Many established companies have been caught out by the advent of digital media. But one that seems determined to stay ahead of the game is retailer Tesco. Perhaps that’s no surprise when you consider how quick Tesco was to grasp the value of customer expenditure data in developing its core business. 

Digital customers advocate products 

Over the years, examples of Tesco’s activity in the digital space are its online-based home delivery business and its expansion into mobile telephony. More recently, it has been even more adventurous. A couple of weeks ago, it acquired BlinkBox, a company that gives it an entry point into the digital download market (squaring up against Amazon/LoveFilm). Now, it has gone back into the market and acquired BzzAgent, a US digital agency which specialises in word-of-mouth messaging via digital media (ie, it has a pool of 800,000 digital consumers who advocate products and services on its behalf in return for rewards and incentives). 

Fusing of data capture and word-of-mouth 

The fact that Tesco has spent U$60m on BzzAgent demonstrates how serious it is about the acquisition. So what is it all about? 

Well, the first point to note is that the deal was actually done by Tesco-owned database analytics firm Dunnhumby. This is significant, because Dunnhumby is the company that set up Tesco’s highly-successful Clubcard loyalty scheme. So the message seems to be that there is an opportunity to fuse data capture and word of mouth marketing in a way that will drive unsuspecting consumers in the direction of relevant brands and services. 

Customer attitudes 

Commenting on the deal, BzzAgent CEO and founder Dave Balter said: “Dunnhumby has built a stellar reputation in the retail and CPG space by focusing on customer attitudes and behaviours. BzzAgent shares that focus and we are excited to leverage Dunnhumby’s unmatched targeting and analytic capabilities to provide our programmes with greater scale and proof of impact. Together we think we have a huge opportunity to connect the dots between shopper marketing and social media.” 

From customer loyalty to advocacy 

As for Dunnhumby’s POV, CEO Simon Hay added: “The customer today is as influential as marketing gurus were a decade ago. Customers’ choices are influenced in many places and social media and word-of-mouth are playing a key role for brands and retailers. Not only does BzzAgent leverage a base of 800,000 influential customers in the word-of-mouth space, it is focused on measuring return on investment and the role of social media. Our focus has always been on building loyalty. With BzzAgent, we believe we can now help our clients understand advocacy and use this knowledge to earn more loyal customers for retailers and brands.”  

PR firms can purchase access to community 

At first sight, this isn’t an orthodox PR story. But it pays to consider this comment from Dave Balter, made five years ago when BzzAgent had around 130,000 people on its books: “The BzzAgent media channel enables advertising, marketing and public relations firms to purchase access to BzzAgent’s growing community of more than 130,000 consumer volunteers just as they would buy time on a broadcast network or space in a publication." 

PR army to manufacture word of mouth 

In other words, BzzAgent is creating a kind of peer-to-peer PR army that can be used to create a buzz around products. Clearly, manufactured word of mouth won’t be able to make bad products good (and might even be counter-productive if used incorrectly). But as the number of agents operating within the BzzAgent eco-system expands, then PR agencies will need to explore how they can use this kind of advocacy to enhance a brand’s reputation.