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Wind-up or pitch?, continued

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Home page for the Central Hive. Learn all about BzzAgent’s vision of word-of-mouth marketing, and sign up to be a BzzAgent yourself — if you’re into that kind of thing.

Inside BzzAgent

Stung by criticism that his is a shady and deceptive business, Balter decided to document the company’s inner workings on a blog.

Word of Mouth Marketing Association

Official site for the trade group for this burgeoning and controversial industry.

National Institute on Media and the Family

Devoted to studying the effects of media and advertising on children and families.

Commercial Alert

Its mission: to "keep commercial culture within its proper sphere, and to prevent it from exploiting children and subverting the higher values of family, community, environmental integrity and democracy."

David Byrne’s Journal

The Talking Heads singer had serious misgivings about the "Philip K. Dick world" he thought word-of-mouth marketing represented, and he expressed them here.

Derek Archambault

He’s one of BzzAgent’s most effective foot soldiers — and he’s got a blog.

Archambault says he does it because he enjoys it. "Getting the points and some of the prizes is a nice bonus, but that’s not why I’m doing it." Indeed, even though BzzPoints can be cashed in for neat marketing schwag (Archambault has a Bare Knuckle Stout boxing-ring bell), books and CDs, and even cell phones and DVD players, only one half of one percent of BzzAgents have redeemed all their points — and barely 25 percent redeem them at all.

"I’m never gonna tell a friend of mine to buy something or do something that I don’t think they’ll like or enjoy," Archambault says. "There’s no harm coming from it."

Maybe not. But reading some BzzAgents’ reports, the ones that are read and processed by Bzz employees and are so central to its success, reveals some strange human interactions. One woman was working on a campaign for a coffeemaker, and decided to buy one for a coffee-loving co-worker who’d suddenly found herself in dire straits. "Tears welled up in her eyes," she writes in her BzzReport. "We were both crying and hugging each other. An older lady was standing next to us and said, ‘Wow, that must be some deal — what is it?’ So we explained our story and she put a coffeemaker in her cart as well." Another woman buzzed at her grandfather’s wake. Underscoring just how ubiquitous BzzAgents are becoming, one BzzAgent writes of unwittingly buzzing another BzzAgent.

But it says something about the chummy relationship BzzAgents have with the Central Hive that they are so unflinchingly honest in their reports. "My girlfriend and I went to a bar to have a few drinks, and I ended up being a ‘naughty girl,’ " writes one. "We were sitting at the bar sipping our drinks when a cutie came up beside me and asked, ‘What are you wearing? You smell delicious.’ I replied, ‘Cool, by Lauren.’ ... We ended up having a very late night together, in all ways. He told me the next morning he liked it enough to buy [it] for his WIFE!"


For Gary Ruskin, executive director and co-founder of Commercial Alert, a watchdog group dedicated to keeping "commercial culture within its proper sphere," word-of-mouth marketing represents an sinister intrusion of commerce on our daily lives. That’s why his group sent a letter to the Federal Trade Commission last month accusing word-of-mouth marketers of "perpetrating large-scale deception upon consumers by deploying buzz marketers who fail to disclose that they have been enlisted to promote products," and asking the commission to investigate the practice’s legality.

He’s probably going to be disappointed. "Basically, what it comes down to is whether things are legally deceptive under Section Five of the FTC Act," says an FTC spokesperson, adding that any investigation is months away from getting started. "It has to be more than just misleading. It has to harm consumers, and affect their decision to buy or purchase the product."

Balter welcomes the FTC’s scrutiny. "What they’ll find is that there’s a right way to do this stuff and the wrong way.... We have good policies, and we’re open to disclosure, we don’t want to fool people."

But Ruskin — whose qualms are not about BzzAgent specifically, but the practice in general — proffers a more qualitative argument. "Buzz marketing is intrusive. It’s like telemarketing literally in your face. And it involves the commercialization of human relationships. Encouraging people to treat their families and friends like pawns."

Another contentious issue in the word-of-mouth world is the use of minors. Kids buy stuff and talk about stuff just as much as adults do. And they’re valuable marketers. BzzAgent has 20,660 agents between the ages of 13 and 17. But, Balter says, any BzzAgent under 17 who’s offered a campaign has his or her parents notified. "We say, ‘By all means we’ll pull them out if you want.’ ... We are not a kids marketing company. We are not a teen marketing company. Fifty percent of our agents are over 25. But everybody has a right to share their opinion."

In March, Representative Michael Festa introduced "An Act to Regulate Certain Employment Practices in Connection with Children’s Marketing Activities." It is currently in the Labor and Workforce Development committee, and should see a hearing by February.

Festa says he’s heard no horror stories about BzzAgent. Indeed, Balter worked with him to strengthen the legislation’s wording. But, he’s concerned about the practice. "This is a whole new world of marketing.... I’m not hearing that folks in Massachusetts are engaging in improper practices. What I’m hearing, and what my instincts as a former prosecutor tell me, is that the opportunity for exploitation in this dynamic is very real."

Blois Olson, a spokesman for the National Institute on Media and the Family, says BzzAgent doesn’t raise red flags the way that other, explicitly youth-oriented buzz marketers do. But he wishes Balter would use his influence for good, asking the Word-of-Mouth Marketing Association, which BzzAgent co-founded, "to instill parental notification and consent in their ethics code. They have not done that." Balter concedes this. But he insists that he does support institutionalizing parental notification, and says he’s confident that when the next draft of WOMMA’s code of ethics is finalized, it will be clearly stated.


Lately, Balter says he’s been turning down nearly 80 percent of the clients who approach him. Sometimes that’s because of the nature of their products. ("We don’t work in religion or politics right now. Or cigarettes. If any cigarette company wants us to work on their anti-smoking budget, we’d be glad to.") But mostly it’s because BzzAgent can’t handle the sheer demand.

The company is growing at a phenomenal clip. It recently launched a Spanish initiative to tap into that giant and growing demographic. And it’s a safe bet that more and more companies will be adding word-of-mouth as a line item on their marketing budgets. It’s just the beginning. Because, Balter argues, rather than some dystopic infiltration of big business into our lives and relationships, buzz marketing represents the empowerment of regular folks. It means that companies will no longer market at us, but with us.

So the next time a friend or family member sings the praises of a "terrific" new book or talks up a "delicious" new food, you might want to take it with a grain of salt. You may be getting buzzed.

Mike Miliard can be reached at mmiliard[a]phx.com.

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Issue Date: November 11 - 17, 2005
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