How Pierre Chappaz made a mint from social media

655-pierre-chappaz — Pierre Chappaz, Ebuzzing

Pierre Chappaz, 54, was a marketing manager at IBM during the late 1990s dotcom boom. He watched as internet firms sprang from nowhere to make millions for their founders, and decided it was time to act.

In America, websites that enabled consumers to compare prices to find the cheapest deals on products were taking off. Chappaz quit and persuaded some venture capitalists to back Kelkoo', his plan for a European price-comparison site. He launched in France, Britain and Germany simultaneously. The funds raised were ploughed into "buying traffic" paying to appear in searches or for advertisements that would take customers to the site. But six months later, it seemed disaster had struck: the tech bubble burst.

"Companies were going bust everywhere. It was a really scary time." But Kelkoo's backers didn't lose faith, keeping their money invested with him. As a result, the crash actually allowed Chappaz to pick up rivals on the cheap, in his quest for rapid growth. He travelled Europe meeting the bosses of rival websites. Even when he couldn't afford to buy a company outright, he would propose a merger, even though that would dilute his own equity.

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But he didn't just merge with anyone. "I wanted to work with entrepreneurs who had founded the business, not those who were managing it for a larger company. Entrepreneurs are more dynamic about growing their business."

His all-out growth strategy began to pay off as e-commerce grew rapidly and won custom from the high street. By 2005, Kelkoo was Europe's biggest price-comparison website and its biggest buyer of internet traffic, which quickly drew the attention of the large US technology firms. Eventually Yahoo made a €600m bid for the company. "By then my stake had been reduced to 3%. That's a small stake, but 3% of €600m isn't bad."

Despite his windfall, Chappaz was in no mood to retire. Soon after selling up, he started a new tech firm, called Wikio. It was a search engine designed to trawl through social media and blogs to find content that wouldn't come up in a conventional search. But a different purpose for the software soon became apparent. He met with the owners of Ebuzzing, an online advertising agency. They realised that Wikio's ability to locate and evaluate social media content could have huge potential for advertisers, giving access to more specialised content that had previously been hard to reach.

Chappaz engineered a merger, and now Ebuzzing is the European leader in social media marketing campaigns, offering clients the ability to place advertisements across a range of blogs and social media profiles.

Wikio's technology can also measure the influence a particular person's Twitter or Facebook profile has, and choose to advertise on those sites. "The ability to identify an influencer makes a campaign far more cost-effective. Especially if a client wants an advertisement to go viral" (ie, spread around via word of mouth'). The firm also runs campaigns on traditional news sites, as "not every product or campaign is suited to social media".

Chappaz's aim with Ebuzzing is to create a "truly global firm". The company runs campaigns across sites in 93 countries, and has just opened a new office in America. "Next we will target Asia."

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James graduated from Keele University with a BA (Hons) in English literature and history, and has a certificate in journalism from the NCTJ.

James has worked as a freelance journalist in various Latin American countries. He also had a spell at ITV, as well as writing for Television Business International and covering the European equity markets for the Forbes.com London bureau.

James has travelled extensively in emerging markets, reporting for international energy magazines such as Oil and Gas Investor, and institutional publications such as the Commonwealth Business Environment Report.

He founded LatAm INVESTOR, the UK's only Latin American-focused investment magazine.

He is currently the Business Editor at Compass Media.