short-form multipage content, and stories are different on Pinterest than other platforms. They're less about what somebody else did, and they're not as focused on entertainment; they're more about you, what the Pinner could do to enrich their own lives. And we're seeing this happen across a number of categories.

For example, in the shareholder letter, we highlighted a personal trainer, Dennis Dixon. Last year, he used Story Pins to show simple workout routines to do at home with ordinary things like a laundry bin. And his content has been viewed more than 10 million times, which is positive for his brand, and it's great for our Pinners.

We're just getting started here. We've learned from our investments in both video and shopping on Pinterest, that it takes time to reach scale and broad adoption, but it's ultimately worth it because it delivers a richer experience for Pinners. The same can be true for our work with creators, and that's why we're committed to this for the long term.

The second priority is deepening the Pinner experience. Last year, we talked about making Pinterest more useful in introducing people to more use cases. We made progress. We improved the relevance of recommendations. We brought on more diverse content and with features like the Today tab that offer inspiration relevant to that day.

This year, we want to expand that focus. We want to make sure that whatever way a Pinner goes in their journey, they will have a first-class experience. This means new technology and products to improve how folks explore and find products they love with shopping tools, visualize and plan their futures with boards and new AR products like eyeshadow Try on feature that we just launched, and collaborate with others on projects with features like dates and notes. Of course, Story Pins will be part of this, too.

And finally, we'll continue to focus on content safety so that Pinners can do all of this in a positive environment, free from so much of the negativity you see in other places online.

Our third priority is helping advertisers succeed. One unique aspect of Pinterest is that people often come to plan early, sometimes months ahead of time. And it's an opportunity for businesses to reach consumers before they've made their decisions. Unlike other services, where ads are sometimes seen as a distraction, ads on Pinterest can actually enhance the user experience, because people come there with the intent to buy things for projects like remodeling a home or buying a new outfit. And relevant ads from businesses help them discover what they want.

So making advertisers successful is critical to achieving our mission. That means continuing to invest in automation and tools to make it easier to advertise and meet goals, that means scaling our sales team significantly to bring on new advertisers, investing in content safety so that brands are showcased in a positive space, and finally, offering more insights about future trends to help advertisers get the most value for their dollars.

The fourth and final priority is shopping. To us, our mission isn't complete unless we help people create the life they dream about off-line. And so often, being able to buy the ideas they see is what makes that action possible. Last year, we made progress on the shopping front. We made it easy to switch directly into shop mode from the search query, and we introduced new features from merchants, all of which led to a 6x increase in shopping advertisers on Pinterest in Q4.

This year, we're planning to build on this momentum by continuing to help more businesses get their products on Pinterest and help Pinners discover, evaluate and buy products throughout their shopping experiences. Finally, we want to expand these features more globally, so that no matter where you live, you can shop on Pinterest.

So that's a brief look at the 4 priorities for the year ahead. We're excited about progress, but more excited about the opportunities ahead. And with that, I'll turn it over to Todd to expand on the financials.

Thanks, Ben. I'll now go into some further details on the trends we saw in Q4 as well as to provide a preliminary outlook for Q1. I'll start with a quick summary of the headlines and then go into more detail.

As Ben mentioned, we had a very strong fourth quarter. Revenue grew 76% year-over-year with adjusted EBITDA margins of 42%. Monthly active user growth remained strong, with all major regions once again growing in the double digits. Ben mentioned this earlier, but I want to echo it as well because it's a tremendous achievement. We added over 100 million monthly active users globally in 2020. That's more than we've ever added in a year. It's incredibly exciting to see so many people searching for and finding inspiration on Pinterest.

Looking ahead, we expect our revenue to grow in the low 70s percent range year-over-year in the first quarter. We also expect to maintain our total non-GAAP operating expenses in the first quarter at a similar level compared to the fourth quarter. There were 2 primary drivers of strength in Q4. First, and similar to the third quarter, our strategy is working, and our team is executing well. The investments we've made in technology and in sales coverage are continuing to pay off. Over the last year, we've invested in our ability to better deliver returns accountable performance advertising, including scaling conversion optimization ads, shopping ads, and building improved automation to help advertisers of all sizes more easily onboard and realize the value of being on Pinterest. We also expanded our sales team in Western Europe to monetize our engagement there.

Drilling down, auto-bid was once again a meaningful contributor to our strength in Q4 and was especially so for small and medium-sized businesses. And I'm pleased that our international business grew 145% year-over-year on the back of strong advertising demand. International markets now represent 17% of total revenue. Given this momentum, we plan to continue to invest to best serve Pinners, merchants and advertisers against the key priorities that Ben mentioned earlier.

Second, beyond our own investments, a strong overall online holiday season drove healthy advertising demand. We saw broad-based strength across advertiser verticals, sizes and objectives, with the biggest improvement in growth from retail advertisers. Importantly, our team executed well against this backdrop. Our sales and marketing teams built an insights-led go-to-market program over the course of 2020 that helped us deliver against Q4 seasonal moments.

This program showcased the commercial intent of our users and helped businesses create better performing campaigns through the holiday season as a result. That helped prepare advertisers for the earlier start to holiday shopping this year and continue seeing results as the shopping season persisted longer this year. Let me give 2 examples. The LEGO Company created a holiday campaign based on popular search terms on Pinterest. Seeing increasing search trends for creative kids gifts allowed the LEGO company to tailor and serve ads at the right moment ahead of the holiday season.

Another example is the luxury coffee company Nespresso. They partnered with our teams to uncover key consumer trends around the holiday season, including search trends and consumer intent around holiday gifting, coffee recipes and seasonal flavors. With a better understanding of both auction dynamics and Pinner behavior, Nespresso delivered effective advertising campaigns that also showed positive results in a third-party brand lift study.

Turning to our preliminary outlook for Q1. We expect to grow revenue in the low 70s percent range in Q1. As we think about Q1 and the full year, we expect positive trends from our investments in ad tools like shopping and automation and sales coverage expansion to continue. We plan to expand our international coverage further in existing geographies and also expand monetization into Latin America in the first half of the year.

We also want to be mindful that we'll be navigating a fluid landscape. We're keeping an eye on a few things. First, the impact of COVID on users and engagement. Since COVID appeared, we know that more and more people have come to Pinterest to find inspiration. We could see some of that reverse as restrictions ease. Second, changes to privacy in the measurement landscape. This could impact the industry's ability to attribute conversions or serve relevant content.

Finally, before opening it up for questions, I want to touch on expenses. We continue to navigate a more remote working environment while maintaining investments in the long-term strategic priorities of the company. In the fourth quarter, we grew headcount 15% year-over-year. As we look to Q1, we expect to maintain our total non-GAAP operating expenses at a similar level compared to the fourth quarter, driven by investments in our key strategic priorities, including content, engagement, advertiser success and shopping.

Thank you to the teams at Pinterest, our advertising partners and all the people that come to Pinterest to find inspiration. And with that, we can open it up for questions.

(Operator Instructions) And your first question comes from Heath Terry from Goldman Sachs.

Great. I was wondering if you could give us a bit of a sense of the key verticals driving the incredible growth in advertising that we saw this quarter. Obviously, e-commerce was incredibly strong market-wide. How much of a factor was that, given the transactional nature that Pinterest participates in? And then as we think about the opportunity internationally, how have you seen the current environment and, certainly, the acceleration in -- or the return of lockdowns in those markets impact Pinterest adoption by advertisers in the markets where you've begun to roll out and monetize your sales force?

Thanks, Heath. So on the vertical question, I heard 2 questions in there. One was around verticals. And then the second was on lockdowns, particularly internationally. I'd start with really the retail vertical, like I called out in the opening remarks. We had a longer holiday shopping season this year than we've seen historically, and that built around seasonal moments, tended to coincide with a big return of demand in retail. So that was the biggest driver. But we saw strength across really every vertical. Travel still is a laggard. But in general, retail, CPG and a number of other verticals really performed well. We saw strength across objectives. We saw strength in large advertisers through the small and medium-sized advertisers. So it was a remarkably strong Q4, but anchored by the longer holiday shopping period with an emphasis on retail.

On the lockdown point, that's why I want to call out some of the issues going into this year. The COVID environment impacts our user growth, it impacts engagement trends and it impacts the ad market. What I would say is that we saw a great strength in international markets. As we mentioned, we've grown -- we grew in the fourth quarter, 145% year-over-year, which was remarkable performance and coming on the back of scaling those teams and putting in place a great playbook. It is also a situation where our team had to navigate a very dynamic COVID environment. And as you referenced, as markets open and close, that impacts demand to some extent, but we were able to navigate through that to still post remarkable growth in the fourth quarter. If we were to see lockdowns persist through the course of the year, that may create some uncertainty, but our guide reflects what we know today.

And your next question comes from Eric Sheridan with UBS.

Maybe just following on what Ben said during his prepared remarks, a lot of progress made in '20. Can you just sort of lay out for us what you see as some of the key investments you need to keep making in '21 and '22 and beyond, when you think about the opportunity sets that sit in front of you, whether it's geographic or product or sort of unlock on the demand side? And help us better understand how you're going to align investments against realizing that potential in the coming years.

Sure, Eric. I'm happy to. Let me just start by saying we have a long road map ahead of us on both the consumer side and as well as on the advertising side. And I'm going to start on the consumer side because that's where a lot of the investments start.

The first thing I mentioned is that we're going to continue to innovate on the form in which people get inspiration. And this is really important. We've made long-term investments in video, and you've seen that reflected, as Todd mentioned, in a significant uptick in video views and uploads. And we're beginning to expand that by enabling traders to publish directly onto the platform. That's going to be a long investment, but we think that it can continue to drive new digital experiences for users, both in the U.S. but also internationally, where some of the web content ecosystems that the U.S. relied upon are less mature. So that's a significant focus. We talked a little bit about the areas of engagement that we're going to be driving by improving the product and making it more useful.

And then finally, we'll continue our investment in shopping. And so look, core to our mission is that we see shopping as this bridge between the 2 halves of our mission, inspiration and action. And so for Pinners, we've made progress by expanding a number of surfaces to let them shop. We have things like search, tools like Lens, the ability to shop from boards, the ability to shop trends. And we saw a significant uptick in product search in 2020; it went up about 20x last year alone. We need to continue that.

On the merchant side, we want to continue to invest in catalog upload; it would include storefronts, new ad formats, like dynamic collections. But all of this is after a pretty simple experience where somebody can go from inspiration to purchase as seamlessly as possible.

So those are sort of the big bets on the consumer side. And then as you noted, on the advertiser side, all of those follow as well. So in 2020, we introduced a lot of tools to support a diversified advertiser base, really focused on making it easier for mid-market advertisers and managed SMBs to scale their spend. So that's why we repeatedly talked about automation.

Moving into 2021, one of the big areas that we're focused on is driving more relevant ads, and we're going to do that by growing the number of advertisers. We think that if we can provide really relevant ads, especially in surfaces like search, it's a win-win. It helps consumers because they're seeing inspiring content relevant to what they do every day. It's great for advertisers because they're finding consumers who are early looking for inspiration, but they haven't yet decided exactly what they're going to buy.

So to do that, there are a bunch of areas that we're investing in. On the tool front, we want to make Pinterest easier to use, easier to deploy your budgets at scale and easier to get results. So examples of investments there: a continued investment in automation; investment in agency tools, and this is especially important internationally, where agencies control a lot more of the spend. It's the #1 pain point, is having a better agency tool. And then finally, partners and integrations, finding ways to [both] new merchants and help them onboard as easily as possible.

On the measurement front, we are going to be more accessible, comprehensive, and better with our first-party insights. And so in Q4, we expanded conversion insights, which help you understand paid and organic GMV together. We provided Pinterest conversion analysis, which provides a suite of reports that helps advertisers measure the impact of longer attribution in those. And we continue to invest in first-party insights. We just introduced, for example, brand lift studies, first-party, that just make it easier for advertisers of all sizes to measure the impact of their awareness campaigns. So think of measurement as an evergreen investment for us because the industry environment is constantly changing.

Last but not least, format, so important for advertisers. We've already talked a little bit about investment in video. We're also going to invest in sponsored Story Pins over time. So as we grow the creators' ability to publish stories, we want to enable them to monetize that.

So I know that's a lot. That's a broad overview. And hopefully, the framework of those 4 priorities I provided up top can kind of help us kind of guide how those investments. But you'll be hearing a lot more about those priorities from us in the subsequent year. And we're looking forward to making the experience that much better for Pinners and for advertisers.

Next question comes from Justin Post with Bank of America.

Two questions. Obviously, big progress on the user growth this year. One of the concerns was the demographic. Did you see progress like expanding the demographic out of your core this year? Anything to comment there? And where do you, Ben, see the next 0.5 million -- 0.5 billion users coming from?

And then maybe one for Todd. With the privacy concerns, does this cause you to maybe try to accelerate activity, first-party activity and shopping on Pinterest versus other platforms?

Sure, Justin. Let me start off on talking about user growth. So we saw really strong user growth in the U.S. and globally. As a reminder, we had 10 million U.S. monthly active users in 2020, we doubled the amount that we had last year. And in terms of specific segments, we saw real strength with Gen Z. So once again, people that are under 25 grew faster than the overall population, and we see that as a positive sign. We see that these users -- they want more spaces where they can explore their own interests and hobbies. They feel well-served in connecting with social platforms and with their friends, but there's a real desire to have new ways to explore their own interests.

In terms of the next wave of growth, I think one obvious area continues to be international growth. While we've seen really, really strong growth patterns there, we still are relatively underpenetrated relative to the number of Internet users that there are globally. Some of the investments that we're making in 2021 are not directly after growth but we think will benefit international growth in the long-term when we execute them well -- things like a shift overall to video, which increasingly is the default format that people use to get inspiration as well as the ability to share inspiration directly and publish with tools such as Story Pins.

As a reminder, when Pinterest started, we really enabled people to curate the Web. But the Web ecosystem in the U.S. was far more mature than in some other countries where we're starting to grow. And so the ability to publish natively on your phone, and in particular to use video, we think represents, over the long term, a really to high growth opportunity.

The final thing I'll say is that we don't think of things like shopping as direct drivers of growth, but people want to use useful products. And as useful as it is to see inspiration, it's that much better when you can go from something inspiring that you see to a product from a retailer that you trust at a price that makes sense for you. So as we begin to roll out shopping features internationally as well as just mature those features, so they're more consistent and experience is that much better. We think over time that utility will attract more users.

Thanks, Ben. So on -- Justin, thanks for the question on privacy issues. And I guess, I know this is coming up a fair amount these days. I would summarize by saying that we're investing to address this issue in ways that we can control. But conversion visibility is likely to get tougher. This is not a surprise. We've been talking about this for some time, the privacy and regulatory environment has been evolving over the last period of time here. So what are we investing in? I think you nailed it. First-party signal is important. And while we're less mature than other platforms on this front, our road map in 2021 starts to chip away at the gap around conversion visibility in terms of things that we can invest in and deliver from an R&D perspective.

There are headwinds as many people have been commenting on Apple's new rules and the enforcement around those rules and the opt-in rates from users will impact the extent of any headwinds that we see in the industry, and we're keeping our eye on that. So there are trends in both directions. One, we have an opportunity to continue to build out measurement given where we stand relative to others in the industry, but we have headwinds.

And your next question comes from Colin Sebastian with Baird.

A couple of questions from me. I guess, first off, just given the success with shopping content and advertising in Q4, I mean, it sounds like it's still early days in the opportunity, but hoping you can provide a little more context on the growth in shoppable inventory and maybe the rate of ingestion of listings and product catalogs. And then as a follow-up to Justin's question on privacy, just curious, I think we all gather the fact that with direct response advertising that a search orientation has advantages relative to some of the other advertising models, and it seems like Pinterest would be in a relatively advantaged situation from that perspective. Just curious if you agree with that? Or are there other factors that we should be considering?

I'll take the first part of the question and maybe Todd can take the second question. So just stepping back, shopping is indeed really important. And as we said in previous calls, the strategy is really twofold. On one side, we want to make sure that there's great shoppable inventory from great retailers with up-to-date metadata. And then once we have that inventory, we want to be able to seamlessly move our users from inspiration -- whether that's while they're searching, or they're browsing, or they're using a product like Lens -- into their shopping experiences.

So your question was more specifically about the growth in shopping inventory. Looking in -- going from Q3 to Q4, we increased the number of active catalogs by over 60%. And we also have really improved the discoverability of those products. And so in Q4, we expanded the scope of shopping engagement, and we allowed Pinners to pivot into that shopping mode from any each search query.

That's resulted in a really significant uptick in product search. It's grown roughly 20x in last year. But I do still think that we're in early days. We're certainly in early days in terms of international rollout. But even from a user experience side, while we've made a lot of progress, we still have a gap to close before we reach that vision of being able to go from an inspiring scene or an inspiring video or an inspiring story directly to a set of products that are easy to buy. And that's something that we're excited to invest in.

I'll also say that on the advertising side, we do see shopping advertising growing faster as a proportion of our overall revenue growth. And as just one example, Wayfair has really scaled their shopping campaigns with us over the past year, primarily because of measurement and the ability to drive incremental sales. So we think those are kind of great early indicators, but it is early days for us, and we're going to be working hard to improve that experience over 2021.

So Colin, on the second question about being advantaged because of the search characteristics of the platform, I would start by saying there's a fair amount of uncertainty around this in general. So I don't want to overstate what we know. But what we do know about our platform is that we have a high degree of commercial intent and planning behavior, and that planning behavior drives a fair amount of on-platform signal. So things like board creations, things like visual and text-based queries, saves that are based on that planning behavior, that creates a fair amount of on-platform signal that helps to inform targeting. And so relative to other platforms, off-site signal is probably less important for us because of the intent that we're able to capture first-party on our platform.

All that said, when you think about measurement, there are some product improvements we can continue to make on that front, but that's where the ambiguity comes in. And I wouldn't want to overstate our position relative to others. But I think from a targeting perspective, we're in an enviable position based on the use cases and the planning behavior of our user base.

And your next question comes from Doug Anmuth with JPMorgan.

I apologize if I missed it, but I was just hoping you could clarify a little bit around what you're seeing with volume and pricing dynamics, just kind of overall impression growth, and the degree to which you're also growing the advertiser base and how much that might be contributing to auction density and what you're seeing on the pricing side there?

Thanks, Doug. So what I would say is we're seeing more balance these days in terms of both impression growth and pricing growth, driving volume. So in the past, we talked a lot about most of our revenue, if not all of our revenue growth being driven by impressions as opposed to effective CPMs or pricing. What we've seen and saw in the fourth quarter and through the course of 2020 is that there's far more balance in that. And we've started to see, as we've been telling you over time, eventually, pricing will start to contribute more to our revenue growth, and that's exactly what we're seeing. That's in part due to industry-wide demand and auction pressure.

We've continued to grow the number of advertisers on the platform and gotten more share of wallet with our incumbent advertisers, which has been important. And the most encouraging part about this is while pricing has increased across objectives, we've seen the most pricing opportunity and results in our performance against performance objectives where we're better utilizing or becoming more efficient in delivering against the ad inventory that we have. So it's not necessarily driven as much by cost per action, but by more efficient delivery of those slots, which is a really encouraging trend. I don't know if that gets to your question.

That's helpful. Maybe just a follow-up on that. I think we've talked in the past just about the degree to which you're able to kind of have, let's say, contracted type of spending as you look out on the year, for example, and bigger partnerships with agencies, anything that you can add there in terms of commentary, just as you think about 2021, perhaps how that's increased over the last couple of years?

Yes. It's a good question. And it highlights one of the other issues that I raised about the uncertainty going into 2021. I would say a couple of things. While we're hearing really positive feedback from advertisers. We're hearing that ads are working. They really value the brand safety of the platform. And this is a year where we were really able to deliver value around the commercial intent of our users by packaging insights. So the insights trend that we've been talking about generally is getting out in front of consumer trends to help advertisers map their campaigns to that kind of behavior. And that creates both more relevant advertising as well as better results for the campaigns for -- so both from a user and an advertiser perspective, that's great. But in this COVID environment, what we're hearing from advertisers is they're looking for more flexibility. Long-range large commitments are fewer and far between in this environment, but we're hearing a lot of feedback, positive feedback about wanting to spend. It's just less contractual than it was probably in prior years.

And your next question comes from Brian Nowak with Morgan Stanley.

I have 2. The first one -- I appreciate the color on the increase in shopping advertisers in the fourth quarter and Ben's further comments about the focus on growing the advertiser count. I guess as you look into '21, can you just sort of talk to us about the qualitative investments or the areas that you really need to execute on to continue to grow that advertiser count healthy throughout the course of the year, whether it's Shopify, people, whatever it takes. Just curious what we should be monitoring to grow that advertiser count.

And then secondly, on the international side, can you guys give us some examples of technologies and ad products that are currently rolled to the United States but have not yet been rolled internationally that you think could help the international growth throughout the course of 2021?

Sure, Brian. Let me start with your first question, and Todd can chime in, if there are things that I've missed. The question as I heard it is kind of what are the qualitative investments that we need to make as a company to grow the number of advertisers that can get value. And we've talked a lot about this, but part of the reason that we've focused so much on things like automation is we want Pinterest to be an easy place to buy, an easy place to spend, an easy place to get really great results. So we are going to continue to focus on investing in automation features, and that disproportionately benefits advertisers that may have fewer resources to dedicate to Pinterest as a platform, so especially those mid-sized businesses that can kind of fill out the middle and long tail of advertising. That's a really, really helpful area.

Related to that and actually related to your second question about what specific features we haven't rolled out globally fully that could be helpful really come down to things like those agency tools. So look, the #1 pain point from agencies is actually only having full access options to manage business accounts versus granular permission access. So being able to allow multiple people kind of in the agency to have access control. And that's really important. And so we're looking forward to bringing that out later in the year. And then the other thing internationally that we're doing is we're simply going to be opening up new markets. And what's enabling that is the hiring of sales teams in new geographies.

Earlier, there was a question, I think, from Justin talking about how we think about the growth of our user base, and historically and ongoing, we really think about growing in markets where we see line of sight to monetizing them in the next few years. And so we're continuing on that plan. So as we continue to grow users in advertising markets that are mature, we then begin seeding and building teams in those markets. And then we end up opening business in those markets, and we plan to open up more markets this year, which should be a good long-term trend for the business overall. Todd, anything to add there?

I think that covers most of it. I think -- and the only thing that I would add that we're doing a little differently in international markets relative to what we've done in the U.S. is we're investing in that smaller and medium business tier of advertisers, more in parallel internationally relative to what we did in the U.S., which was more sequence. So a lot of what Ben talked about building on the product side will apply more directly to SMBs outside of the U.S. to quicker. We talked about the agency tools, which are in beta. Some shopping features will be rolled out more comprehensively internationally over time, too, and that will be important.

And then we're marketing. One of the things we haven't talked about here is -- on today's call that I've talked about in the past was our ambition to drive more comprehension of the product, which we think will benefit users' engagement in the advertising market. Our expectation is that the deferred marketing spend that we were anticipating last year will be rolled out this year, and we'll do that not only in the U.S. but in key international markets to help set up Latin America and then the next tier of markets, potentially deeper value markets in APAC. So I think Ben nailed it. But those are a couple of other color points that I had.

And your next question comes from Lloyd Walmsley with Deutsche Bank.

Two 2 questions. First, just can you talk about how the improvements you've made in ad tools like automated bidding have impacted same advertising spend -- same advertiser spend? Are you seeing existing advertisers scale up budget on the back of this in ways that can kind of build as adoption increases?

And then second one, just kind of following up on Justin's question earlier. How do you guys think about bringing shopping activity more directly into Pinterest, similar to what we're seeing from some other players in the space? It seems like it could help with both attribution and the change in privacy landscape. So wondering if you thought about making more investment to really move it all on platform? Anything you could share there would be great.

I can start with your question on ad tools. And I don't know, Ben, if you would like to hit the second one. First of all, we -- I guess, taking a step back, Lloyd, we saw growth being driven by new advertisers more prominently than existing advertisers this quarter, but there was a balance in growth from both. The biggest driver of that was our expansion internationally, where we were starting to see greenfield accounts come on board. So that's a natural thing to expect when we're opening up new markets.

The fact that we're generating additional growth through existing accounts, and that was part of the contribution to overall revenue suggests that we're beginning to see some of that new budget that you described. We're for sure, clearing existing budget better because by taking the manual control out of those campaigns and making them perform better, finding more efficient places for those ads and more efficient rates on CPAs that we've seen budgets clear more effectively, but we are seeing growth from existing accounts as well.

I don't know, Ben, if you wanted to add anything on the shopping comment?

Yes, Lloyd, I mean, I think maybe the question behind the question is: when is Pinterest planning to do things like native checkout, are you thinking about holding inventory or are you thinking about building a marketplace. And the answer to that is we certainly recognize that the friction introduced by not being able to easily check out -- if you solve that, there's a big win there. But we don't have any products yet ready to announce on that front. We still are seeing a lot of return and a lot of work, candidly, ahead of us around the couple of themes that I mentioned before.

One is increasing inventory by increasing the number of catalogs through partnerships such as the one that we have with Shopify and intelligently matching that inventory to inspiring scenes and making it really easy for Pinners to make that switch, and sort of walking that line between making sure that Pinterest feels inspiring, but when you are ready to buy, when you're excited about that scene or you're excited about that outfit, it's really easy to switch over and find where to buy it from a trustworthy retailer at the price that makes sense to you.

So -- definitely hear the spirit of the question. We're focused on those 2 priorities right now, and we'll let the community know when we're ready to announce something, but nothing yet today.

And your next question comes from Richard Greenfield with LightShed Partners.

We have seen -- we're seeing basically every platform out there really interested in courting creators. And I guess for investors, given how you started out the call and Ben was sort of talking about creators, how should we understand like why a creator comes to Pinterest versus an Instagram, a Snapchat or a TikTok? Like, what makes Pinterest unique from a creator's perspective? And maybe Ben or if someone could just talk about the road map for helping those creators make money on Pinterest? That would be great.

Yes. It's a great question. And I think that the question of what's in it for a creator. I mean, it actually comes down to what's the heart of the difference between what people come to these platforms to do. So there are creators on platforms on lots of other platforms, social media properties, professional networks like LinkedIn, and creators really find ways to express themselves and are attracted to platforms that are aligned with what the users are there to do.

So what users are there to do on Pinterest is they're there to get inspiration to go do things in their life. And so we are starting to bring on creators who want to be known more for the ability to teach how to do something than just shining a spotlight on what they're doing day-to-day. So more on actionable content, educational content than pure entertainment content. I mean, there's a place for them both, but Pinterest is tipped more towards that first category.

And as a result of that, Story Pins, for example, on Pinterest, they don't disappear because if you're teaching somebody how to cook that great recipe or how to do that great workout, that could be as good today as it is in the future. And so from the creator's perspective, I mean, you got a few things. So one is, 450 million people around the world that are really excited about getting inspiration to go do something in real life. The second is you're in an environment where there's a strong search dynamic, much more similar to a video-centric place like YouTube than a more social-centric place where things tend to be more ephemeral.

And then over time, we absolutely do want to find ways to make sure that creators can be rewarded, and the best creators can often do what's in their future, which is maybe doing this full time. So we're experimenting with things like sponsored Story Pins, but we are looking at a range of different revenue models that are aligned with what the creator is there to do.

We launched our first example of a sponsored Story Pin. A great example to share is Diageo. Diageo ran a campaign where they took one of their brands, Tanqueray, and they paired up with one of our creators, Peter Som, who is a food and fashion creator. And they created gin drinks, so Pinners could learn how to make a cocktail at home, in Q4. And so that's an example of how those 2 things can be really aligned. Our belief is that the same alignment in incentives between what Pinners are there to do and what advertisers are there to do can offer new monetization opportunities between creators and advertisers as well.

So as I mentioned at the top of the call, we're still in early days. You're right, it is a noisy environment out there. People are reading about this all the time, but we do think that we have a lot to offer, and we're excited about the early progress we're seeing.

And Ben, do you think you can create some form of marketplace where you can pair brands with creators? Because I think that's a real challenge for brands figuring out like who to work with on a given platform. Obviously, you have a ton of data on what people are doing. How do you begin to match them up as a marketplace an obvious next step for Pinterest?

I think it's probably too early for us to kind of predict exactly what we're going to release. But in terms of what you spoke about, which is that matching problem, definitely understand that, that's a challenge. And if we can provide a positive, mutually beneficial relationship between creators, advertisers and Pinners, there's a lot of value to be gained there.

And your next question comes from Ross Sandler with Barclays.

Just a question, Todd, on the -- kind of the macro heading into 2021. So both Google and Facebook pointed to stable to accelerating growth in 1Q and 2Q. And I know you guys have, like, a comp step-down as we get into March and April. So is the context of the low 70s -- is that like what you're seeing thus far in January, and we're not factoring in anything in terms of March or April in terms of an uptick? Just any color you can provide on what you're seeing right now and then maybe contrast the brand versus DR side of the business, that would be great.

Thanks, Ross. This brand and DR, I'm just making a couple of notes and then the macro. So heading into Q1, look, we're excited about the momentum we have coming out of Q4. And if you take a step back, I think there are 3 themes that are persistent. One is that the strategy is working. Ben walked through a lot of what we're building from a technology perspective, but the goal of having an advertiser bring their budget, their goals and their content and having us automate the rest is something that we're early in the journey to deliver, but the progress we've made is resonating, especially in the mid-market.

The second big theme that will persist is the value of insights-led selling. Because of the early commercial intent of our user base and our ability to increasingly package those insights well in advance of seasonal moments and help advertisers design campaigns, it helps us deliver more relevant advertising and also better performance. That will persist.

And the third is brand safety. So we saw this a fair amount during an election season, but in general, the secular trend around brand safety being important to advertisers will persist. So those are 3 things that I'm really excited about coming out of the back half of last year that we expect to persist.

What's different about Q1, 2 things. One, we had a little bit easier compare, which will become more pronounced in the second quarter and then much tougher as we get into the back half of the year. Well, we benefited really strongly in the retail segment from that longer holiday season. And for a platform that has a lot of retail exposure and a lot of value delivered through that insights-based selling on seasonal moments in the fourth quarter with an unusually strong and longer shopping period, we just have fewer seasonal moments in the first quarter to sell again. So all those macro themes are there, but the number of seasonal moments and the particular strength we saw in the retail segment in a much longer than usual shopping period was probably a little [easy to] us.

On the brand, or awareness versus performance side, we continue to be majority performance objective spend. But what I would say is we saw a strength. For a platform that is full funnel, where we take a user from inspiration to action and we can map awareness objectives all the way through checkout objectives or shopping objectives, we saw strength across the board in the fourth quarter. It was everything from awareness objectives all the way through shopping, and oCPM performed exceptionally well. We are still predominantly performance-oriented, but we didn't see many big shifts in spend. In fact, it was just strong across the board and across all verticals.

And your next question comes from Mark Shmulik with Bernstein.

If we think back on 2020, obviously, the pandemic threw a wrench in everything. But one of the big goals, as I understand it, was driving incremental use cases for the users. And so if we look below, I guess, the monthly active user numbers, anything you can share about how successful that was? It certainly sounds like there was a lot of success bringing folks kind of across the funnel. But anything around those incremental use cases and other reasons to kind of use the Pinterest platform?

Yes, that's a great question, Mark. So we did see some success with use case diversification. Look, we also were benefited by the fact that a lot of people's lives changed pretty dramatically in 2020. And so a lot of these core use cases that Pinterest has been great at suddenly became that much more relevant for people at a time when they were working from home. Parents became teachers. People started cooking at home more. And so we saw a lot of benefits from that as well.

Now some of the use case work that we've done in the past, including things like search guides and diversifying the results that we show, and just improving the overall relevance -- those will continue as sort of evergreen investments. But the reason that we've framed this year to be more about overall providing inspiring content is we see a lot of long-term value in making sure that the format that people get inspiration in is the most inspiring format for the future.

And so there are 3 things that we've mentioned around that that are in that theme of more inspiring formats. One is video. And I think we've already covered that video grew tremendously last year, both in terms of views and the number of uploads. The second is making everything shoppable, and we talked at length about how we want to be able to people pivot from looking at that home office set-up to buying all the things in it. And then the third, which is the newest, is going to be this investment in Story Pins.

So I know that's a little bit of a long way of saying that use case expansion -- we did see success in it in 2020. But looking ahead to 2021, we're going to be speaking more about providing more inspirational content in native formats as a way to drive long-term growth and engagement on the platform.

I'll now turn the conference over to Ben Silbermann for closing remarks.

Well, look, I just want to thank everyone for joining the call and for the thoughtful questions. And as always, we look forward to keeping the dialogue going. And I just wanted to also say that I hope everyone stays healthy and safe in the months ahead. Enjoy the rest. Have a good day.

This concludes today's conference call. You may now disconnect.