CAN WORD OF MOUTH BE TURNED INTO A SALEABLE MEDIUM?

Agencies Can Buy Buzz as Nascent Arena Tries Out Its First Rate Card

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NEW YORK (AdAge.com) -- Could ordinary people’s buzz about products be bought and sold by agencies like so much time on TV or radio?
BzzAgent founder-CEO Dave Balter
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BzzAgent, a Boston-based firm, is betting it can, as it launches a word-of-mouth media channel through its network of 130,000 average consumers eager to chatter about a brand.

Two agency partners
So far BzzAgent has two agency partners, StarcomMediaVest Group’s Reverb division and Havas’ Arnold Worldwide, which will pay “slotting fees” based on the number of agents used and the length of time the campaign lasts. Arnold will use the channel for client Hershey Co., when it launches a new product-sampling campaign, believed to be a Take Five product, next month.

Turning WOM into a medium -- as opposed to just a marketing discipline or tactic -- could do wonders for its stature, allowing agencies to buy buzz alongside traditional media buys. There’s even a rate card forthcoming this week. BzzAgent will look to join up as many as six additional agencies as partners this year.

“One advantage of this is that word-of-mouth can live on a marketing plan or a media plan,” said Jamie Tedford, senior VP-media and marketing innovation at Arnold. “It’s important that it’s not just viewed as an afterthought. There’s already a shift as marketers are planning traditional and non-traditional media side-by-side.”

'Right direction'
“Even if it’s just a semantic issue, it’s a move in the right direction,“ said Peter Kim, senior analyst at Forrester Research. “If you call it a media channel, it’ll make a lot more sense to a lot of people. Like with online advertising, all this has to be integrated for it to work.”

Marketers and agencies have been giving word-of-mouth a close look over the past couple years as a way to supplement, or even replace, traditional media campaigns. BzzAgent’s network is used by a long list of major marketers from Anheuser-Busch to Volkswagen.

For BzzAgent, which recently raised almost $14 million in venture capital, the move from a promotions firm to a media channel means that it will focus on tending its agents and turn over creative considerations to the agencies it partners with. The idea is to run more campaigns, give agents a broader range of products and creative ideas to work with, and zero in on how to measure their effectiveness. It now runs about 35 campaigns concurrently.

BzzAgent campaigns work like this: Volunteer agents choose a campaign to work on and receive information about the product. After forming an opinion, the agents spread it to people they know and then produce a report on the activity. The reports are then analyzed for the client. Agents receive points in exchange for reports that they can redeem for rewards.

Lowered costs for agencies
None of that system will change, but BzzAgent’s surrendering of creative and strategic responsibilities should mean lower costs for participating agencies. “It’s priced in a way that could be a profit center for agencies,” said founder-CEO Dave Balter.

As it’s giving up most of its creative control, BzzAgent is also laying out guidelines for campaigns that forbid pyramid schemes and require that agents disclose the fact they’re working as agents. The issue of disclosure has been a major one for the word-of-mouth community as agencies and marketers worry about getting entangled in shill programs.

“There’s a high barrier of entry to the types of programs we do,” said Mr. Balter, who hopes the standards established will create a point of difference as competitors inevitably crop up. “Word of mouth is a medium and the marketplace is already there.”

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