Saturday, 18 February 2006

Frost demands cash for press release

In ARmadgeddon: AR 101: Analysts and press quotes
we explained that analysts don't charge for quotes. However, itis worth adding a postscript: one reader has pointed out that there's one case where vendors do pay for a press release. This is what she writes:

"I just wanted make a comment say that you have to be either green or naive to take this idea of paying for quotes seriously, or even think if could happen here in the States but not in Europe. However, a comment about Frost is on the money: they told us that we had won an award, so we said 'great'. They replied, if you want to tell people who have won, then you need to pay us for the package -- which included a trophy, a photo opp and a press release. We said, no keep the trophy: we'll just spread the news about the award ourselves. They told us that they would only anounce the award if we paid for it."

We'd love to hear about other experiences like this.

9 comments:

Vinnie Mirchandani said...

On Wall street a number of small firms pay for research reports to be written on them. The big bankers only want to cover high valuation stocks (where they make the most fees).

Vendors have multiple marketing channels. Increasingly they can use Google or Yahoo ads. If they believe an "analyst" endorsement has more marketing value, I am not sure why they complain whether someone charges for a press release or not. When you strip out the emotion, it is a business decision like any other...I can tell you from a buyer's perspective whether Gartner or ABC is quoted in a press release the impact on buying decisions is pretty small...

Anonymous said...

Vinnie is right - the impact is small - and the impact on buyers by analyst in general is much smaller than the likes of Gartner would like to admit.
But that is not what they or their rivals tell vendors.......
Anyone who has been in this business more than 10 mins know that anything endorsed by F&S, Butler, Aberdeen or Hurwitz probably sucks. But vendors for whatever reason, still cling to the illusion that an 'analyst' quote - even a pseudo 'analyst' will have an impact.

ARonaut said...

There seem to be a confusion between using a quote and leveraging an award (commercial product), or a magic quadrant (intellectual property -although one may ask whether this is an oxymoron in this case).

Again, we'll re-state that quotes are free.

This is not to say that Frost & Sullivan behaves ethically by selling its awards, but then back to Vinnie's point, if consumers may be fooled by the "best European car of the year" (attributed by rotation from a self-selecting sample), we hope to believe that enterprises are smarter when it comes to endorsement.

Anonymous said...

Wrong - F&S used to charge for quotes. Each analyst would have a list of current vendors who had contracted for this service.
When the press called you - you would look at the list and try and ensure those vendors were mentioned.
If they were an invoice was sent. This was pretty common and popular. Don't know if they do it now, but they definately did a few years ago.

ARonaut said...

Amazing. But apparently this did not them too much good as they don't seem to be either on many vendor's radar screens nor in many PR ratings....

alan pelz-sharpe said...

F&S carries a lot of weight in the Telco sector - though not IT.

But question I am left with is why the Infoweek article didn't enearth any of these going's on?

Books could be written about the practices of Butler, Aberdeen - some of their excesses have gone down in analyst lore - but Infoweek found nothing...etc

ARonaut said...

Alan,

IW's article was very shallow, did not unearth anything -see our post on the subject.

indaroom said...

Having worked with analyst firms, I know the process well. Though some firms might indulge in this practice, I know the Frost process pretty well. The award, whether a company decides to promote it or not, is free and is not charged for. In fact some amount of portal publicity is also free. Typically an analyst is spending a lot of man hours looking into various companies and analyzing best practices. That is why firms charge for the license for using their brand name to promote the recognition. That covered the cost of doing the research to determine best practices.

Press quotes are also never charged for and no...we didn't have a repeating list of companies that we plugged. Yes, there were a few companies that obviously stood out from the rest (market share leaders, highest growth rates, technology leadership) that were common knowledge and there would be some companies who would be p@#%d off because they didn't get the recognition.

MK Ultra said...

Frost doesn't sell awards. Unlike groups like Gartner or Red Herring, Frost's awards are actually backed by primary research and validated by the market.

If you leverage one of their awards, you are basically using their research. As stated in a post above, analyst time is not free and to do something like this takes quite a number of man hours.

Its pretty ignorant for anyone to expect to be given free use of their research, free analyst time, or even free ability to leverage their brand name.

I looked up their program and they seem to get quite good coverage across many industry sectors.