January 23, 2015

Pinterest acquires recommendation data analysis firm Kosei

For many social networks, finding a way to monetize free services proves challenging. For Pinterest, devising a strategy was not so complicated. As a social platform designed to give its users photographic eye candy and aspirational lifestyle tips, building ads into its platform seems like a natural progression for acquisition strategy

This week, the platform announced that it will acquire Kosei, which Ad Age describes as a data firm specializing in targeted ads based on preference modeling. Pinterest is a site where users engage by indicating their aesthetic preferences, so it's clear how Kosei will fit into the company's overall strategy. Recently, Pinterest launched a "promoted pins" feature, which offers sponsored content to users alongside the images they select and stumble upon organically. With a usership that skews heavily female, Pinterest may make headway advertising clothing, housewares and other lifestyle goods.  

Unlike Twitter and Facebook, Pinterest has carved its niche by emphasizing images over words. And unlike Instagram, those images aren't derived from a user's personal experience, but from browsing the site's "pins" to select pictures that align with that user's taste. Where ads on other sites can seem cumbersome and irrelevant, brands have eyed Pinterest for its promotional potential. By bringing images of its products or services to the right customers, a company can find its target audience on a site where many users are already window shopping online. 

The problem that experts at Kosei may solve is when ads become too clunky or inconsistent with a user's self-defined experience of the social platform. Ideally, ad content appears as something the subscriber might have found on their own through the site's recommendation platform. Though current Pinterest sponsors include General Motors, Proctor and Gamble and Bank of America, smaller firms might find a window to advertise with Pinterest.