The End of Industry Analysts? Why Review Sites Are Disruptive to the B2B Tech Buying Process
"Traditional analyst firms should be on the watch," TrustRadius CEO Vinay Bhagat told me in a...
I hadn’t heard from my friend David in years. But when my former colleague reached out over LinkedIn to ask for a breakfast meeting at a nearby diner, I accepted the invitation right away.
I liked David and enjoyed sharing war stories about our days together in the corporate world at a wireless communications company. David was a senior network engineer who I frequently offered up for interviews with the news media.
When it came to media interviews, David was a natural. He made my job easier because he could discuss telecommunications in engaging language that even the most technology-challenged reporters could understand. “Oh, I get it,” they would always say. That was music to my ears, because it inevitably led to better, longer and more sympathetic stories about our company. The coverage was a feather in my cap and great personal branding for David.
The sky in downtown Dallas was clear and crystal blue that morning as I walked into the restaurant. David spotted me immediately, stood up and waved from a corner booth. “Hey! It’s good to see you,” he said. We shook hands, then slid into our respective sides of the booth to order our food and talk.
I quickly learned that the visibility David had achieved through his role as a thought leader had helped him to secure a position as CEO with a promising mobile commerce startup that the previous year had received more than $10 million in VC funding. David was in his third week on the job.
“That’s very exciting, David,” I said. “How is business going? Are you doing well?”
“Yes and no,” David told me. “Securing that funding was amazing for a bootstrapped startup that had just gotten off the ground. And the technology is sound. But the company has only landed two customers, and they just haven’t been able to leverage their financial resources to accelerate their growth as yet.
“That’s why the investors brought me in,” he continued. “They want someone who understands the technology and can communicate it in a compelling, credible way. I’ve earned a reputation for that – thanks to you in no small part.”
“Thank you, David,” I said. “So what’s your next move? How can I help?”
“I’m getting to that,” he said with a smile. “Shortly after the founder got funding, he brought in a big PR firm to get the word out. He thought his company had built a better mousetrap, and he wanted the world to know about it. He expected the sales to follow. Unfortunately, a year later, it hasn’t worked out that way. That’s why he was asked to step aside as CEO.”
“What kind of results did you see from the investment in PR?” I asked.
“If you Google us, you’ll see that we got some nice media hits. We were in TechCrunch and Forbes, we were in Internet Retailer, Retail Touchpoints, Mobile Marketer and some vertical trades. We produced thought-leadership articles on mobile commerce technology that appeared in a number of publications. After I started, they showed me a pie chart that indicated we had increased our share of voice relative to our competitors -- that we were mentioned in 20 percent more of the coverage of our space than when the engagement started. The PR firm expressed satisfaction with this result. But it didn’t really add up to much in terms of impact for us,” David said.
“What specific impact was the founder hoping for?” I asked.
“He wanted it to open doors for us and it didn’t,” David shrugged. “No one really saw or mentioned the coverage. No one recognized our name when we emailed or called them. Traffic to our website went up briefly when we put out a big announcement, but then it would flatten out again. We’ve seen no sustained lift in people knowing us, visiting our site, wanting to learn more about us.”
“Right,” I said, unsurprised.
“So that’s why I called you. I think our founder hired the wrong agency, and I want to hire you. I know PR can make a big difference because it did when we worked together before. If it could work then, why can’t it work now? I want you to get us on the map. I want media coverage that will help our salespeople get a better response rate. I trust you to do it because I’ve seen you do it.”
I took a long sip of coffee before responding. “I don’t really do PR that way anymore, David. What we did back then would not work now.”
“I’m not sure I understand,” he replied. “What other way is there to do PR? It’s about getting media coverage, right? Finding out what publications and outlets your clients need to be in, then building relationships and coming up with story ideas so they will cover your clients and increase their visibility, right? Isn’t that the whole point of the job?”
“It’s fair to say that it was the whole point of the job. That’s how it’s been in PR for many years. But that’s a losing game in 2020. It becomes more of a losing game every day, in fact. The experience you had with your PR firm is incredibly common today. The reason is not that PR firms don’t know what they’re doing or aren’t working hard. In fact, in many cases they are working harder than ever. The problem is that they are still doing what worked 5 or 10 years ago and not what works today.”
“OK, you’ve piqued my interest,” David said. “Tell me more.”
A Painful Reality
“Let’s look at the numbers,” I replied. “U.S. newsroom employment has declined by 25 percent in the past decade. There were 28,000 fewer reporters, editors, photographers and videographers in newsroom jobs in 2018 than there were in 2008. That’s across all news platforms – newspaper, TV, cable, radio and digital. In inflation-adjusted dollars, advertising revenues for the news media have been in a constant state of decline for 40 years. Readership and influence is down across the board for broad-market media outlets.”
I paused. “Look, this pains me to say, David. I started my career as a newspaper reporter. I believe in journalism. But it used to be, if you were in a front-page story in the Dallas Morning News, that meant something. The paper carrier would throw that big Sunday newspaper on your front porch, you’d pick it up and the whole world would know you were on the front page. Now, who knows the difference between a ‘front-page story’ and any other story on the paper’s website? And who reads it, anyway?
“The Sunday circulation of the Dallas Morning News was 815,000 in 1994; today it’s less than a third of that, including digital subscribers. And this is during a time when the population of the Dallas/Fort Worth area has been booming – growing at one of the fastest rates in the country, with hundreds of thousands of incoming residents.”
David frowned and leaned in to hear more.
“This is your classic example of diminishing returns, David. And it’s not just true of newspapers, it’s true of virtually all media outlets that are targeting broad audiences. The cycle we’re experiencing is this: Fewer journalists are around to cover stories, which means PR people have to work harder and spend more time than ever to get their attention. Then when you do get their attention, if they cover you, that coverage has fewer readers or viewers and less influence than before. You’re lucky, frankly, if the audiences you are targeting – for example, your customers and prospects – ever see that coverage at all. That’s why the coverage that other PR agency got for you had so little real impact on your business.”
“But I know some media sites that seem to be doing well,” David said. “Forbes, for example. They sent me a media kit and it said they reached over 70 million unique visitors per month. That’s much bigger than their readership in the past, according to the media kit.”
“That’s true, but it’s also a bit deceptive,” I cautioned. “Because that traffic is spread out over more than 1.5 million pages on the Forbes.com domain. Since there’s no limit to how much you can publish on a website, these outlets have decided that more pages are better for traffic. Forbes has recruited thousands of contributors to publish on their platform in order to achieve that – generally just for the privilege of saying they are published by Forbes.”
“Yes, a number of publications have reached out to me about writing articles for them,” David said.
“Right,” I nodded. “That’s what happens when media outlets don’t have the budget for a full staff but have to keep ‘feeding the beast’ of publishing more and more content to grow or stay viable. They shift the labor cost to the people who are seeking the coverage by making them write the articles. It’s no coincidence that on my agency’s staff I have former journalists who are essentially doing the same thing they were doing when they were on a publication’s staff: writing articles for major publications. But the time and cost to produce those stories is now on me (and ultimately, comes from my clients’ budgets), so we have to weigh the value carefully.”
“The other agency was always telling me about the ‘byline opportunities’ they had secured, and that it was really important for us to produce those stories and get that exposure. They said it was well worth the time and effort and that that’s how PR works today. You disagree?” David asked.
“Yes. The truth is, a lot of times, it isn’t worth it. Let’s look at what’s changed: It used to be the PR person would pitch a story idea and if the publication liked it, a reporter would interview the company executive for 10 minutes and then write a story. Now if they like your story pitch, they say: ‘Hey, that’s a great idea. Will you write 1,500 words on it for me?’ That’s a much bigger ask of the client. You’re going from a 10 minute time commitment to a 10 hour time commitment. It also has less impact than a traditional media placement, because ultimately when you’re the one telling the story, it’s not as powerful as when someone tells a story about you.”
“So we shouldn’t write articles for industry publications?”
“You should do it, David, but you have to be selective. We look at things like the media site’s Domain Authority and Trust Flow -- influence metrics from the marketing analytics companies Moz and Majestic -- to determine if a byline article placement is actually going to be seen by the right audience and enhance a client’s visibility. Fact is, many of these articles just immediately disappear into the bowels of the Internet, never to be heard from again.”
A New Hope
David nodded. “So what’s the best play then, given all these changes? Where does that leave you as an agency? And me as a potential client, for that matter?”
I smiled and said, “The good news is that people are still reading and consuming information, including information about brands, companies, products – and thought leaders like you, David. They are just consuming it in a different way.
“I’ve seen these trends developing for a while. I decided to take a step back and ask myself, ‘OK, forget media coverage for a minute. What is the business goal of media coverage?’ It’s achieving the business goal that’s important to my clients; the media coverage doesn’t matter if it doesn’t do that.”
“I understand,” David said. “The goal is visibility, obviously. My startup needs better awareness in the market.”
“I would argue that that’s not why anyone actually hires a PR firm today,” I replied. “If you simply want visibility -- if you simply want to raise awareness -- it would be more cost-effective to buy highly focused ads and serve them to your target audience. But that’s not really what you’re looking for, right?”
“I guess not, no. So what am I looking for?”
“You are looking for authority. You are looking for credibility. Ultimately, you are looking for one thing above all else: Trust. Your company needs to be trusted in the market, or you won’t be able to grow. Traditionally, PR firms have used media coverage to borrow the media outlet’s credibility and give you that mantle of trust, but that's not enough anymore. You need to do it in other ways as well."
I asked the waitress for the check. “Hey!” David objected. “Not so fast – I asked you to breakfast.”
“That’s OK,” I smiled. “I have a feeling you’re going to be a client very soon, so I’m writing this meal off as a business development expense.”
The next week, we were off and running on a PR program centered not just on media relations, but on securing trust at scale.
Scott is founder and CEO of Idea Grove, one of the most forward-looking public relations agencies in the United States. Idea Grove focuses on helping technology companies reach media and buyers, with clients ranging from venture-backed startups to Fortune 100 companies.
"Traditional analyst firms should be on the watch," TrustRadius CEO Vinay Bhagat told me in a...