Why retailer Tesco bought a social media company
24th May 2011, 10:00 am by Simon Phillips
Whilst some big retailers are still sitting on the sidelines considering whether social media has a role in their business, one of our biggest retailers has acquired its own social media company.
Yesterday it was announced that Tesco has bought US word-of-mouth social media company BzzAgent for a reported $60 million.
Bzzagent, a Boston based start up, uses volunteers to sample FMCG products and then encourages them to describe these products through Facebook, Twitter and YouTube. The company has 800,000 volunteers, working across brands like Unilever and L’Oreal, who spend their time describing their product experience online.
By purchasing BzzAgent, Tesco clearly want to better connect social media with product marketing. With access to some on the most comprehensive consumer data collected from their loyalty card holders, the extra content and data gathered from Bzzagent can only serve to enrich this further.
Tesco clearly recognise the significance of social media in influencing buyer behaviour. None of the other major retailers has gone this far in using social media – most seem to be focusing their efforts on communities that already hold great influence, like Mumsnet, NetMums and the hugely popular Money Saving Expert.
Tesco’s move to buy BzzAgent is another example of how social media is becoming a mainstream staple in the retailer marketing mix and the opportunity it represents can no longer be ignored.
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links for 2011-05-24 » Wha'Happened?:
[...] Why retailer Tesco bought a social media company | Social media agency London | FreshNetworks blog (tags: socialmedia acquisitions tesco) [...]
24 May 2011, 11:02 amMalcolm Sleath:
Is this another example of the far-sightedness that got Tesco so heavily and effectively into the loyalty card business? Clubcard + Social Media could be a very effective combination.
24 May 2011, 11:29 amWelcome Conversocial to the DFJ Esprit portfolio « « The Equity KickerThe Equity Kicker:
[...] Why retailer Tesco bought a social media company (freshnetworks.com) [...]
24 May 2011, 12:32 pmJo Stratmann:
Malcolm you are correct – Tesco’s wholly owned subsidiary Dunnhumby, the data company behind their loyalty scheme, acquired the company.
24 May 2011, 2:03 pmMark:
The ‘social media’ is really starting to be taken seriously. It’s still such early days and in a lot of cases yet to prove it worth.
29 May 2011, 10:55 amIf companies like Tesco are starting to get on board in a big way then its defiantly here to stay
Steve Schildwachter:
I think we can call this a trend.
Not only did Tesco acquire BzzAgent but Walmart in the USA acquired Kosmix. And then there is Groupon.
Here are 3 reasons why marketing and advertising people should care about this kind of mashup: http://admajoremblog.blogspot.com/2011/05/3-reasons-you-should-care-about.html
1 June 2011, 3:36 amTesco buy Bzzagent – the importance of social media in a marketing mix — Saucy Horse Social Media:
[...] social media as an essential marketing tool, this is a great story. From the excellent people at Fresh Networks there is news that the mighty Tesco are getting in… and they don’t waste money on [...]
9 June 2011, 8:31 amjames White:
This is because social media will be in a few years time the dominate source of marketing of companies, the ability to market goods under a social media site mean a wide audience and is much cheaper. i would say tesco has made a cleaver financial move
13 June 2011, 11:43 amm.xzy:
… because Social Media is one of the most powerful on marketing businesses…
19 June 2011, 4:28 amTesco’s Social Media Crisis « Investis blog:
[...] Superficially this story looks to be a familiar one – the failure of a large corporation to understand social media’s power to amplify a customer complaint. This would seem a surprising charge considering that Tesco themselves have a very active and effective Customer Care account on Twitter and indeed recently bought their own social media company. [...]
18 August 2011, 10:56 amSocial Media Cases Study: Tesco and Social Shopping Platform Foodie.fm - Sc Pulse Media:
[...] purchased social media company BzzAgent back in May last year,Tesco is certainly not shy about using social media as part of its wider [...]
16 January 2012, 12:23 am