—–Original Message—–
From:  (client)
Sent: Tuesday, October 06, 2009 2:24 PM
To: Dave Balter
Subject: RE: The FTC and Your Word of Mouth Campaigns

Hey Dave

Hope everything is going well for you and the hive.

Picture from Magnetic Heart

I actually have a lot of issues with this ruling–not the least of which
is how it possibly could be executed and implemented fairly.  I think it
may be beneficial for WOM companies like yours but raises far too many
questions for the rest of the blogging world.

So if you guys really do have a line to the FTC, please convey the
concerns of the ‘advertisers’ of the world who do not want to be
policing bloggers to make sure that every statement they make about our
books is true (whatever that actually refers to, btw, since most reviews
are opinions).  Nor do we want to cease sending out review copies lest
they’re going to only large media companies whose business models the
FTC claims to understand–and thus aren’t bound by this ruling.

I know transparency is key to you and the agents–and this ruling makes
sense for those purposes.  Perhaps you’ve been involved in this
discussion for a while, but it sure seems as if it was drawn up very
hastily, without enough knowledge of how blogging (specifically around
books) actually works.

—–Original Message—–
From: Dave Balter
Sent: Tuesday, October 06, 2009 2:00 PM
To: (client)
Subject: The FTC and Your Word of Mouth Campaigns

Dear Rick,

As you may have heard, the FTC published its updated “Guides Concerning the Use of Endorsements and Testimonials in Advertising” yesterday.*

Some portions of the Guides relate to the word-of-mouth and social media marketing, and that’s why I am writing you.  The substance of the Guides is very good news for marketers and agencies who adhere to responsible ethical policies, such as BzzAgent’s industry-first Code of Conduct – and we welcome the FTC’s clarifications of their approach to the market.

The FTC is clearly demanding greater transparency on blogs and throughout social networks, and “transparency” has been the BzzAgent battle-cry for the past five years.  We were the first company to require full disclosure, we were the first company to monitor for disclosure, and we were the first company to enforce this policy in the social media / word-of-mouth world.

I personally co-founded the Word of Mouth Marketing Association in 2004 to help set the right path for authentic and transparent dialogues, and to clarify issues such as this – I remain an observer on the Board, and Joe Chernov, our head of Communications, chairs the Association’s member ethics panel.  We are front-and-center on this issue (in fact we volunteered input to the FTC to help educate the commission about best practices in the industry), and we are here to answer your questions and continue to provide you with services that anticipate and comply with the government’s response.

If you have any questions whatsoever about the FTC’s announcement, I’d be happy to discuss directly.  Please don’t hesitate to reach out.

Thanks -

Dave

*You can view the 81-page document here

————-
Dave Balter
CEO
BzzAgent
+1-617-451-2280
Bzz Like You Read About: http://www.bzzscapes.com

Just how quickly is the world of social media changing?

When we shut down the Beelog in November 2008, we had 3 ’sharing’ buttons for each post:  Delicious, Digg and Stumble Upon.  To us, at the time, these were the most likely places people would want to re-distribute information.  Just 10 months later, and these seem embarrassingly out of date.

Now any blog worth its salt includes free toolsets to share posts across hundreds of sites – think AddThis, ShareThis and Shareaholic.

But more than that, conspicuously absent are Facebook and Twitter, the two 800-lb gorillas of social dialogue (I mean, why even bother linking to them?).  Less than a year ago, we didn’t even think it relevant to have either (let alone both) on our site, and today, these define the spread of information and connection of consumers online.

Right now, it’s a new game out there entirely.  We’re certainly going to update the blog with the right tools – and bigger than that, we’re helping our 600,000 BzzAgents get as socially connected as possible.

But it begs the question: fast forward another 10 months – what would be missing then?

[Editor's Note: I can't tell if this is written to maximize SEO (especially the last paragraph) or is really just a nice note...but the concept of looking at the world through the lens of "what's the SEO value" is certainly a reality business faces today...]

Hi there, Kristen here.  I am Dave’s biggest blog fan.  Why?  Because I’m BzzAgent’s Search Engine Optimization specialist and I know that Dave’s blog is interesting, expert, honest, funny, and a repeat performer.  Basically, an SEO dream come true.  I’ve been begging him to reactivate his blog for 9 months now.  I tried persuading him, bribing him, threatening him (nicely).  I even entered a bet with him and lost (I was soooooo close, even he got worried).  Luckily he’s a good sport and so am I for putting up with him.

In this blog, Dave will provide great stuff about the ins and outs of word of mouth marketing so stay tuned and come back often.  [Editor's Note: in reality, I'll talk some about WOM, sure, but this is really a blog about business transparency and evolution.] In the mean time I want to make sure you know about all the great things we do here at BzzAgent.

Our historical competency is word of mouth marketing. Learn how word of mouth differs between buzz and viral marketing and how BzzAgent activates conversations.  And check out our word of mouth campaigns up close and personal—they’re effective and FUN!  Next are our online products… Frogpond is our collection of the most interesting websites. See what our Agents have to say about them.  Lastly, BzzScapes are brand communities where you can discover and share content about your favorite brands.

That’s us in a nutshell.  Enjoy the BzzAgent blog, the expert voice in Word of Mouth.

Sure, yeah, it’s wonderful to see the huge 2 page spread in today’s NY Times Style section, calling out the wonderful feedback received from Agents.

What’s really worth considering, though, is the convergence of social media and traditional media. Rather than looking at each as distinct buckets, the master marketers at Cover Girl are replacing tag lines and eye-popping visuals with real Word of Mouth narratives to tell their story. This is more than just product testimonials in print – this is tapping peer to peer recommendations to power the reach of a print advertisement.

I wonder if there’s a new formula brewing…Celebrity + Real People + Traditional Reach = ?

Sometimes, it’s the little things that set the tone for how an organization works.

For the past 4 years, we’ve updated our org chart for the staff and the Board as a vertically focused organization.  Each individual was given their own box (4 straight lines at 90 degree angles) with reporting structures clear based on hierarchy and color schemes.

BzzAgent Org Chart Aug 2009

While technically correct, logical and clear, this org chart sets a tone of inequality, a lack of collaboration between groups and, in some ways, psychologically reduces people’s ability to feel free to innovate and create.   We set out to re-visualize our organization to recognize that, while we each have our focuses, each individual is part of the whole.

Here’s the result…circles instead of squares, overlapping teams and a reduction of as much ‘hierarchical’ explanation as possible.  The intent is this sets the tone that all of us are in this together – great ideas can come from any corner of the organization and “what team you’re on” is less important than creating solutions that help the company.

I’ve seen more cross-company collaboration in the last month than I’ve seen in the last 2 years.  Org charts don’t do that alone, but they certainly set the tone.

Today, Seth Godin launched his new venture, Brands in Public.   Over the years, we’ve been privileged to work alongside Seth on a number of ventures, and this one aims to be no less inspiring.

This case, though, is a little different.  Instead of one of us being a vendor and the other the client, we’ve pooled our resources to create a best-of-breed solution for marketers.  Seth created the idea and has executed on it, and BzzAgent is providing content (from our BzzScapes platform) as well as the expertise of our sales organization to help clients use the service.

This is quite unlike any other business development relationship we’ve ever struck.  What’s most interesting is that this wasn’t exactly how we envisioned using the BzzScape platform and our sales team has never been an outsourced resource for another company.  But that’s exactly what makes this work for us – for too long we’ve been consistent with, “this is how we do things” as opposed to, “hey, let’s see how it evolves the business.”

Already, this partnership has created a number of different avenues of discussion at BzzAgent, opening doors for new explorations and ideas about how our model can evolve.  While we’re excited about this partnership, I’m most excited that we’re back to the jump-off-the-cliff startup attitude and thinking that will create the next evolution of our success.

…in 5, 4, 3, 2, 1…and, we’re back…

2009 is going to be the first year in BzzAgent’s 8 year history that we haven’t grown as a business (Even in the recession or 2008, we saw growth of 35%).  Lots of introspection and evolution going on – and even though market conditions are a good ‘excuse’, we know there’s more to it than that.

We recently had an external consultant come in to do an evaluation of the business (through research and discussion marketers and clients).  The 56th page says it all…

Much more to come…

Ok, so I think the last post was the second to last.  This is definitely the last one. Really.  But this has to be said.

As one employee put it,

Today was not a good day in the Hive.

Due to economic conditions, we decided to do a proactive staff reduction.  Even with Q3 being the 4th best quarter in company history, October delivering more bookings than any other month this year, and our cash position extremely strong, we remain fearful of what 2009 holds in store.   So, we did a reorganization that resulted in laying off some staff.  Some of my very favorite, insanely talented, dedicated people.

As a CEO, this is perhaps the hardest thing you’ll ever have to do.  Traveling too much, dealing with demanding clients, working long hours – that’s all nothing compared to having to change the fate of people who have put their faith in you.

But this is the job.  I have an obligation to shareholders and investors; I have to develop the company so that it can weather the bad cycles as well as the good; and I have to reshape the vision to match what the market demands.

We did everything we could for those employees who found themselves no longer an employee at BzzAgent.  We left on email for the day, set up COBRA (and covered health care through Nov 30), allowed for equipment purchase, provided outplacement counsel on site – and tried to be as clear, compassionate and thoughtful as possible in our last one-on-one meetings.

Yes, there were tears (from both sides of the equation) and yes it was perhaps the most uncomfortable day we’ve ever had as a group.  And so all of the gains – the employees who now have an opportunity to step up into new roles, the ability to add talent for some of our adapted vision, the ‘leanness’ of the business to grow much more effectively – come with the bittersweet knowledge that for some people, tonight is full of anger, fear, anxiety and sorrow.

What now?  Well, without being overly sentimental, I suppose a wonderful way to send out the BeeLog in style would be to have anyone and everyone – staff, (separated and retained), clients, agents, friends, investors, whomever – add their thoughts on the situation.

One last jog around the track of transparency.  That would somehow make today just a tiny, tiny bit better.

It seems to me that after the press in Harvard Business Review about the BeeLog and Transparency, there isn’t much more to say.

It’s just time to move on to new organizational behavior initiatives.   Thanks for being a part of this experiment. (And remember to check out 90 Days of BzzAgent & The Bento Box)

More to come…but not here…we promise…

Dave