Policing the online 'buzz'

A new generation of software tries to optimize online marketing and branding by controlling online 'buzz.' Fortune's Oliver Ryan reports.

By Oliver Ryan, Fortune

(Fortune Magazine) -- Michael Dell was mingling in Davos, Switzerland, this winter when he spotted the blogger Jeff Jarvis and went over to apologize. It had been nearly two years since Jarvis posted a series of irate messages to his BuzzMachine blog about the failings of his Dell computer. The posts eventually drew national attention, and Jarvis's headline DELL HELL has since become shorthand for the ability of a lone blogger to deliver a body blow to an unsuspecting business.

Two years later, poised to retake the helm at his company, Michael Dell undoubtedly figured it couldn't hurt to make nice.

Jonah Peretti is turning online content into raves for MTV

All that could have been avoided if, in 2005, Dell's (Charts) operatives had had access to the services of Bay Area startup BuzzLogic, which is the newest of a generation of companies with Web software designed to spot and neutralize an incendiary blogger before a marketing conflagration ensues. Led by CEO Rob Crumpler, BuzzLogic has attracted $9.6 million in venture funding.

How does it work? Input a series of search terms, and BuzzLogic whips up a nifty "conversation map" with circles and lines tracking not just who's talking about the product but also which opinions matter most. One impressed tester (the product doesn't officially launch until April) is Lenovo (Charts), which credits BuzzLogic with heading off its own "Lenovo hell" moment.

Last year when tech-oriented blogger Rick Klau went public with his frustration over his ThinkPad's faulty hard drive (Lenovo acquired IBM's personal computer business in 2005 and now manufactures the ThinkPad), he received a phone call from David Churbuck, Lenovo's VP of global Web marketing, within a few hours.

Churbuck had been alerted to Klau's post by BuzzLogic and phoned with an offer to fix the problem. Klau's rants turned to raves, and the good news was picked up by other bloggers. "BuzzLogic has a winner," Churbuck then gushed - naturally, on his own blog.

With a starting price of $500 a month, BuzzLogic styles itself a disrupter, a guerrilla force compared with more established players such as Nielsen BuzzMetrics, which combines both algorithm technology and human analysis in a higher-priced service.

The market for the products (some of which don't even have "buzz" in their name) remains small - well shy of $100 million - but growing fast. Forrester analyst Peter Kim estimates that sales in the young "brand monitoring" industry are growing about 70 percent a year and points out that the tools are quickly moving beyond the PR function and into mainstream marketing. "It's changed the way people get input about what consumers want. They no longer rely on focus groups."

Just as brand-monitoring software helps marketers play defense, entrepreneur Jonah Peretti is using a similar technology to put them on the offensive. His New York City startup called (you guessed it) BuzzFeed digs up "high velocity" headlines from the Web and then inserts them, on the fly, into banner ads for related products. Think of it as the Web's answer to the way print movie ads feature raves from critics.

Peretti expects this quasi-user-generated copy - BuzzFeed editors vet and massage the headlines - will lead to more mouse clicks. MTV is experimenting with BuzzFeed content in campaigns for five of its shows.

And what of Dell's scourge, Jeff Jarvis? He, too, has gotten in on the action. He is now a consulting editor for DayLife, an automated news aggregator that uses related technology and whose debut last month was, well, all the buzz.


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