We have written about BzzAgent before, speaking to how this company is finally getting Gen Y to listen. The company has created a community of over 800,000 “agents” who provide feedback and create buzz around new products and sites. Aside from helping big brands like Dunkin Donuts and National Geographic, in the last 6 months the company has released its agents on some well known startups — like About.me before it launched, the personal homepage platform that sold to AOL just 4 days after launching.
2010 was a big year for BzzAgent, a year in which they achieved double digit profit growth – their first year of profitability since taking institutional venture capital money. (They were actually profitable before they took VC.) “We grew every single metric,” founder and CEO Dave Balter told us. “Our focus in 2010 was on being a strong businesses. We restructured the company, and for new projects would say ‘if it doesn’t make us money or isn’t focused on our vision – don’t do it.’”
Part of this focus included honing their offerings to brands, working to displace the myth that social media isn’t measurable. Balter explained the two current gaps in social media being an incredible tool for brands: measurement and advocacy. “We are better at drilling into ROI [Return on Investment] on social media than anyone,” he said unwaveringly. “We also know behaviorally what makes you become an advocate for a brand. Someone might have a high Klout score and have lots of friends, but what BzzAgent looks at is: will they be willing to engage around the brand or campaign and what type of output results will it have?”
He went on to offer an example, diving into more detail about how BzzAgent’s model works. Brands come to BzzAgent with new products, looking for feedback and to identify the people most apt to become advocates and spread the word. “A brand will come to us and say, ‘I need 2,000 people to activate on a beauty campaign.’ We know the people in our community who like beauty, we know their influence profile, and most importantly we know they have been active across other beauty campaigns.”
What exactly is this ‘influence profile’ Balter speaks to? BzzAgent layers social information on top of agent profiles to go beyond a user’s reach (e.g., number of followers and friends) to understand what this person is actually talking about online. “People focus on fan count, but does that reach drive return is the real question,” Balter said. “We talk to companies spending millions of dollars on social media and help them place a return on that spend with measurable formulas. If we don’t do that, social is going to go away.”
Ultimately, brands want to spend money on campaigns that will reach these people, and BzzAgent and their algorithms are turning this into more of a science.
After a brand approaches BzzAgent, the company turns to its community of agents (knowing each agent’s demographics, social profile, interests and behavior around other brands and campaigns) and ships the new product to them. No money exchanges hands between BzzAgent or the brand and the advocate, so feedback is honest, unbiased, and real. Why are agents so interested, then? They get sneak peaks into brand new products and are part of a thriving BzzAgent community with game mechanics to incentivize engagement.
Balter told us that BzzAgent currently offers three products. One of these caters to new startups looking to get their product in front of the masses, versus a tech-savvy early adopter (Balter is known for housing other startups in the BzzAgent office space – see RaceMenu and several others):
— Campaign: A high premium product for large brands in the $300k range where BzzAgent distributes a product to 10,000 agents. Brands like Cover Girl, Jim Beam, and many others fall into this camp.
— Social Activation: This offering is more for new product launches, where BzzAgent looks to identify said product’s best advocates. They take a subset of BzzAgents (say 1000) and each month optimize for the best advocates, keeping those who are really active in spreading the word about the new product (say the top 300 of the 1000) and replacing the remaining subset with new agents (in this case 700).
— Digital Exposure: This lower cost product leverages BzzAgent’s media assets, such as a dedicated email blast to the BzzAgent community. Startups like RelayRides and About.me have leveraged this to on-board a nice base of users. (Yes, BzzAgent sent a hefty subset of the “early majority” to setup About.me pages before it launched publicly, providing them a nice base of users that undoubtedly helped make the AOL deal happen so quickly.)
Earlier this week Boston-based Communispace was acquired, another company focused on delivering brand insights through a vibrant community. Will BzzAgent be next?
