Everything at the tips of your fingers. It has been the promise of the digital age, expanding the voice of the people - your voice - into virtually every facet of American life. But in this new, more people-powered world, can the market itself be democratized? And if so, can the democratization of the market turn a profit? David Balter certainly thinks so, and he's got the company to prove it.
An internationally recognized founder of the Boston-based word-of-mouth (WOM) marketing firm BzzAgent, Balter has taken it upon himself to harness the cultural mainstay of insisting to your friends that you know what's cool, and he's packaged it into an effective guerrilla advertising strategy.
Functioning under the understanding that 80% of consumers trust WOM more than any other kind of communication, Balter's BzzAgent has enlisted thousands of volunteer agents to simply try some free stuff out. The catch - if you like it, you have to tell your friends - is a small price to pay for free food, fragrances, and other fineries.
The Direction in a Directionless Youth
David Balter didn't know what to do with himself when he grew up. As a child, his future plans changed from day to day. "I went through all these random phases," he recalled. "I remember one time I wanted to be a chef, and my parents bought me this crepe machine. I practiced making crepes for family events." He also dabbled in hotel management, writing, and other areas. "As a kid I just wanted to do everything. I had a different passion every year."
"As a kid I just wanted to do everything. I had a different passion every year."
The whirlwind of goals somehow led him to a BA in psychology from Skidmore College, and in entering the work force, he decided that he'd make for a career in cellular phone technology. Realizing that the industry might not be for him due to an acute lack of knowledge of anything phone-related, he fell into an accounting job at an entertainment promotions firm, Retrofit. "Had I gotten an accounting job with a farming company, I probably would have become a farmer," he joked, confessing that his involvement in Retrofit brought him into the marketing industry.
But marketing appeared to be a comfortable fit for Balter - he soon bought and eventually sold the company that employed him, moving on to the online entertainment marketer, 360 Merch. A beneficiary of the nineties' online boom and a victim of its subsequent fall, 360 was a sinking ship when Balter unloaded it to a competitor. "I actually called up five competitors offering to sell, and four of them promptly hung up the phone on me, and the last one said 'really, I'm coming right over.' I really lucked out on that one." Able to escape from the doomed vessel, Balter also earned his marketing sea legs, completing the first part of his unlikely journey to become a marketing pioneer.
Something to Buzz About
The idea for BzzAgent came to Balter at work one day when he was about thirty, and a co-worker came to his desk raving about some great book he'd just read. "It occurred to me then," he said of his epiphany, "how much time people are willing to give to tell you about products that they like."
"'It occurred to me then,' he said of his epiphany, 'how much time people are willing to give to tell you about products that they like.'"
With the basic idea of trying to harness WOM such as he had experienced at work, the young entrepreneur approached five companies, attempting to sell his marketing idea. "They politely declined my offers," he admitted. Undeterred, he built the initial website platform and went back to the same companies that had previously rejected his offer, proposing them the same service again - but this time for free. Most of them said no. One of them said yes: Penguin Publishing Group.
Taking on the Penguin book The Frog King
, a novel about working in the book industry by then freshman author Adam Davies, Balter's infant BzzAgent had its first crack at creating a buzz around a product. The book's projected sales for the first year were met within two months of Balter's marketing experiment. Balter was surprised by the immediate success, and more importantly, so were the folks at Penguin.
But "maybe you guys got lucky," they told Balter. "Maybe it was just a good book. Do it again." Rising to the challenge, Balter was given The Art of Shen Ku
, a book that had flat-lined in sales. The ultimatum: if you can make it sell again, we'll start paying you. And sell it did. The previously bottoming-out book tripled in sales following Balter's bzz. Penguin is now a regular BzzAgent customer.
Spreading the Word (of Mouth)
BzzAgent's initial success with Penguin back in 2001 led to a foundation for the company to build upon. Currently harnessing the input of over 250,000 volunteer agents all over the country, and recently expanding into the United Kingdom, Balter's company has worked with over 150 companies, including Energizer, Sun Microsystems, Ralph Lauren, Tabasco and many more, on over 350 campaigns.
But sometimes the buzz isn't necessarily a good thing. While Balter insists that BzzAgent does create quite a stir about many products, assigning BzzAgents products is not a sure-fire way to make a product all the rage. "Sometimes the product doesn't meet expectations for the agents, and they don't activate. But that's just part of the natural equation of what we do. You can't make someone like a product."
The negative buzz can be just as useful to companies as the positive though, in that they learn about a product's shortcomings. "The client can learn where the products have issues, and why people aren't talking about it."
Past and Future
As the company has grown, Balter's role has changed. He's thinking about the future, and promoting his vision. He still does much of the daily grind, though. "I feel that I have to know the pulse of how [BzzAgent] works." He still reads reports, meets with clients and strategizes about new markets.
"It's time for companies to pay attention to what people want and what they want to do."
Often shocked about his company's success, he also sees a bit of inevitability in what BzzAgent is doing. "It's up to people now to define what companies do," he declared. "It's time for companies to pay attention to what people want and what they want to do."