MBA 563: Product & Brand Management

RAVIKANTH N VANGALA





APRIL 13, 2010


Case Analysis 7:
Blogging at BzzAgent






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Objectives
BzzAgent, a company started in 2003, provides word of mouth marketing services in the form of a
network for the marketing of products and the advancement of brand awareness. Like most corporate
companies, BzzAgent started its blog-site called the BeeLog to create more transparency about its
company policies and practices to all its stakeholders. It was an attempt to publicize its internal work-
culture and the environment. The blog although started in 2003, was temporarily closed for a period of
eight months due to very low participation from its employees, agents and customers. But, later when a
survey was conducted on whether or not the blog should be re-activated, there was an overwhelming
majority of people in support of the blog. Although, it seemed to be a popular choice, there was very less
or limited activity. Hence, the main issue concerning the CEO that was to be addressed case was
Whether the BeeLog be discontinued again because of its low activity rate and if it has to continued what
are the measures to be taken so that there is an interest generated amongst the employees, agents and
customers to participate.
Analysis of Environment
Internal Environment
In 2001, BzzAgent founder and CEO Dave Balter had a vision to create a technology-enabled community
that would allow people to experience new products and services, share their honest opinions about them
with people they knew, and report on those activities and opinions so marketers could directly see the
resultsgood, bad or neutral. This community would be something entirely new, bringing consumers and
marketers together to report and analyze honest, candid and naturally-occurring word of mouth (online
and offline). The company started its first Word-of-Mouth (WoM) campaign for the Penguin Publishing
book called The Frog King in 2002 with a small network of 400 agents. 2006 turned out to be an exciting
year for BzzAgent. For the innovative and creative WoM marketing strategy, it received $13.8 million in


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venture funding and a brand-new board of directors, and planned on doubling its staff from 47 to 80 in the
next two years. By March 2008, BzzAgent had about 400,000 participants in its community (primarily
focused in the Eastern and North Eastern regions of US), growing by 2,000- 4,000 per week and 75
employees, running over 500 programs for more than 250 customers (representing a sizable fraction of the
Fortune 500). Selecting the right agents was an important task for the management as the agents who had
a match between their preferences and the product were to be recruited for a particular campaign. As a
part of training program BzzKits were mailed to agents. The kit included a BzzGuide that described
the product and a product sample if any. The guide also offered suggestions for WoM marketing activities.
In the case of most of the corporate companies, blogs are a fact of life and are used for internal
communication and/or as marketing tools. But according to BzzAgents CEO - Mr. Balter, BeeLog - the
firms first foray into corporate blogging, would serve differently as a medium for real people to talk,
exchange ideas and opinions. Since, Balter valued transparency and collaboration highly, he felt, BeeLog
could be used as a test ground to learn more about himself and his company from his employees, agents,
customers and others. The blog was available for all to see including employees, customers, investors,
anyone who cared to log on.
As his focus primarily was more on transparency, Balter was excited about the fact that BeeLog would
provide the world a chance to see what his employees, agents and others felt about the current practices
and products at BzzAgent. But, his employees had diverse range of views on his blog. While a few agreed
with Balters views, some had moderate thoughts (as they felt there was something in it for the
stakeholders to learn and influence others) and others were critical about it (as they perceived it to be more
distracting and risky than anything else). The recent blog entries received very low response and Balter
observed that only the early agents and employees were the ones who were the frequent readers and
posters and most of the new agents and employees found the blog to be a waste of time.



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External Environment
BzzAgent is a company which pioneered in WoM marketing services one of the most potent
weapons in a marketers arsenal. The mantra of BzzAgent has always been to harness the power of
WoM in a disciplined and strategic way. The number of firms offering WoM marketing services has been
continuously increasing as there has been a rapid growth in the synergies of interactive web-tools and also
the Return of Investments definitely projects positive trends. Also, many major brands started
experimenting with the WoM marketing strategy, using their internal customer databases to identify loyal
customers who would engage in WoM marketing activities for their favorite brands. In return, the
companies in most cases provide them with free samples of new products or coupons thus attracting
more and more customer marketing agents. But, despite this rapid growth of competitors, BzzAgent does
not face tough competition as the more difficult part is the sales process for the entire industry. And
although, these major brands are potential competitors on one hand, they also provide a business
opportunity for BzzAgent as it can help such major brands to create a platform and design a process for
their WoM marketing techniques.
One important threat is the question of credibility of the WoM marketing agents. The higher the company
maintains transparency regarding its policies, mission and vision statements, the better it serves with
respect to its credibility among the customers. The Word of Mouth Marketing Association, (WOMMA)
was hence formed in 2004 to create a code of ethics for the consumers working for the marketers and also
to lead an awareness increase program for the WoM marketing strategy.
The target clients for BzzAgent are mainly consumer products and services companies which definitely
benefit from the WoM marketing strategy. 75% of the firms clients hire it to create WoM for new
product and services. According to Joe Chernov, the firms Communications Director, the BzzAgent
marketing model also stands good for the existing brands and products. In addition to companies that hire


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BzzAgent for creating WoM for a product, the firms clients also include companies that have begun to
make use of their own internal customer base to identify those loyal customers who are willing to spread a
positive word about the company and its products. For such companies, BzzAgent acts as a consultant for
getting all their processes and working in line for the WoM marketing technique.

Analysis of Objectives: Whether to or not to Blog?
I believe that BzzAgent needs to keep its blog BeeLog alive as social networks provide one of
the best ways to promote customer-centric thinking within a company.
Blogs have always been popular ever since the development of the internet occurred but their
ability to spread information has been limited until the early 21
st
century. The use of social networking
sites such as MySpace, Typepad, FaceBook, Twitter etc has been tremendously increasing and it now only
takes a few clicks until you can create your own posting which can catch like a wild-fire and be passed
over a large network of people in a very short time frame. Hence, I strongly feel, BzzAgent would
definitely benefit from being a part of the current trend. Also, despite the additional time and resources
this may require, it can actually provide some extremely valuable information that cannot be obtained
through traditional methods. BzzAgent should use its blog for marketing in a strategic way focusing on
ways it can improve its systems and offerings. So, instead of canceling the blog site altogether, BzzAgent
should look into ways in which it can better take that information and make sense of it.
Firstly, I think BzzAgent needs to determine what exactly the purpose is of its blog-site. It looks
like Balter himself isn't entirely sure what he wants to get out of it. Initially, it was stated that he wanted
transparency in the operations of the company but later he states that it need not include everything about
the company and wants to protect/hide certain aspects of the firm's culture. Hence, a blog might not be the
right kind of medium for such thoughts. And secondly, if it is simply using it to run "90 Days" or 10



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Days kind of blogs to provide information about the working practices and culture of the company, then I
firmly believe it would be a waste of time. Because we can clearly observe that, in such blogs, the
information provided is highly repetitive and usually kind of biased or uninteresting for the consumer.
Hence, in order to foster Balters novel idea of using BeeLog to project BzzAgent as a truly
transparent company for developing closer relationships with his employees, agents, customers, and even
potential investors, the blogs need to address things that are important to the company which weigh
heavily on the consumer. If properly utilized it could definitely provide direct benefits to both his business
and his employees/stakeholders. The only important criterion in order to satisfy this level of
communication is valuable time and resources that can keep the lines of communication open. It is a
known fact that consumers are generally very happy to provide feedback when they know someone is
listening. And as observed, the general public already seems to appreciate the inside look into the
company. So, the idea of blogging BzzAgent as a transparent company is certain to generate a free flow of
ideas and opinions from employees, agents, clients and others.
And finally, I wouldn't be so worried about the perceived threat of exposing company operations
or opening BzzAgent to criticism on the BeeLog either. This is a company that seems to have more or less
pioneered WoM marketing. Hence, a small proportion of criticism from its internal or external resources
would not have any great affect on the companys brand image.