Dunnhumby’s Simon Hay on buying BzzAgent

Research: What made you want to invest in the area of social media?
Simon Hay: We see consumers being influenced more by other consumers, and more information being generated and passed around through Facebook, Twitter, Foursquare and those sorts of things. These are places where consumers are spending time. If they’re spending time, they’re spending money, and if they’re spending money, there’s transactional data, and that’s the ultimate interest for us. We want to create transactions and we see social media playing an increasing role in doing so.

Is the BzzAgent acquisition about marketing capability or data analysis capability?
In a way it’s both. BzzAgent has a business model that is about promotion – giving consumers the opportunity to try products and to talk about products, make recommendations to their friends and create buzz. But what’s interesting about BzzAgent is that, with the combination of their technological capability, their processes and the talent they have in the business, they also have the ability to learn and listen to social media. Understanding what that data means and using it as a pulse on what’s on consumer’s minds is of interest to us too. So it’s about a promotion vehicle for consumers, but a listening vehicle too.

So Dunnhumby will benefit from BzzAgent’s data, and presumably they’ll benefit from yours too?
Absolutely. When we started talking we recognised that they had similar ambitions and values to ourselves, and we saw a very logical way to enhance each other’s business models. For us, it gave us social media capability and social media data; for them, our shopper data can be very helpful for finding out who might be potential agents who they might want to recruit – people who are heavy consumers of particular brands, for example. As for measurement, a lot of brands are in social media because they are trying to affect consumption at the end of the day. Finding out directly what sales are from whom and the role of social media in that – there’s obviously some measurement capability there that we feel we can bring to the table.

How does Dunnhumby combine its transactional data with other research data?
First of all, only ever with the customer’s permission. We obviously want to be transparent and above board and do it with the explicit permission of the customer. We’ve always used segmentation to pull these things together so we’ll be able to look at segment membership of BzzAgents. Segments really become the language and the ‘data point’, if you like, as opposed to the individual households, which we try to keep away from, from a data protection perspective.

BzzAgent has its headquarters in the US while Dunnhumby is based in the UK. What’s the relationship going to be between the UK and US operations?
We’re working with Tesco [the supermarket chain and owner of Dunnhumby] in all our international markets, which includes China, other parts of Asia and Eastern Europe. We have clients in Canada, the States and South America too. At the moment BzzAgent’s footprint is mostly US with a bit of UK and Canada, and one of the great opportunities we see is to grow its footprint in line with Dunnhumby. So depending on our clients and where they take us, we’d like to bring BzzAgent to other markets around the world over the course of time, and that’s a great growth platform for them.

Are you considering further acquisitions?
We are looking to build capability and potentially acquire in other areas – if the right opportunity comes up. Acquisitions are an interesting beast, really – you can have all the strategies in the world, but at the end of the day, however much you want to buy something, unless they want to do it at the right price, and you think you’ve got the right business model and a chance of success, it just remains a strategy on a piece of paper.