Buddy Media Acquires Spinback, Plans to Measure Sales Impact of Social

Tracking the Role of Sharing on Consumer-Buying Behavior

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Facebook page management software startup Buddy Media has acquired Spinback, a company that provides clients with technology to measure the impact of social actions on commerce. In other words, Buddy Media will be able to tell a companies what all that sharing and "like"-ing means to their bottom line.

This first full company acquisition for Buddy Media brings in Spinback's proprietary technology and five employees. Buddy Media, which has raised $38.5 million and grown from 40 employees last year to 170 today, did not report the financial details of the deal.

Despite social media's recent increasing presence in online advertising, it continues to be a relatively new marketing tool for most companies, and little research has been done on the impact it has on commerce. This kind of technology will give marketers and advertisers a way to measure the success of their campaigns in terms other than how many "Likes" are on a Facebook page.

"Tens of millions of websites have added sharing buttons," Buddy Media CEO Michael Lazerow said. "Very few of them can tell you how many sales were driven by these buttons. We can answer the question 'what is the ROI of social media?' both on Facebook and off, and on Twitter and email."

While Spinback has mostly served retailers, Buddy Media plans to expand the offering to all of its clients -- including brands like Coke, Target and Samsung -- and measure social sharing and the resulting traffic, conversions and sales. Mr. Lazerow said that his company and Spinback were in talks for a partnership, but ultimately figured out that buying the technology made more sense.

Spinback has tracked social activity for more than 20 clients since October 2010 -- starting with the initial post all the way to a transaction at checkout -- and have calculated an average of $2.10 in revenue from each Facebook wall post, and a 10.9% conversion rate for Facebook shares that lead to purchases. "A lot of this data has been missing for quite some time and brands have been sharing in large part because they know they have to and because it drives traffic," said Spinback CEO Andrew Ferenci.

Mr. Ferenci said Spinback's social commerce technology can measure sales from Facebook, Twitter, the web and email; identify the kinds of consumers who influence the most number of sales and figure out which products are shared the most. "We found out for one client that a particular age group of women in Boston drove the most sales at a certain time of day," he said. In general, they've learned that women in their 40s share much more often and drive many more sales then men in their 20s -- an important piece of intel for all those marketers going after the holy grail of the internet: 18-35-year-old men.

Buddy Media is backed by big players in Silicon Valley, including Softbank Capital, Greysoft Partners, Zynga founder Mark Pincus and Facebook board member Peter Thiel. Spinback's team was founded by three friends from the University of Wisconsin: Andrew Ferenci, Corey Capasso and Dan Reich.

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