David Dobrin picked up my theme on whether ‘pay to play’ does cut it in the 21st century. David’s analysis is generally geared more towards providing insight for the investment community rather than either the buy (customer) or sell (vendor) side in the world of IT analysis. I’ve known David many years. Like many of us, he’s forthright in opinion and a persuasive writer. In this piece, he invokes some academic work:
…by Marc Flandreau, who is at the Graduate Institute of Development and International Studies, Geneva. Marc is an expert on bad-mouthing, or as we like to say in English, “blackmail.” And he has a fascinating historical explanation of how pay-to-play can emerge in information markets.
Marc’s focus is the wild and woolly bond market in Paris pre-World War I, a market that was deeply affected by the emergence of a free (or at least libel-free) press in France, post 1880. At the time, it was so easy to start and print a newspaper cheaply that a new kind of blackmail emerged. It was, essentially, “Pay us, or we’ll say bad things about you.” The very relaxed libel laws at this time made this a genuine threat, and people (Marc shows) really did make money doing it.
David then goes on to explain how in this world of ‘bad mouthing’ it is the more reputable players who end up getting the lion’s share of whatever is doled out, concluding via an audience remark:
“So if I may paraphrase,” a Harvard professor said, after hearing this, “The National Enquirer is one of the things that keeps The New York Times alive.” Marc replied in the affirmative.
adding in…
In his [Marc's] analysis, the accuracy of what these smaller, less reputable people say is irrelevant; it could be true, it could be false. What matters is that you can exert some control over the best people in the industry.
Anybody who has ever taken a PR class already knows this, of course. But what Flandreau contributes are two simple, but odd facts. The premiums are in fact very large, and MOST of the money goes to the larger, more reputable firms.
So what does this mean for Dennis and Vinnie and Brian and Michael Krigsman and Helmuth Gümbel? Well, pretty much it means that their efforts are enriching Gartner and Forrester far more than it enriches them.
Dennis says in a recent tweet, “Pay to play doesn’t cut it.” Sorry Dennis, in this case you’re just wrong. If Marc is right (and I have no reason to think he isn’t), what you’re really doing is supporting the pay-to-play industry.
While it’s an interesting thought, there’s a number of problems with this analysis.
Equating what independent bloggers like myself and those cited are doing as ‘blackmail’ or ‘badmouthing’ is inaccurate. I’m not after the vendors’ money, never called a vendor up and said ‘gimme the money’ or anything remotely like it. It’s never crossed my mind to do so and I don’t know anyone who has used that method of reporting. If it happens then I am content in my naivety although you could argue that the AccountingWeb’s play is a modern day version of that somewhat cynical view.
The vendors have long viewed anything vagualey critical as negative, not realizing that balance is something that can be achieved on all sides and is welcomed by those who wish to be informed.
Media is changing rapidly. The proliferation of cheap or free tools, the rise of distribution via the Internet to a potential global readership and the development of community clusters such as the Enterprise Irregulars and Enterprise Advocates makes it far easier for the strong but independent voice to at least be heard. That could not have happened even 10 years ago when the large analyst firms were in hyper growth mode.
Those of us who are critical of the ‘pay to play’ model say that without transparency of disclosure about the balance of revenue generation between buy and sell side some groups are making it hard for observers and consumers to understand where the monetary influence lays. It is as relevant and important to us as segment and geographical reporting is to Richard Murphy. In my view, understanding where the money goes has a direct impact on how you assess the output of any media and especially in a business to business context.
Traditional forms of media which include electronic forms of paper document distribution are under attack. Every now and again we’ll see the ‘journalist v. blogger’ debate crop up as a way of explaining how media is being dis-intermediated. It’s a complex debate upon which I have no view other than to say that big brands like Gartner, ZDNet (from whom I derive income), AccountingWeb and so on are not going away any time soon. Their models are under attack and like all of us connected to media, are struggling to figure out what happens in a post ‘pay to play’ world. Whether that is advertising in the case of ZDN/AW or perceived influence in the case of Gartner, the little guys are now proving more than pesky. They are genuinely challenging the status quo. More important, the independent can iterate more rapidly than incumbent players. Ever it were so.
It should be no surprise then that my colleague Ray Wang is presenting at the upcoming UK SAP user group meeting. Or that Vinnie Mirchandani has been presenting at NetSuite gigs. Apart from being good colleagues and pals, I know of no way that either Ray or Vinnie could be ‘bought’ in the manner implied in David’s analysis. So why would a user group on the one hand and a vendor on the other choose to ask these folk to keynote? The only explanation can be that both groups consider these people add value to their respective audiences. Which brings us to the question of influence.
Jon Reed wrote an interesting comment to David’s piece. It’s long but this extract provides a neat summary of how many I meet see this issue:
…on the influence level, no question in my mind that blogging has tilted influence in favor of the independents. I follow all these bloggers you’ve cited, and also big analyst blogs, and 90 percent of the time the independent bloggers are a better read (and much more frequently linked to, discussed, and Tweeted). Their strong voices lend well to trust/credibility because they are often very transparent about how they are getting paid and whose agendas they are supporting (such as buyer advocacy). If I’m a end customer and weary of constant vendor spin, I find that commentary refreshing.
He does however warn:
I do think any bloggers who also want to secure end client business need to be aware that rigorous reporting and balanced commentary is crucial to turning influence into purchasing decisions. Flying off the handle or publishing rumors is fun for readers and may even expand influence but it doesn’t encourage buying decisions in my opinion.
That’s pretty much on the money (sic) However, it is important to note that there are, as Vinnie has said in the past, many points of influence. It is a fool indeed who thinks that a buyer will dash out and buy XYZ simply because he has said something profound, provided a deep insight or hoisted a flag. The best any of us can expect is that somewhere along the line, someone will say: ‘Thanks for what you said. It helped me.’
If David is right then why do the vendors continue to ask people like myself and all those named in David’s article to attend their events? Why do they put on special sessions for us? Why do I get peppered with press releases from vendor PR reps? Why do PR’s blatantly ask me to write about their clients? Why do I continue to receive invitations to meet with vendors at their expense? Why, for all my tough critique, does SAP have me in its Mentor and influencer programs? Why did some of the vendors come to me first with their gripes about the AccountingWeb thing? Why did Tom Dunkersley, AW’s head of marketing choose to comment on my previous post? How come Richard Murphy is becoming a go-to voice for TV? Or that disgruntled employees from the Big Four flock to Francine McKenna?Are we an aberration to be entertained until big media/analysts figure out how to change their business models? Let’s put it this way:
The AccountingWeb piece has elicited a good amount of comment. It has also elicited more back channel email responses. The argument goes like this: If we don’t pay then we don’t play and are therefore invisible to the AW audience. On the other hand, if nobody pays then AW has to rethink its approach. It will be a good test case to discover how innovative the vendors will turn out to be or whether they will, in David’s terms, enrich the big fish in the pond.
The independents have always existed but today their voices are readily amplified. All who participate in the media driven game are acutely aware that the independent voice has arrived as something of importance and which everyone with a stake wishes to influence. The vendor and analysts communities are watching to see what Enterprise Advocates can achieve (if anything.) We’re not going away. We are inventing the new ways of evaluating, disseminating, understanding and communicating to anyone who chooses to read what we have to say. It is far from perfect, is under constant refresh while the ‘old world’ tries to keep us still and silent. It won’t happen.
Most interesting to me though was a Tweet I saw from Jonathan Yarmis (ex-AMR.) He says that Gideon Gartner (Gartner founder) and Carter Lusher (Sage Circle AR advisory) are meeting with CIO’s and media in New York to discuss the future of the analyst trade. Two small but powerful voices. That can only mean one thing. The current ‘pay to play’ model is dead. Over to you David.
