Every day I see my friends “pin” their new favorite items from “Pinterest” to their Facebook profiles. These pins may feature a cookie recipe, a layered outfit, or even a type of chart. However, I did not notice how popular Pinterest was until Oprah “liked” my friend’s pin. Just as my attention has recently been called to Pinterest, the website has drawn the attention of the NAD who issued their first decision on “pins” in July, and new analytics companies have developed to help advertisers analyze the benefits of “pins.”

Pinterest is a social media website that began in early 2012, and is currently the third most popular website for consumers to get and share news, trailing behind only Facebook and Twitter. Pinterest allows users to pin images to their online “pinboard,” including images from other website. User can also post statement with each picture, the images can be viewed and “re-pinned” by other Pinterest users, and these images can be viewed on a user’s Facebook profile. This is a prime mechanism for advertising because the images from other websites can be hyperlinked to the images originating site, directing consumer traffic and allowing advertisers to gauge their appeal to consumers in a more effective way than print advertising.

In July, The NAD issued its first decision regarding advertising claims made on Pinterest by Nutrisystem Inc.  The pins in question appeared on a board entitled “Real Consumers. Real Success,” and featured the consumers’ names, their total weight loss, and a link to the Nutrisystem website. NAD’s decision emphasized that social platforms like Pinterest are no different than traditional forms of advertising – the same old rules still apply.  In this case, testimonials and mandatory disclosures (in accordance with the FTC Endorsement Guides) were the focus of the NAD decision.  NAD determined that the consumer weight loss results depicted in Nutrisystem’s  “pins” were testimonials, and, because these testimonials touted atypical results they require a clear and conspicuous disclosure noting the results consumers can typically expect to achieve in accordance with the FTC guidelines.

In response, Nutrisystem informed the NAD that the elimination of the disclosures was inadvertent adding that the company immediately added the required disclosures after receiving the NAD letter.  NAD’s decision expressed its appreciation for Nutrisystem’s quick response.

This ruling is fascinating because it recognizes Pinterest as an advertising platform even though Pinterest is quite strict about the way in which companies may use the platform for commercial purposes.  However, what I find most interesting is that Pinterest has successfully established itself as a cutting edge tool that advertisers can use to connect with consumers without providing any evidence that its use can impact sales.  Unlike Facebook and Twitter, which have analytics built into their sites for marketers to access, Pinterest does not offer analytics for companies to understand how “pins” translate into dollars.  Well – that too is about to change.  Three new startup companies: Pinerly, Pinfluencer, and Curalate, have been developed to fill this void. Pinfluencer, which was made available the same month as the NAD decision, boasts that it is an advanced Pinterest analytics website that tracks “pin” performance, determines which “pins” drive e-commerce, and detect which users are most engaged, among other things.

Over the upcoming holiday season, marketers are expected to use Pinterest to promote products for gift giving, and these analytics tools will be vital to their performance. However, with the recent NAD decision, companies must recognize that their pins are advertisements and they need to exercise caution when using the social media device. As for consumers, Pinterest seems to be here to stay!