[GUEST POST] Analyst Relations Basics – part one

NB This is a cross-post from the Buzz Method blog, where it was originally posted in November 2009 as the first in a series of articles on Analyst Relations basics. Please note that the views expressed within the article do not necessarily reflect those of the IIAR – they are the opinion of Dominic Pannell, founder of Buzz Method Ltd.

I’ve had several conversations about Industry Analyst Relations (AR) with AR professionals over recent months and I know that some of my views are a little contentious, but that’s all the more reason for me to publish them.

Can’t make an omelette without breaking eggs, right?

When explaining AR to non-practitioners (and some practitioners, too) I generally start by establishing that the discipline is most mature within information and communication technologies (ICT) even if it is an approach that can largely be applied to other sectors. That’s why you find in-house AR teams within the marketing/PR/corp comms departments of tech and telecoms companies¹. In the agency world, too, AR usually lives within the Tech PR team. Actually, I believe that this can damage the perception of AR and comms agencies might consider making a clearer distinction.

The reason AR is so well established in ICT is that there is an army of industry analysts whose job it is to research and analyse ICT markets (if you want a potted history and pretty good summary of the industry analysis landscape, you could do far worse than read the opening chapters of “Influencing the Influencers” by Bill Hopkins and his friends at KCG).

Analysts come in various flavours, each with different requirements but all sharing a need to communicate constantly with market players so that they can advise their clients who include buyers of and investors in ICT.

I generally contend that AR programmes can have three levels of sophistication. Today I will look at the most basic (and ineffective) level and I’ll follow it up with a discussion of more advanced AR over the next couple of days.

Level 1: AR as PR

This is what thousands of low-end Tech PR agencies offer their clients, possibly believing that it is a valuable service. I’ve also known a few vendors taking this approach in their eagerness to reassure senior executives that they are not neglecting this influential stakeholder audience. Oftentimes, however, this approach will result in harming relationships with analysts (I do know of one case where it worked brilliantly, but that really was the rule-proving exception).

AR as PR involves adding a few analysts (maybe a lot of analysts) to an existing PR programme so that they receive news releases, invitations to media events, etc. whenever the client has a story it wants to see in the papers. News releases may be followed up by an eager call to ‘sell in’ the story.

Trouble is, this is completely missing the point.

Industry analysts strive to be experts in their coverage area. They are not necessarily interested in grabbing a ‘scoop’ but focus on the underlying business and technology drivers that affect the sector or companies they study. Unlike many traditional journalists, an analyst is not writing a one-off story for a publication that might not publish again on the same subject for months, even years.

Depending on the particular analyst, she may mention your company in a report, or write an entire tome on your firm, or on just one particular product or technology, or she may write nothing at all because that’s not her job. She might also provide her clients with confidential advice on whether or not to consider you as a supplier, or she could pop up on TV or radio telling the world that your sector is set to grow exponentially over the next few years (or bomb).

A wise man once told me that an analyst only knows what she has been told. It’s true and the implication is that analysts need constantly to be speaking to ICT vendors and end-users² so that they have a complete, up-to-date understanding of what is going on out there – remember, analysts are in the business of making predictions, estimating market sizes and how well technologies will sell as well as a bunch of other stuff that help people make investment decisions.

Some analysts do like to receive media releases, but I can assure you that they prefer to be briefed ahead of a major press launch, so that they can work out the implications before being asked to comment by their clients or the media.

That last point on its own should be sufficient reason to separate AR from PR programmes: many journalists like to strengthen articles with a quote from an industry analyst, who they consider to be informed, independent third parties. Unless he has had a chance to get his head round your major technological innovation, he won’t be in a position to explain how ground-breaking it is, will he?

But the most important lesson is that analysts build deep relationships with the companies they follow. Analyst firm IDC has been around since 1964, Yankee Group started in 1970 and Gartner was founded in 1979. Their key analysts have been speaking to execs at major ICT firms for years, perhaps decades. One function of AR is to assist and enhance a set of ongoing relationships – I have run individual AR programmes over several years, but I was always conscious that my client’s relationship with certain core analysts had lasted much longer and indeed continues today even though my contract may have finished.

Analysts are interested in evolution over time, not just the latest fads and gimmicks. If someone tries to pitch her something half-baked, an experienced analyst should see through the hot air and point out the flaws. That’s another very valid reason to brief media separately from analysts. Trust me on this.

Personally, I’ve never been interested in AR as PR, as it adds little business value.

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Footnotes:

1. Deciding the best department into which AR should report is an important and much-debated subject in its own right and best left to another day.
2. There are a few exceptions who only speak to one side of the marketplace.