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Psychographic Marketing: The Power and Controversy

Psychographic Marketing Concept of marketing the the right person among the crowd

Psychographic marketing is a powerful tool advertisers wield to reach customers. Since it gleans detailed data to target an ideal audience, it can be very effective for some types of advertising. It also raises questions about privacy, politics, and more.

Understanding Psychographics: Definitions and Use Cases

Marketing is effective when it reaches a specific audience. For example, the person who purchases a Lamborghini has different tastes and lifestyle than the person buying a Ford truck. Lamborghini commercials likely wouldn’t resonate with the Ford crowd and vice versa.

Demographics (age, ethnicity, etc.) and geographics (where someone lives) have long been used to help advertisers target their advertising.

However, their sophistication increased in the 1960s. Social scientist Daniel Yankelovich introduced the idea that segmenting groups by their tastes and preferences would be far more effective than using only demographics. This is psychographic marketing.

Although Yankelovich introduced psychographics in the Harvard Business Review in 1964, psychographics truly took off in the internet era.

In his conversation with RSnake, digital marketing expert Marty Weintraub explained how he used Facebook in its early days. He said, “It was unbelievable because you could target people more for who they were.”

At the time, one of Weintraub’s clients was a music recording school. He decided to try the then-novel Facebook platform to advertise it.

“I started targeting high school seniors who wanted to be rock stars and played guitar and were in affluent zip codes, where a mom and dad might shell out the costs for a two-year degree,” he said. “And it went bananas right away because it didn't cost very much.”

According to Weintraub, advertisers today are more restricted in terms of what they can learn on Facebook. But, marketers continue to use psychographics.

The Efficacy of Psychographic Marketing: A Critical Analysis

Although using psychographic profiles in marketing is very popular, it is not the silver bullet some claim it to be.

Psychographic segmentation may save money, help businesses fine-tune their messaging and increase brand recognition, but it doesn’t always drive sales. In a 2006 Harvard Business Review article, Yankelovich and co-author David Meer pointed out that psychographics work best when companies use the information strategically. They cited a 2004 survey of top business executives from around the world that found although a majority of executives used psychographic segmentation, only 14% found it useful.

Yankelovich and Meer stated that to drive sales, the segments discovered through psychographics must be compared with buyer behavior. Companies can use this tool to increase revenue only when they understand which customer segments drive business growth.

This article was written before Facebook and digital marketing took off. Marketers are now able to access information only dreamed of in 2006. However, the wisdom of pairing psychographics with sound business strategy likely stands the test of time.

Unraveling Privacy Concerns: A Thought Experiment

Of course, the amount of information now readily available to advertisers and other savvy internet users raises serious questions about privacy. Many people shudder at the idea of marketers peering into their personal lives.

The amount of data readily available online is a risk. RSnake conducted a thought experiment by asking Weintraub to imagine a single company having access to all personal online data and choosing to make it public.

“It would take the aggregate of every important hack in the history of humankind and make it a little stick of dynamite compared to a nuclear explosion. It would be global. It would be bad,” said Weintraub.

Weintraub also explained that big tech companies such as Google and its parent company, Alphabet, already have enormous amounts of sensitive data. He said, “Make no mistake, these big platforms have everything they need to completely weaponize all of it. And we have to trust.”

Escaping the “data apocalypse” that Weintraub predicted could arise from an enormous information leak is not easy to do. When asked by RSnake how he would protect someone from such an event, Weintraub said, “I would never search for anything from a known account and without using a proxy, I would never create search history that could be traced back to me. I would never fund anything that was sensitive with a credit card.” He also explained he would disable his phone’s geolocation or get a dumb phone.

These types of changes aren’t realistic for most. But with increasing amounts of personal data being collected daily, more people may consider making them.

Thumbnail episode of the influencing the Elections with Marty Weintraub

Psychographics in Politics: Influencing Election Outcomes

Politicians and their parties spend heaps of money on advertising and are no strangers to psychographic marketing.

The use of psychographics in political advertising took center stage in 2018. Research firm Cambridge Analytica was found to have mined data from an estimated 87,000 users in 2014 that was used to build voter profiles.

“What Cambridge Analytica did was they just mashed up data that they didn't have legal access to, and they did micro targeting,” said Weintraub. “They did the same kind of marketing that we were all doing at the time – they just used it for nefarious purposes.”

Controversy swelled when The New York Times reported the firm also had ties to the Trump campaign and a Russian oil company. Other reporting suggested Cambridge Analytica influenced the Brexit referendum in Britain.

As a result, Mark Zuckerberg, CEO of Meta (a.k.a. Facebook), was summoned to testify before Congress on Facebook’s handling of user data.

Since then, Facebook and other social media platforms have increasingly been blamed for a polarized political climate and influencing election outcomes. Facebook updated its policies in 2019 and has continued to review them.

It would seem that the changes had some effect. Weintraub said, “Facebook is almost neutered for effectiveness for elections.”

What has yet to be proven is whether psychographic profiling in advertising actually changes voters’ minds.

Mitigating the Risks: Steps Toward Reducing Polarization

The increasingly polarized political climate is often blamed on social media. Since social media algorithms tailor news feeds to individual preferences, people are rarely exposed to views that contradict their own. As a result, their beliefs may become more entrenched.

However, the causes of polarization are complicated. Social media may play a part, but other factors also have an influence, including gerrymandering, biased polling and the current media landscape.

Some scientific evidence shows that it isn’t echo chambers that polarize people online but influencers. Scientists conducted experiments in which people with similar views were asked to discuss the issues. Researchers were surprised to learn that after these discussions, people actually became more moderate in their opinions.

The scientists determined this happened because everyone participating in the experiments had equal status. In true social media environments, influencers with higher status shape opinion.

Minimizing the role of influencers online likely isn’t possible, but making people aware of the effect influencers can have might help reduce their power.

An article from the Brookings Institution suggested that exposure to different viewpoints, whether in person or through media, helps people view those in outgroups more favorably.

Research has also found that people imagine others with opposing viewpoints to be more discriminatory and hateful than they are in reality. Making people aware of this issue could help minimize it.

Another study found that reading a fictional news story about cooperation between political leaders from opposing sides helped reduce polarization. Seeing more stories like this in the news could be beneficial.

Future Implications: Psychographics and the Upcoming Elections

Psychographics are an established marketing practice. Marketing teams on both sides of the aisle will likely use them in the 2024 elections.

For its part, Facebook intends to run political advertisements but has an involved approval process.

X (formerly Twitter) also has an approval process for political advertising with several guidelines. Foreign nationals may not post political advertisements, and content must not include “false or misleading information.” There are also rules regarding psychographics. Advertisers may use location, age, gender, interests and keywords, custom audiences, and follower look-alikes to find their audiences.

When asked how to safeguard election outcomes in future, Weintraub said regulating political advertising in the digital sphere would be critical. He explained, “Because television stations and newspapers are subject to more harsh rules, I would make digital platforms subject to the same responsibilities.”

The Takeaway

Psychographic segmentation is a marketing tool that is here to stay. Although it has some limitations, targeting specific market segments is a powerful way for companies to reach their customers.

The digital age has made gathering psychographic information more possible than ever before. However, there are privacy concerns. With more and more data online, people’s information becomes more vulnerable to exploitation.

The influence psychographics have on elections is still largely unknown. Whether new social media restrictions on political advertising will help turn down the intensity of the upcoming election is anyone’s guess.

Like any tool, psychographic marketing can be used responsibly or not. Ongoing conversations about its use are essential to protect people and their data.

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