Scarfing Up Social: First Wal-Mart, Then Tesco


It's not exactly chocolate and peanut butter. Shopper marketing is usually as low-tech as can be, dominated by endcaps and shelf signs. But last month, Wal-Mart spent $300 million to buy social media firm Kosmix; this week. Dunnhumby -- owned by Wal-Mart rival Tesco -- snapped up Bzzagent, a Boston-based social marketing firm. Dave Balter, CEO and founder of Boston-based Bzzagent, tells Marketing Daily what's driving the trend.

Q: First Kosmix, now you. What's in for retailers?

A: We see social media and social marketing continuing to grow dramatically. Every marketer in the world wants to get involved. Yet the metrics aren't there. We're 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. The gold for everybody is going to be taking the power of social and tying it into what is going on in the store.



Q: Will it work? Some studies have suggested otherwise.

A: Yes. Historically, we've measured all our campaigns with third-party metrics, and use regression analysis to analyze the ROI, and our clients are some of the top marketers in the world -- Procter & Gamble, Johnson & Johnson, and Starbucks, for example. So our programs are shopper tested. Now we'll be able to tie that in to what is happening in the store. What's clear is that social media drives sales in stores in a way that will make marketers start to spend significantly more in their social media programs.

Q: Why acquire agencies?

A: Right now, there just isn't a way to connect shopper marketing and social marketing very effectively. That's where our value comes in -- I think these acquisitions are going to change the landscape, and that you'll see more in the coming year. Take Walmart and Kosmix. Walmart is a big brand and understands that it is the consumer driving purchase decisions -- and now they have this amazing unit to begin to add tools. I think retailers are saying, 'Social can't be overlooked. Let's not dabble in this, let's own it." We've got 800,000 BzzAgents. Dunnhumby has access to over 200 million shoppers worldwide. That's quite a scale.

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