[GUEST POST] Trends: Influencers Aspire For Market Maker Status by Ray Wang / Constellation

(This post is cross-posted on the SoftwareInsider blog.)

Eight Major Influencer Types Exist Today

Analyst relations, public relations, influencer relations and other interested parties have witnessed the rapidly evolving and emerging buy-side and market influencer models.  In the past, eight influencer types followed five distinct traits (see Figure 1):

  1. Fame. Awareness, notoriety, perceived market status.
  2. Fortune. Billing rates, wealth, earnings.
  3. Market impact. Buy-side decisions making, sell-side product direction.
  4. Personal impact. Individual decisions, behaviour changes.
  5. Initial business model. Revenue drivers, monetization strategy.

Figure 1. Five Traits Of The Major Influencer Types

Influencer Types Converge As Firms Seek Survival And Maintain Relevance

However, changing influencer economics over the past 5 years have forced convergence among the eight major influencer types (see Figure 2.).  In fact, the traits among influencer types have blurred with increasing adoption of social media and rapid decimation of the ad-supported media model.  Peer to peer facilitators, user generated content, and bloggers have accelerated the destruction of legacy models.  As a result, influencer types have adopted and invaded adjacent business models in order to grow revenue.  Subequently, shifts in market forces have inspired others to create new business models.  For example:

  1. Events producers have fallen neatly into the hands of media moguls. Event producers own the socialization of influence via trade shows, events, and summits.  Yet, nearly all the event production companies have been acquired by struggling media conglomerates.  Declines in ad revenues created natural synergies with a readership base seeking to attain knowledge and socialize their experiences.  More importantly, declining advertising revenues were bolstered via field marketing spend in event sponsorships.  A few firms such as George P. Johnson and Viad Corp still dominate niche markets.  Unfortunately, most have aligned with media properties.  Media moguls and other influencer types will seek to acquire the remaining stand alone event producers in order to bolster profits.
  2. Management consultants have aligned with academics and entered media through blogs. Management consultants deliver expertise and front line influence with buyers.  Hoping to establish criteria through partnerships with academia, major firms sponsor joint studies to raise mindshare among clients and prospects.  In addition, management consultants have slowly entered the media fray.  McKinsey & Co. is a classic example as an early mover through its McKinsey Quarterly.  Others have since followed using blogs as the key driver of thought leadership via social media.   Management consultants will push into the industry analyst type for the billing rates despite lack of perceived objectivity and credibility.
  3. Industry analysts have sought greater influence through peer to peer facilitation and higher profits via consulting. Research firms bring objectivity and high levels of credibility to buyers and the market.  Gartner Group, Forrester, IDC, Ovum, and Yankee have traditionally built events and consulting businesses to complement their syndicated research models.  Under fire from peer to peer exchange forums such as Corporate Executive Board, firms have countered with similar offerings.  Additionally, industry analyst firms have grown dependent on consulting revenues to bolster profitability.  Entry of new firms such as RedMonk and Altimeter Group who adopt open research models and trade highly scalable syndicated research profits for consulting revenue streams threaten legacy syndicated research models.  Legacy research firms can expect to remain under attack from media and peer to peer facilitators such as Wikibon and Gerson Lehrman Group who can deliver more cost effective analysis.
  4. Media moguls have adopted the most adjacent revenue streams. Media moguls deliver mass influence and credibility.  Media players were hit first in the business model change.  GigaOm’s events business and introduction of their research offering GigaOm Pro show an agile response to balancing media mogul, event producer, and industry analyst competencies.  Mashable and Tech Crunch all hae complimentary and profitable events businesses.  Meanwhile, United Business Media/ TechWeb has long monetized its media empire through an events empire.  However, one of its titles, Information Week, launched its Information Week analytics product two years ago – effectively entering the industry analyst business through market research.  IW analytics now competes with IDC and Gartner for primary research subscriptions.   Media moguls also seek authorship to drive additional individual revenue and influence.  Media moguls will enter the most adjacencies to support a dying advertising model.
  5. Peer to peer facilitators have blended events with industry analysis. Peer to peer facilitators influence buying using crowdsourcing of experts to buyers.  Corporate Executive Board showed how a stone soup model for sharing peer to peer insights could turn into a $410M business.  Expert network leader Gerson Lehrman Group amassed an insights business serving the financial services and investment industry.  Software Insider estimates annual revenues north of $500M.  Peer to peer facilitators continue their attack on industry analysts through peer insights and will gain market acceptance and traction through larger networks.
  6. Academics have not effectively extended influence other than authorship. Academics achieve respect but lack mass influence with buyers.  Most academics remain focused on their core mission of research and teaching.  Because higher education institutions allow their academics to keep most book revenues and speaking fees a growing number enter authorship to grow their influence.  Academics must extend to new influencer types in order to regain relevance and impact.
  7. Training gurus have remained isolated to author led business models. Training gurus deliver personal value but do not usually impact upstream buying decisions.  Many authors such as Steven Covey and Michael Hammer have built training academies to put their books into action.  Training gurus usually focus on volume based business models.  Expect training gurus to enter a similar fate of event producers and become absorbed by other influencer types.
  8. Authors and producers have entered training adjacencies and aligned with media moguls. Authors create influence through their thought leadership in books.   Producers create thought leadership in other media forms.  Collectively known here as Authors, they will continue to expand their influence by participating in media and building related training programs for scalable revenue.  All influencer types will continue to seek adjacencies in the author influencer type.

Figure 2. Convergence In Business Models Accelerate Among The Eight Major Influencer Types

The Bottom Line: Influencers Will Adopt Multiple Influencer Types to Earn Market Maker Status

Market makers create tremendous influence in the market.  Today’s savvy influencers already adapt multiple influencer types to gain market maker status.  A true market maker will master at least four influencer types. For example, some industry analysts earn market maker status by authoring books, writing for media publications, facilitating peer to peer sessions, delivering training, advising clients via consulting, keynoting events, and partnering with academia.   Management consultants who author books, gain a column on a blog such as Forbes, and run focused events achieve market maker status.   Blogger media moguls who write industry analyst reports, lead training sessions, and speak at events gain market maker status.  Expect legacy models to be blown up as new firms of market makers emerge and continue the disinter-mediation of the influencer market.

Your POV.

Are we missing any influencer categories?  How will firms divide responsibilities for market makers who participate in multiple influencer types?  As this progresses, how will influencer relations change to meet these new hybrid firms of market makers?  Will AR or PR take the lead?  Will the classical models still matter?     Share your thoughts in the comments or send a private post to rwang0 at gmail dot com or r at softwaresinsider dot org and we’ll keep your anonymity.

Related Resources

20100724  Personal Log:  The 7 Tenets Of Building A Star Analyst firm.


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9 thoughts on “[GUEST POST] Trends: Influencers Aspire For Market Maker Status by Ray Wang / Constellation”

  1. Ray, et al:

    Another type of market-maker I think you’re missing is the “expert user” who is a domain expert who, through various venues, is able to show off and/or share their expertise with peers and becomes a recognized market maker.

    To me this type of influencer is more “real” and “organic” than most of the ones you mention because this type of market maker has a “day job” that may or may not be related to the domain expertise they are recognized for.

    Also, this type of individual is motivated by passion and peer recognition, as opposed to specific fame, monetary rewards. Market and/or personal impact is of secondary importance to the person’s own passion for the domain topic.

    I’ve seen a number of expert bloggers who have attained this special status. Very high likelihood they use social media as the rungs to climb the ladder, but they are not reaching for anything specific at the top of the ladder other than peer recognition.

    If I had to force this type of influencer into a single category, it would probably be “Academics” as this is the model I think it most closely mimics, though there is no business model associated with it.



  2. Great point. Expert users could be called out. I’ve lumped them in the P2P area as a focal point to influence. Question is how can influencer relations evolve to build relationships with expert users.

  3. Great post Ray the second one I have read in two days about Influencer Relations/marketing.

    Other possible factors to add to the mix:
    Industry bodies
    Think Tanks – guess that is part of academia

    Aside from who else to add to the mix my take home point is that the channels/info points impacting purchasing has proliferated due almost entirely due to the internet and the fact that internet/p2p knowledge sharing is so pervasive.

    In terms of who will win e.g. AR/PR – my gut feel is that PR will claim the victory while AR will achieve part of the victory. Folks doing Influencer Relations will be viewed with scepticism – i.e. is IR a rebrand of AR or PR taking the mot du jour (word of the day). Ultimately its about working who we need to sell to and who/how are they being influenced. The upside of all of this confusion is that measurement is getting better and better.

    Thanks again


  4. Nothing new, influencers have always adopted multiple influencer types for market status.

    I started as an analyst at IDC in 1986. IDG was the media mogul, IDC was the industry analyst, world expo corp was the events organizer. IDC did syndicated research and consulting. IDG got its money from advertising, subscriptions and selling prospect lists. World expo got their money from sponsors and attendees. One company. Multiple ways of monetising and influencing.

    There remain only three influencing methods: one-one, one-many, many-many.

    The Internet has changed the way those methods are executed, so many-many was an events business in the old days but now is called peer-peer in its new form. The underlying premise is still the same: network with your peers.

    The Internet has changed the way those methods are monetised. Paid subscriptions to print tech magazines are unheard of these days. Advertising in print has plummeted. Selling subscriber data can still be done, but only highly specialised.

    Naturally news publishers are looking to “new” ways of making money. One of these ways is adding a “pro” component like GigaOM and information week. Or light reading and heavy reading. And adding a many-many component like events or peer-peer communities. Nothing new. Has been done before. No new hybrid models.

    What has changed is reach. The expert (author, analyst, consultant, teacher, passionate, etc.) who influenced one-one in the old days can now influence one-many. Or facilitate many-many.

    So, converged influencer business models have existed for a long time. Only now they can extend their reach. That is the real disruption.


  5. R said:
    > Question is how can influencer relations evolve
    > to build relationships with expert users.

    There are ways to do this. In fact, we at HP are working to forge these relationships and turn these experts into advocates.

  6. Ray,

    Excellent post and good comments too.

    It really got me thinking that most “IT Analysts” and bloggers alike are stuck in one mode, often because of skills, time, cashflow or personality/ego/revenue-sharing issues.

    While it’s hard to do everything, I do think they’re missing a trick or two:

    – only large-ish firms (IDC and Gartner namely) do well in events, though several have proven it can be a very successful business (Butler Group, CXP, some UK boutiques)

    – Large firms miss-out on P2P, yet as you point out there’s a real need there (CEB, Wikibon, etc). I guess it’s mostly due to the fact they usually try to sell consulting, then RAS to end-users, a model which requires significant business-development investments.

    – Analyst firms don’t exploit well the consultants and academia connection, with one or two exceptions.

    Where’s the future? IMHO, we’ll see more “Synaptic firms”, à la Constellation but whether they’ll gain critical mass remains to be seen.

  7. I think Gerry gets at something with “expert user” that deserves further analysis: In B2B the #1 “influence” activity remains private peer-to-peer discussions and connections – I would argue the facilitator, if there is one, is merely an enzyme here and not truly an influencer. In fact, peer-to-peer has more market impact in many markets than all other factors combined; most people outside that circle, with the exception of trusted advisors (some consultants and analysts), are merely reporting. In B2B we shouldn’t forget that the people with the budgets and recent histories of being practitioners are by far the most credible influencers. Influencer type 9, omitted in the original chart, trumps all others in B2B.

  8. I tend to agree with Pim, this has always been the case for the 20 years I have been in the field. The reach and execution has adopted to newer means but convergence has always been there even when I managed at Frost.

    What I have noticed over the years is the micro-categories within the influencer type; eg in IA you could classify the advice as very (1) HOLISTIC (advising on making markets/ geos/ verticals/ segments/ solutions/ Acquisitions at a overall level generally 12-18 months out), (2) PRODUCT (which features are required, product/ solution comparison and the way forward at the right price points generally 2-6 months out), (3) RTM (channels, eco, etc, generally 1 week – 6 months out)), (4) DATA (market share, quarterly data, forecasts, generally 2 months – 3 years out), (5) User Analysis (usage patterns, buying behaviour, etc , generally 3 Months – 1 Year out). (I may have left some out!)

    Having worked in most of these segments one time or another I believe their degree of influence on making new markets varies considerably. I have also notice similar micro-categories in Events, Media and Management Consultants. It would be interesting to see if ‘reach’ and ‘social media’ changes the micro-categories in the influencer types and their degree of Impact. Judging over the last three years and the flow of dollars my observation is not significantly thus far.

  9. Pingback: The Ray Constellation Experience | The IIAR Blog

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