3 Reasons You Should Care About the BzzAgent Acquisition

Last week Boston-based BzzAgent, a word-of-mouth marketer with extensive analytical capabilities, was acquired by dunnhumby, a direct-response marketer, also with extensive analytical capabilities, that in turn is also owned by U.K. retailing giant Tesco. (American readers should know that dunnhumby works extensively in the U.S. with Kroger.)

Bzz you should notice

I’ve worked directly with BzzAgent, and it’s always been a great experience. The starting point of their capabilities is a network of some 800,000 Bzz agents, consumers who receive product samples from manufacturers hoping to generate positive word-of-mouth. Just search on Twitter for #ImaBzzAgent, #BzzAgent or @BzzAgent to see the conversation they drive. As their CEO Dave Balter has pointed out to me in the past, BzzAgent is more than a network of “advocates,” they truly understand social media and analytics.

To oversimplify a bit, BzzAgent is great at driving consumers toward brands, and dunnhumby is great at closing the sale at a particular retailer – which is also known as shopper marketing. This is a powerful model for manufacturers and retailers alike.

3 reasons you should care about the BzzAgent acquisition

1. Shopper Marketing holds Social Media accountable. As Balter put it in an interview last week, social media “is still in the world of ‘likes’ and clicks, but substantial budgets just don’t come from that. Shopper marketing, on the other hand, is the ultimate measurement vehicle. It’s a thousand percent about ROI.” Yesterday someone posted on Ad Majorem that social media is just media, not necessarily an advertising vehicle, and they’re right if no one knows its effect on sales.

2. The path to purchase still ends at bricks and mortar. I’ve posted before that Social = Mobile. If you accept that premise, and observe that shoppers carry mobile devices into stores, we can also say Social = Retail. Apple and Google mobile platforms offer plenty of apps for looking up product information. Twitter is a secondary market for online coupon offers. At some point the cash register rings and its usually at a physical store.

3. There’s a trend forming. Not only did dunnhumby acquire BzzAgent but Walmart acquired Kosmix, which for lack of a better term we’ll call a “social commerce” platform. Read more about Kosmix here, here and here. And then there’s Groupon, which is also a blend of social media, shopper marketing and e-commerce. In short, retailers are figuring out how to harness the power of the Internet.

Perhaps now someone will figure out foursquare’s reason for being.

Are Social Media and SEM really "advertising"?

In an early post, you can read that “the ‘ad’ in Ad Majorem means all marketing communications, from social media to direct mail to Internet gaming to television commercials. To most consumer audiences all of these are advertising.”

Today we’re going to debate that statement a little.

Is Social Media advertising?

On The Social Graf blog, Erik Sass noted yesterday that in recent IPOs for LinkedIn and Zynga, advertising revenue was not a big factor. LinkedIn makes almost half of its money from headhunting and job-finding services; Zynga makes 80-90% of its revenue by selling virtual goods. Does this mean “advertising takes a back seat”?

The question is not whether Social Media is advertising or is putting it in the back seat. They have a symbiotic relationship; great advertising has always driven positive word-of-mouth. The only difference today is that social media has turbocharged word-of-mouth. Maurice Levy of Publicis tripped over this dynamic the other day when he said “Recommendation and endorsement from a friend is sometimes more powerful than the greatest ad.” No, not "sometimes" – always more powerful than the greatest ad.

Word-of-mouth is advertising – advertising we can only hope to influence, never control.

Is SEM advertising?

Meanwhile, over on AdAge’s DigitalNext column, Josh Shatkin-Margolis says we should “Stop Pretending That Search Engine Marketing is Advertising”. He actually made a great distinction in his second paragraph: “SEM is the worst form of advertising, but bear in mind that it is the best form of targeting.” True enough. No one will claim that unclicked search copy is effective. Cheap? Yes, as in “the impressions are free.” You get what you pay for.

Yet is there any reason a consumer would not call this advertising just because it neither promises nor delivers a memorable, persuasive message? I don’t think so. We’re splitting hairs with some of these discussions.

Another headline this week proclaimed that “Google Passes Yahoo in Online Display Advertising”. So are we going to say that Google’s online display is advertising, while the search copy just pixels away is not?

What is advertising? What isn’t?

A wise colleague, now retired, used to say, “Everybody’s selling something, boitshick.” This is true of both search and display. Social Media, too, although it’s a little different because we are counting on consumers to help us do the selling. To those consumers, however, it’s all advertising.

Stumbled Upon by StumbleUpon

This morning’s Ad Majorem site data included an extra couple of hundred visits, all reading a book review of The Shallows from last September. The source was StumbleUpon, a personalized aggregator of web content, or as Wikipedia clarifies, “a discovery engine (a form of web search engine) that finds and recommends web content to its users.” I’m now one of those users, and you can follow my stumbling via Twitter or on StumbleUpon itself.

So what did I stumble upon?

A trusted colleague, Michael Leis, describes StumbleUpon as a fantastic and small community, and that it was a fellow “stumbler” who convinced him to try Twitter some years ago. (Read Michael’s “5 things I’ve learned about Social Media, StumbleUpon Style”.)

Notice that I didn’t write “a fantastic but small community”. The magic of social media is not the size of one's network, but its relevance. I’ve selected a few topics of personal interest and am sure I’ll find relevant content from like-minded stumblers.

Automatic for the Tweeple

Several friends on Twitter also use StumbleUpon, so I tweeted them this morning for more insight. Open government advocate John Moore and Social Media strategist Victor Canada both called StumbleUpon “my favorite bookmarking site.”

I still haven’t figured out why a lot of people suddenly stumbled upon my 8-month old post, but I’m glad they did, because I got a new resource out of it.

The Changing Role of TV

50 years ago this week, FCC Chairman Newton Minow called TV a “vast wasteland”.

Today, we can argue if TV is a wasteland but there’s no question it’s a vast – and shifting – territory.

The Death of TV has been Greatly Exaggerated

It’s been fashionable in recent years to say that TV, and in particular the 30-second commercial, is dead. Yet people watch a lot of it, which means advertisers still pay for it and producers keep filling it up with content. Supposedly Digital was putting an end to this cycle but so far the billions of hours of video content available online look more like a wasteland than the five hundred channels of TV available to many households. (Attention, digerati, please keep reading before you flame me in the comments section.)

TV Renaissance

In fact the demand for TV content is stronger than ever because TV isn’t just an appliance in your living room anymore. You can watch TV content on any number of devices, and TV advertising in the form of things like pre-roll video and DOOH displays. Jerry Seinfeld, who just launched a new website, observed: "Why would I talk to a TV executive at this point, and ask them what they think? If I have this idea for a TV show, I can just put it up on the Internet." On top of all this, let’s not forget that traditional TV sets offer not only hundreds of channels but the ability to watch programs anytime via the use of DVRs.

Expansion of TV complicates planning, measurement

Regular readers know about the Gigantic Venn Diagram, which is the collection of all available marketing channels across Advertising, Retail and Digital. TV is almost a Gigantic Venn Diagram unto itself, which means it’s impossible to have a TV media plan considering only TV. The confounding thing is that viewership is also a Gigantic Venn Diagram because people are using more than one media at a given time. During the Super Bowl all my Twitter feeds were moving fast with commentary about the game and its commercials. (Mrs. Ad Majorem watches Dancing With The Stars on two screens at once.)

Supply and Demand

Part of the “TV is dead” narrative has been resentment over continually rising prices for TV advertising. In the U.S., two years of recession are now followed by double-digit price increases. We expect the same in Asia and Latin America. “How can this be,” people ask, “when viewership is down and marketers have so many other options?” Three reasons. One, viewership isn’t down – in fact it’s expanding. Two, TV still offers a familiar ratings system – advertisers understand what they’re buying. Three, many of the biggest marketers still depend heavily on high awareness and TV is actually the most cost-efficient way to reach large audiences.

TV is not King

TV is not king; more like a ceremonial monarch with a big bank account, a lot of influence, and an unclear future. While TV is strong culturally and economically, digital media continue to rise in relevance. Let’s not lose sight of the fact that digital ad rates are also up in double-digits. Social Media will force the development of interactive TV. Mobile threatens TV in another important way, taking away part of TV’s broadcast spectrum.

What should you do?

Keep experimenting. Stay abreast of the changes. Continue to take a true channel-neutral approach and use TV in a way that will achieve your own business goals. As we said in a previous post, “How TV fits into IMC”, TV should never be the default position, but neither should it be eschewed. Don’t let labels hold you back. If you shift TV dollars to pre-roll, you can plausibly say you’re “going digital” and that you’re looking at TV expansively.