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Press Coverage for Clients Only: What Do You Guys Think?

James brought my attention to an interesting ethical debate that affects our business model, and I’m curious as to what you guys think on it. Let me go through it, explain our thinking, and then ask (for those that feel comfortable commenting on such matters) what you guys think. So first, the issue at hand:

Is restricting press coverage – whether that’s quotes for press releases or the ability to give our name to the press as someone knowledgeable about a launch or some such – only to our paying clients, ethical? If we say that for you to ask us for a supporting quote for the release, or the ability to give our name to the press as you go to market, you need to be a client – is that right or wrong?

David Rossiter and ARmadgeddon are fairly unambiguous in their belief that it’s the latter. Here’s David:

You see, I think that it’s completely inappropriate for an analyst firm to ask for payment to provide a quote. I also think it’s out of order for analyst companies to only provide quotes to their clients.

Either way, the analyst firm is at risk of being seen as endorsing a company in return for money. They’re potentially allowing vendors to believe they can buy influence.

And here’s ARmadgeddon:

Quotes for hire, interesting concept…

We obviously agree with David that this would be utterly un-ethical

That, in a nutshell, is the essence of the debate. I won’t comment on the quotes above directly – my opinion on the matter would be pretty much worthless – but I’d be very interested in your thoughts. Instead of countering their position, let me explain our policy and let you judge for yourselves.

Put simply, our policy is this: as a rule, we only supply quotes for releases or allow our name to be given to the press as references for existing, paying clients. That’s pretty much it – it’s not terribly complicated. We’ll comment on anyone if they arrive at us independently (ask any reporter you know), we do not give our clients preferential treatment in the positive vs negative sense (just look at some of my public commentary about the ODF, for example), and we have never and will never sign our name to a quote supplied to us by a vendor. I should also be clear that we do not sell quotes on a one off basis, in a drive by “we need something positive” fashion. We provide them only to paying customers that have engaged with us on a subscription (i.e. retainer) basis.

But forget all that, what I think David and ARmadgeddon’s real concern is is that you’re intrinsically and unavoidably biased towards a customer when you provide commentary. Who knows – maybe they’re right. What I can tell you, however, is that our paying customers have regularly been surprised – and quite unhappy – when quotes that we’ve supplied as references on their behalf have been used against them. Maybe that confirms the suspicions of folks like David and ARmadgeddon, but that’s just how we work. Being a press reference, does not in any way guarantee that we’ll be a positive press reference. As James says, You Can Buy Our Thinking But You Can’t Buy Our Opinion.

About two years ago, I spoke with a reporter from the Wall St Journal about a RedMonk customer’s upcoming product launch. This particular vendor was competing with Microsoft, and in outlining the customers strategy over perhaps 15 or 20 minutes on the phone, I made no effort to conceal the fact that Microsoft was absolutely the incumbent in the space and would be difficult to dislodge. Out of all of the material I provided on the product in question, the quote chosen for the piece was that discussing Microsoft’s position. Needless to say the customer was unhappy – and probably not enthused about providing my name as a reference – but as Johnny Cash says, I guess things happen that way.

There’s an economic component to this – as James discusses, fielding press calls for some of our larger vendor clients takes a lot more time than you’d expect – but I really have no problem acknowledging this practice.

But as I said, I’m very curious as to what you guys think? Does the practice bias or compromise our coverage in some way?

Categories: RedMonk Miscellaneous.

  • Danno

    Either you’re a shill, or you’ve got your principles.

    I don’t think asking for feedback is going to help or even influence a decision like that.

    And for that matter, if I think someone’s more a shill than honest, I won’t read them anymore (see Scoble) and that’s that.

  • Ian Skerrett

    Lets face it quotes for any press release are of marginal value. The real value is to have people like you and James being able to explain the technology and market to reporters. Of course that takes time, is of value and should be compensated for. I don’t see any problem with that?

  • http://mult.ifario.us Paul Brown

    From my perspective (former vendor), it’s OK if you only cover clients and OK if you don’t, so long as you make it clear. (Doculabs and Delphi Group both got money from me once upon a time, and I felt that it was clear to their readers that we’d paid them to apply their expertise to assessing our product. They also did independent (unfunded) research, of course, to be able to present a balanced view.) It would be wrong to present a facade that says something like “This is the market” when it’s really “These are our paying customers.” Other than that, you decide how to feed your family…

  • Mike Milinkovich

    Ultimately, you guys live or die on your reputation for honesty and fairness. The world is an imperfect place, and occasionally humans need to rely on trust . Would it the world be more perfect if there was zero perceived conflicts of interest? Maybe. But real life is way more complicated than that.

    IMHO, you have only two choices: either restrict quotes to paying customers or do not give any quotes. The fact of the matter is that your time is a scarce and irreplacable resource. Money is a well-known way to throttle the demand for scarce resources. If you did not use it to restrict who you gave quotes for, you would likely be doing nothing other than giving quotes. Which would suck.

    My $0.02 worth.

    Disclosure: The Eclipse Foundation is a paying customer of RedMonk, and we may have used quotes from RedMonk in the past. I honestly don’t remember. But I’ve had both of you tell me I’m wrong enough times to truly value the occasions where you tell us we’re right :-)

  • Andi Gutmans

    I think when a vendor enters into a relationship with an analyst they expect two major things from it:
    a) Get the opportunity to get genuine feedback from an objective party who is closely watching that segment of the industry.
    b) Get time with the analyst to try and convince him on the company’s strategy. If the analyst is intrigued, he is likely to endorse the company in all sorts of situations.

    When it comes to (b), usually clients will know pretty quickly whether the analyst is intrigued or not (analysts are pretty forthcoming on that). So companies won’t actually refer press to an analyst who doesn’t seem to be very enthusiastic in the first place.

    One might think that my opinion is naive, and that analysts might intentionally provide customer’s with positive feedback in order to retain them as paying customers. I don’t think this is the case, because companies expect analysts to also share negative feedback and ideas for improving the company’s plans. I probably would not go back to a customer if

    So no matter how I look at it, I do think analysts tend to be pretty genuine with their opinions, and the fact that they have a paying relationship with a customer won’t make them say something they don’t believe in. (Of course the fact that they spent time with the customer could influence what they think but that still doesn’t mean that it isn’t a genuine opinion).

  • http://disruptivewireless.blogspot.com Dean Bubley

    I have a slightly different take on this:

    “Everyone’s entitled to my opinion”.

    I have a set of very strong opinions about how I see my sector evolving. Some of these are contrarian, some of them fit with general consensus. I want to be acknowledged as an expert on these areas, as it helps my business in various ways: more people will use me for consulting, or buy my reports. Existing clients see my quotes and are reassured – I told them the same things months earlier.

    Consequently, if being quoted in a vendor’s press release helps me to disseminate my opinion, and entrench my status as being “right” about a given topic, then I’m happy to provide a quote. Publicity is good. I’ll speak at or chair specific conferences for the same reason.

    As a result, I’m only asked for quotes by people I’m in general agreement with anyway. Some are clients, some are not. Some may become clients, as they listen to my opinions in future, and perhaps want them privately as well. And usually I will only provide a general quote which supports their proposition, rather than endorses their specific product. (clearly, it helps that much of my work is about “which technology will win”, rather than “which vendor’s widget is the best”). And sometimes I’m just too busy to help.

    As a side issue… most analysts will do (non-endorsing) paid-for keynote speeches at vendor conferences and seminars. Is this any different from a paid for PR quote in moral terms? Isn’t it just a 40-minute quote with Powerpoint?

  • http://subclock.blogspot.com/ MIke Olson

    I’m surprised there’s a debate here. You can bet that the PR firm preparing the release is on retainer to the client, and that the client’s paying the wire service for distribution. If there’s no ethical problem there, why is the analyst’s business relationship an issue?

    Redmonk publishes freely and talks to the press without apparent reservation. Clients and non-clients get coverage, as a result. Press releases are different from news reporting — they’re for-pay tools aimed at promotion and publicity. Analysts who participate should be paid for their time like everyone else.

    As long as you are honest, you ought to be able to earn an honest living.

  • http://fraxas.blogspot.com Fraxas

    I think the issue’s well-covered in the comments — the most important thing isn’t the particular policy, it’s the transparency of the policy — but I do have a point to make about Mike Milinkovich’s comment. Redmonk does live and die by its reputation for honesty, but I’m not sure it has to be fair as well as honest. Impartiality sure; fairness, no. Keep callin’em like you see’em, please, and if it’s unfair to a particular vendor that you do so, so be it.

  • http://jroller.com/page/jaimec Jaime Cardoso

    I’ve said it in James blog and, so, I’ll say it here. Over the years, my company went from an Hardware Reseller to a services company. At the time where our profits came from the hardware, we usually offered the install services now, the instalations are our biggest sources of revenue.
    I can say there was a lot of noise when we stoped the services offer. Now, every customer expects to pay for those services, …
    I can understand critics to hidden costs but, you never made a secret about how you make money so, basically, your customers have the freedom to buy services from you or not if they have any personall feelings on how you make money. Everything else is irrelevant and just plain dumb.

  • http://armadgeddon.blogspot.com/2006/02/frost-demands-cash-for-press-release.html ARonaut

    Stephen,

    You took the debate slightly off from where it started, which is not an issue :-)

    The original question in David’s blog was whether analysts could/should charge for quotes. We found the idea ridiculous and said in the post referencenced below that we’ve never seen an analyst charging for a quote in Europe:
    http://armadgeddon.blogspot.com/2006/02/ar-101-series-analysts-and-press.html

    The confusion came from as David heard that Frost & Sullivan (who anyway?) charges vendors for receiving awards. Gross still, but not quite the same thing.

    We then gave some guidelines on how vendors can leverage analysts in the media -read it here:
    http://armadgeddon.blogspot.com/2006/02/ar-101-series-analysts-and-press.html

    The bottom line is that if analysts believe in what one does, word of mouth will spread. Trying to shovel analysts quotes in journos’ throat WILL backfire AND will both the vendor and the analyst reputations.

  • http://www.joncollins.net Jon Collins

    What everyone said, with chips :-)

    An additional point – are you really saying that you would never allow your company to gain extra visibility through the request for a quote? Value isn’t always about money, I’ve sat on panels and given presentations for nothing, in teh knowledge there were spin-off benefits. All this said, I think James’s “time is money” argument is a bit spurious given the amount of effort he puts into, and information he gives out freely on his own blog!

    As I’ve said on James’s blog as well, its all about context and justification. I don’t think analysts should ever be pushing out endorsements, they shoud be pushing out analysis. This goes for quotes as much as presentations, papers, reports and so on.

  • http://analystinsight.blogspot.com David Rossiter

    Stephen, it’s good to hear you articulate Redmonk’s position so clearly and openly. Thank you.

    To clarify something in ARonaut’s comment, my interest in this had nothing to do with Frost & Sullivan and awards.

    It was sparked off by a post on Silicon Valley Watcher in which Tom said that “Gartner and IDC and Forrester analysts usually provide such quotes and they are always paid by the company issuing the press release(!)”

    And my opening standpoint was a) I had never come across this and b) if it was happening, it was wrong.

    Analyst endorsement is taken seriously in the market. When it’s not disclosed, pay for play is wrong. It can lead people to make decisions and draw conclusions that they mightn’t otherwise make.

    I do appreciate that giving quotes to clients is a slightly different matter and more open to debate. It’s been very interesting to follow the discussions on various blogs.

    I also suspect from what you and James have both said, that if Redmonk was asked by a non-client to provide a quote / act as a press reference, that you would consider it – but if (and only if) you truly believed in the company and what it was doing. If I’m wrong on that, I apologise in advance.

  • http://www.redmonk.com/sogrady stephen o’grady

    General comment: i just wanted to thank everyone for taking the time to weigh in on the issue, both pro/con. i don’t anticipate any immediate changes, but it’s great to get the benefit of external perspective.

    Danno: i take it that you’re drawing a line b/twn me and Scoble? i hope so ;)

    Ian: that’s pretty much the way that we look at it, but it’s good to hear it from you.

    Paul: i hope it was clear, but if not: we will never, ever exclude anybody from discussion simply because they are not a client. that would not only be unethical, it would make our analysis extremely low value. what we do control, rather than who we discuss, is when and how they’re discussed.

    Mike: i agree. in a perfect world, we’d be giving coverage to whoever we felt like it, but unfortunately my day seems to have less, not more, time that it used to ;)

    Andi: for the most part i think you’re correct, but unfortunately there are certainly players in our industry that act less than scrupulously. some common sense, as you articulate, from a vendor – and buyer – goes a long way.

    Dean: great point about the keynotes; i know very few analysts that don’t do that. maybe the differentiator in terms of perception is the size of the audience? still, a great point.

    Mike: hadn’t thought about the PR firm angle, but it’s a good point. we definitely feel differentiated from those folks, and that’s perhaps why i take exception to the claims here.

    Jaime: you’re absolutely right – we try to be as transparent as possible. in cases like this, it’s essential.

    ARonaut: totally agreed that force feeding journos is pointless, which is why we don’t try. we’ll talk about our experiences with the product in question, but if they want to know about competitors, that’s just fine. we’re not trying to restrict coverage in any way.

    Jon: i’m fond of saying that never is a long time, so is it accurate to say that we never do that? no, not particularly. but it depends on the value for our business. appearing on panels is, in my view, a high value opportunity for us and has resulted in biz opps – while i can’t say that we’ve ever had anything come of an appearance in a release. same with blogs; they’re high value. time is money, and we choose to spend on what we feel will benefit us either directly or indirectly.

    David: we would indeed consider it, but we make exceptions only very rarely because it’s not particularly fair to our paying clients to give away freely what they are paying for.

  • http://duckdown.blogspot.com James

    As the chief attacker of analysts in the blogosphere, I can tell you that I don’t see nothing wrong with getting paid for a quote. Of course, there are several disclaimers:

    1. Some quotes are so bad, too generic or “feel” questionable that you may loose credibility without even getting paid.

    2. Make sure it is more than just a soundbite but establishes context.

    3. You guys should also get paid to write industry whitepapers. The key is that it should be from multiple vendors. For example, if BEA asks you to write on their portal, you should tell them that you will also pursue funding from Sun, IBM and others in order to level the playing field and remove bias.

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  • The T4 Program

    I think the big problem is that people start to “expect” more and more things for free.

    Let’s say an analyst firm is asked to give a quote about marketshare/leadership in the blood glucose market space…for the quote to have any real value, it would have to have some sort of quantitative/qualitative information…which is the main value marker of a research study (the hard numbers and figures)…you can take the hard numbers out of any study and it’s practically worthless…my point is, what many people ask for is the same figures the analyust firm is trying to sell.

    If you give those facts away for free, the analyst will be out of a job.

    Unless you are asking for a generic quote that won’t really make or break your press release, you should expect to compensate the analyst in some way. The other option is to go to an unknown analyst who will give a free quote cause they need to brand their name…but again, how much is that really worth????