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Tesco Buys W-o-M Specialist BzzAgent

May 23 2011

UK-based supermarket giant Tesco has acquired BzzAgent, a US-based social media marketing and analysis company, in a deal thought to be in the region of $60m. The new company will become part of Tesco's subsidiary dunnhumby.

The deal price includes an earn-out and BzzAgent's current CEO Dave Balter will continue with the company. He will report directly to dunnhumby CEO Simon Hay. BzzAgent's 60 full-time employees will be staying on as part of the acquisition, and the company will remain a separate entity. It will work with dunnhumby to expand its base of agents using dunnhumby's large database of household and consumer information.

BzzAgent specializes in word-of-mouth campaigns which it initiates by sending client products and/or coupons to a sample of BzzAgents, of whom there are currently 800,000. These agents are chosen for their demographic profile and they then conduct a campaign among their network on social media such as Facebook and Twitter. This can include distributing the campaign materials among friends. The BzzAgents report back on their individual campaigns and the results are analyzed and passed back to the clients. Clients for these services have included Unilever, L'Oreal and Michelin.

The company does not pay the agents and insists that that the agents declare their interest in the products to third parties.

dunnhumby, which runs the Tesco Clubcard scheme, also works with other retailers to create in-store marketing campaigns and loyalty shopper programs by analyzing data on household buying habits. Last year the founders stepped aside to facilitate the company's succession planning.

Blater said: 'We couldn't find a more exceptional partner in what we hope will be a huge opportunity'.

Web sites: www.tescoplc.com , www.dunnhumby.com and www.bzzagent.com .

All articles 2006-21 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.

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