Oct

24

Processing PR into a New Age

Filed Under B2B, Big Data, Blog, data analytics, Industry Analysis, internet, news media, online advertising, Search, social media, Uncategorized, Workflow | Leave a Comment

There is, to the really ardent enthusiast, a sort of poetry about a sequence of acquisition deals in a sector which results in the emergence of a company large enough and technically adroit enough to challenge not just the pre-existing market leaders but the way in which business is done by practitioners in the sector. The announcement this week of the purchase of Gorkana (formerly Durrants) by Cision, now enhanced by Vocus, gives me a frisson of this feeling. From the dawn of the great age of newspapers in the 1880s, getting things into them and measuring the results became a business in its own right, nowadays abbreviated to “PR”. There is, of course, a lot more to it than that, and the things placed could range from advertising to editorial briefing, and more media opportunities widened the scope, but in 1880 PR was hunch and artistry. When William Durrant and Henry Romeike formed their press clippings agency in that year and named it after the former (Romeike seceded to form his own) the measurement was needed to demonstrate, and no doubt sometimes defend, the campaign strategy. Today, as we know well from other sectors, the ability to measure, and then analyse, can easily become more important than the inspired hunch. While the latter lives on in the industry legend, planning an effective launch campaign is increasingly a desktop activity in the marketing department which once employed those wizard PR consultants. Automating workflow, introducing unprecedented levels of accuracy and comparability, adding software tools from predictive data analysis through to automated campaign booking tools, and we have a revolution in process. And it came not from the PR industry itself, but from its ancillary, mechanical component, the clippings agency. If we look at many other industries entering the digital age, this is very often the case.

But between 1880 and 2000, very little happened. In that year August Capital acquired Discovery Group, which contained Durrants,for £14m in an MBI and installed a strong team of ex-Thomson executives led by Steve White. I can recall my own initial visit, in what is now London’s white hot high tech Shoreditch, and seeing the long desks of clippers with their shears and piles of newspapers. Did they seek consultancy, I wondered, or the Last Rites? And then very quickly came the idea that if all of that clipping could be automated and made searchable very great things could be accomplished. I know less of the history of Cision (once Sweden’s Observer Group, who sold Romeike’s agency, ironically, back to Durrants in the post MBI period), but I suspect that they followed a similar trajectory. Under the CEO, Peter Granat, who has brought first Cision and then, earlier this year, Vocus, together in deals funded by the Chicago private equity player, GTCR, they have created a powerful technology base in the US in parallel to the UK development at Durrants. August Capital sold on to the British PE player Exponent, which enabled an acquisition programme which included buying aligned software players Metrica and Gorkana, and the renaming of the company after the latter. Exponent’s exit at £253m (according to MergerMarket – others say rather less) demonstrates the value added through these activities and looks to me like a X12 multiple at least.

So here is a very satisfying story for those of us who still believe in Progress. Three private equity houses have brought in appropriate technology and management, and at each stage have made acquisitions that added value. Bringing all three together in Chicago could well be transformative for the new group, and for the global industry within which they are embedded. Over time usage will move out of PR agencies and into end user corporate marketing, a vastly larger marketplace. As this begins to happen, so will GTCR be able to leverage its position and get the right exit price. I do not imagine that the major advertising and PR agencies will allow this process automation without an attempt to own it. WPP, through its Kantar data unit, already bought Precise Information as a way of testing the waters. WPP’s major competitors have aligned interests. How often have we seen this in the networked world? You own a very profitable media franchise. This becomes threatened by digital transformation. So you are forced to buy one of the disrupters. Then the legacy business declines. Then you can enjoy life again as the proprietor of a much smaller and slightly less printable business.

The story of Gorkana, however, is a good one. And the final credit should rest where it so seldom does, with the management. Steve White and his initial 2000 team and their successors were able to see where users wanted to be, as well as grasping the impact of transformative technology. While they had to contend with both the active and passive resistance of some of the players in the process (for instance, newspaper management were deeply suspicious of any attempt to database their content, for whatever purpose), they completely changed the mechanics and analytical output of an activity which had hardly changed during the previous 120 years. Reflect that while this work was going on the dimensions of media monitoring were widening all the time, and including web presence and then social media analysis. And reflect as well that the management of these companies started without a content-based intellectual property valuation – they owned none of the content that they analysed. In the information industry in particular it is important that we remember what people accomplish, as well as software.

Sep

7

Milking the Disintermediators

Filed Under B2B, Big Data, Blog, data analytics, Financial services, healthcare, Industry Analysis, internet, mobile content, Publishing, Reed Elsevier, semantic web, STM, Thomson, Uncategorized, Workflow | Leave a Comment

Remember those days when intermediary businesses in information markets were going to be taken out of the loop by savvy operators who could increase margins by collapsing processes in the service cycle? In the far-off nineties, before bookshops had disappeared and while libraries were still functioning as they had for the previous century, this disintermediation stuff was really hot. We spoke of “disintermediating the disintermediators”, and even “re-intermediation” – well, I did at least, and I rather hoped that you might have nodded off through some of this, since it is all changing again now, and in ways that demonstrate that we were not always entirely right in our prognostications. No, let me rephrase that – I was more often wrong about this than I am now comfortable about admitting.

There are many reasons for this but the most obvious is the most painful – pure failure of imagination. I convict myself of the crime for which I have so often harangued others. A simple failure to remember that when one relationship in a chain changes, it changes everything else in the chain. A month of illness and recuperation and holidays has given time to catch up on a backlog of reading – and thinking. And reminded me to remember my roots. As a farmer’s son in the Cotswolds, the bane of our lives on small farms was the regimented slavery of milking cows at 6am and 4pm. Now that slavery is abolished, as avid followers of the UK radio soap The Archers will be aware (North Americans can start here: http://www.cbc.ca/news/canada/new-brunswick/robot-milkers-gaining-in-popularity-at-dairy-farms-in-n-b-1.2756987). Think through these changes in terms of the chain relationship idea, and we end up in a discussion about the future of farmers and the way we organize access to and curation of the land in our society.

So what we have to discuss is whether, in information, and often entertainment, markets our intermediate role is worth saving. Whether we call ourselves publishers, or information service solution vendors, matters not a whit. Do we do enough to stay in the loop as other relationships change in our client base, and other players threaten to subvert our value by combining it with theirs? When as a law publisher online I crowed that I had “captured” the user desktop all I was actually saying was that I had beaten the law firm’s library budget to a pulp. Very many law firms don’t have librarians any more, but, in recession, many have found that more and more legal process can be outsourced in commercial law. And, as I have noted here before, as outsourcers like Obelisk (www.obelisksupport.com/) band together the unemployed lawyers to provide a service base to re-align where the work is actually done, and outsourcers to corporate counsel like Axiom (www.axiomlaw.com) replace much of the service value that private law firms once offered to corporate customers, the tectonic plates are moving in that most conservative world of law, just as re-regulation after recession is creating a new marketplace around risk management and compliance. So, take the most conservative of professions, with highly protective union rules around membership and practice, which you would think would entomb change through mummified procedure – and even here we can see real evidence that within comparatively short periods of time, far-reaching change is massively afoot.

Then look at the organization of medicine, and medical advice. Or PR, and the ability of marketing department analytics to subvert much of the value of the PR businesses. Or insurance. Or construction and BIM, and planning processes. Or engineering design. Or property transactions. Or almost any field in the world of work or transactions that you can imagine. From the taxi drivers who resent Uber to the private drivers who park with RingGo, these changes in relationships are live on the streets of London today, yet we still take each change as a piecemeal development and not as a link in a fundamental shift. And we are very good at describing over-arching movement, but not at all good on detecting what those movements may mean on the ground. If you are still reading in the next few months I shall want to write about the Internet of Things, about M2M, about “Big” metadata, about ubiquitous computing, about semantic analysis, about additive manufacturing, about open and linked data etc etc. But I am now more determined than ever to describe those things in the clothing of work and business as it is now.

So what is the Future of Law Publishers , in the sense that I have used them as an example in this piece? Well, I think that the logic of what I have been looking at this month implies that they themselves will be dis-intermediated. Clearly the small players will successfully cope with the diminishing ranks or practitioners who want texts in some form or other, until that small market becomes a self-publishing function. I can imagine that the large players, like Thomson-Reuters, Lexis or Bloomberg BNA, will be able to migrate through acquisition into the workflow outsourcing business. Their data is becoming highly commoditized, and they have too little expertise to allow them to customize. So I see them as becoming service bureau, providing cloud-based services either to their former clients, or to their client’s clients. The decisions they make for their clients will be insurable and a good number of their employees will be legally qualified. Gradually, in some service areas, it will be hard to tell them apart from law firms. And that is a prevalent conclusion from research in these areas – only our physical, non-networked world could have sustained these separate service functions in the value chain. Put them all in the same virtual network, and inexorably they mutate into one solution. Before the summer break, I wrote about this here under the title “If its a Service, Outsource it…“. Reviewing that piece I now realize that we are seeing the first stages of a much more fundamental re-alignment. And it cannot be postponed or delayed because media and information corporations so wish it.

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