Market Targeting Acquisitions Increase: How Much to Pay for Psychographics Expertise?

As the twin forces of budget pressure and demand for greater marketing accuracy increase, the acquisition of firms providing technological or data-oriented services grows apace. In the latest example,Meebo, a social media agency has acquired Mindset, a firm specializing in psychographics, the science of determining how values, emotions and other psychological factors drive customer purchase decisions. The costs of such outlays are offset by the greater potential for sell-through. Expect this trend to continue.

Kit Eaton has the story in Fast Company:


"Meebo, social media sharing experts, have just forked over an undisclosed sum to buy ad-targeting experts Mindset. These innovative guys eschew demographic profiling, and use psychographic targeting to understand consumers instead. But...what the heck is that?

Meebo's been doing its social platform, media sharing/messaging gig for six years now, and late in 2010 managed to pull together $25 million in funding to extend and expand its operations. As news sites are reporting, the company has made the first step in strategically spending this cash and has handed over an undisclosed number of millions to buy Mindset Media. The idea is to leverage Mindset's expertise to brush up Meebo's brand-advertiser powers--Meebo's been working on these for some time, and its ad-powered toolbars appear on several high-profile sites. Mindset is particularly focused on consumer packaged-goods marketing.

But what sets Mindset apart, and which may have been particularly interesting to Meebo, is how it profiles its consumer audience. Most online ad firms do this one way or another (Google most famously so with its vast and, to some, scary, archive of data on your search habits, site visit habits and email and chat habits) because it allows them to target particular ad campaigns at an audience that may be more appreciative of them than a random audience, which means they can sell their ads at a premium to advertiser partners.

Mindset ditches one of the usual tricks, demographic sensing (you know: "25-35, male, high income, American") and goes for psychographic profiling instead. Essentially it's a simplification of demographic bracketing, and tries to boil consumers down into groups based on simpler things like: Does a particular group of people visit similar websites? Technically psychographic variables are "Interests," "Activities," and "Opinions," and it's easy to see that social media gives ad companies rich access to this sort of data right from the get-go.

Meebo is almost certainly hoping that Mindset's expertise will improve the targeting of its ads, since its users' social habits are all exposed in a rich way for Meebo to work with, much more so than for a non-social company. The idea seems to be that demographics helps target ads based on services or specifications offered by systems, whereas psychographic profiling helps work out what brands people prefer--and this is where the "big brand dollars reside," according to Meebo COO Martin Green