Today, Spend Matters would like to introduce BIQ's Eric Strovink, who will share his thoughts on how bloggers and analysts are beginning to collide. As he terms it, it's all about understanding the differences between "Analyst 1.0" and "Analyst 2.0". Welcome, Eric!
It's been obvious for a while that the analyst landscape is changing. The blogosphere has become a strong influencer as well as a useful information source. These days some bloggers really deserve to be called "analysts." They are, in fact, the vanguard of an Analyst 2.0 revolution. But is this all good?
The Analyst 1.0 model has been with us for years: an analysis firm performs "research," and clients purchase the right to access the research. Various other "products" are tacked on, such as the right to meet with the analyst one-on-one. For vendors, add-ons include the right to produce collateral materials that contain statements from the analyst and also contain the analyst firm's logo, the right to produce webcasts with the analyst, the right to have the analyst show up at your user conference, and so on.
From the vendor's point of view, meetings with the analyst are viewed as an opportunity to influence the analyst's thinking. The idea is that even if the analyst is lukewarm about your product, given enough face time with a particular point of view, the analyst will feel compelled to give that point of view at least some air time in his/her research reports and recommendations.
Associated with each analyst is an electron cloud of "sales reps." My company has been pitched by three different analyst firms, and the pitch from the sales rep is always the same: "If you don't have access to our analyst, the analyst won't know about you, so s/he won't be able to recommend you to our huge client base." In other words, if you don't pay, we won't recommend you. I know that the analysts don't necessarily agree with that point of view, but they are insulated from the sales types, who are rather unequivocal in their representations.
This is not an ideal model, but there are at least some checks and balances. Most large vendors buy time with most of the analysts, so it's not possible for any one large vendor to totally dominate the discussion or the face time. Analysts must be careful what they say so as not to annoy paying clients, so this tempers the discussion and curtails speculation and unsupportable points of view. The reputation of the analysis firm rests on good editorial control of analysts' reports, so there is at least some level of review within the firm before a report is published. This certainly locks out the small vendors, but analysts generally don't bother with small vendors anyway.
There are very few constraints on bloggers. When bloggers commit factual errors (as is common in some of the hardware blogs), severe market damage can be done. Unfortunately, these mistakes seem to be quickly forgotten by the audience ("15 minutes of fame" is paralleled by "15 minutes of infamy"). When a blogger makes a mistake, there is typically no impact on Alexa ratings or page rank. To their credit, most bloggers tend to be conscientious about issuing corrections and initiating useful discussions, but as a practical matter there is no real accountability and no editorial oversight.
When a blogger is elevated by the market to Analyst 2.0 status, the game changes. This elevation can occur by virtue of the quality and quantity of the blogger's work, or by the effectiveness of his marketing, or just by random chance, such as being the first but not necessarily the best in a particular space (such as TechCrunch).
Confounding this is the "sponsorship" model for blogs, which starts to bleed into Analyst 1.0 territory. What do sponsors receive from the blogger in return for their sponsorship? Presumably some attention that they wouldn't otherwise receive, perhaps attendance at their conference, perhaps face-to-face meetings or consulting services. The problem is that Analyst 2.0 doesn't have the infrastructure of Analyst 1.0. He can't have an unlimited list of sponsors, because he doesn't have the bandwidth to support them. So, unlike Analyst 1.0, he must go out of his way to ensure that he meets with competitors to his sponsors, and to ensure that he is even-handed in his postings.
The good news is that we are fortunate, in this space at least, to have a group of bloggers who are very seriously interested in providing an independent point of view, such as Michael Lamoureux and Jon Hansen. Even the "vendor bloggers" such as Dave Bush have done a good job of providing vendor-neutral content. However, I wonder how long this can last, and whether the current high level of discourse can be maintained in the Analyst 2.0 world. In my view, it is only a matter of time before the power of the Analyst 2.0 increases to the point where serious friction arises between bloggers and vendors. We have already seen some indications of this friction right here on Spend Matters, and I suspect we will see more.
Spend Matters would like to thank BIQ's Eric Strovink for his contribution.