Unconventional wisdom: industry analysts are not pay-to-play. Or are they?

The debate of industry analysts being pay-to-play regularly surfaces through questions around independence, desires from PR or marketing to generate owned coverage and beliefs that subscribing to research will result in a better position in an evaluation, such as the Gartner Magic Quadrant.

Those questions are a telltale sign of a deep lack of understanding of analyst firms business models and how they engage with their ecosystem. Let’s get into why industry analysts can’t be coin-operated.

Industry analysts are super-influencers –and their reputation means everything.

Industry analysts enjoy a unique but fragile position in the tech ecosystem as they engage with all sides: competing vendors in a given market, channel and technology partners and buyers –either directly, via research instruments or indirectly, via review aggregators and various other mediums.

This unique vantage point gives them privileged access to those sources, which they can then compare, contrast and analyse in their research. This is what we call information asymmetry. They then sell access to these reports as their intellectual property. This IP is their brand, and their brand is their reputation.

For analysts, independence means access.

Operating a pay-to-play model would be like an analyst selling their reputation and would result in losing access to some sides of the market. If an analyst were to sell-out and do the bidding of the vendor who pays them the most, they would lose two things that are central to their reputation: invitations to a variety of industry events and their unique vantage point that straddles vendor and client interactions. A vendor won’t invite their competitor’s cheerleader to exclusive NDA events and will likely stop engaging the analyst at all over time. A client asks for analyst input because of their unique third-party perspective, and if they no longer get that exclusive insight, the value of an analyst’s perspective significantly diminishes. Without access to vendors, an analyst becomes less relevant to end-users, which means they would lose subscribers or readers in a freemium model. Without reach to end-users, an analyst becomes useless to vendors. 

Put otherwise, if an analyst overtly favours a vendor, she would cease to be seen as independent and lose access, not only from competing vendors but also reach and trust from buyers.

Marketing consultants are not industry analysts.

The pay-to-play belief can be explained by a common misunderstanding of the difference between industry analysts and marketing consultants. This has led to several legal challenges against Gartner and its magic quadrant, all unsuccessful. HFS usefully explained how even when it comes to independent analysts, they are rarely pay-to-play but some are can be pay-to-praise, pay-to-shut-up or pay-to-attack. 

To understand the difference, it’s useful to refer back to the IIAR> Primer, Who are industry analysts and what do they do? Essentially, analyst firms have a research agenda, offer draft reviews and when accepting commissions, usually restrict themselves on industry landscapes but stop at comparing vendors.

This is not to say that marketing content creation agencies aren’t useful, they simply work differently. Some analyst firms did cross the line, for instance Aberdeen Research, but by doing so they’re no longer enjoying privileged access.

Analyst firms are two sided –and that's a good thing.

Part of this pay-to-play misunderstanding comes from this privileged access analyst firms enjoy, intermediating between technology vendors and service providers on the one hand ; their users and buyers on the other hand. Analyst firms often sell research to both sides and in addition provide go-to-market services (commissioned research, webinars and speaking engagements, advisory projects, etc.) to the sell side.

There's often a China Wall between the research and the commercial sides of the firms, for instance Gartner has an Ombudsman department whose job is mostly to protect analysts from undue vendor inference. Other firms such as Forrester or IDC clearly separate consulting from research. It does occur that some (bad) sales reps might hint buying a research subscription will result in a better research placement or coverage. Some firms such as Redmonk clearly state who their clients are like here. Even though vendors can indeed buy access, I've always found that the main benefit is not access but more that reading research is the best way to understand how analysts think about your firm to then devise a plan to tweak your positioning and address any concerns. Smaller firms don't have clear boundaries between analysts and sales, they're often the same people. But vendors abusing this to buy endorsements will devalue their investment as the analysts will be seen as their mouthpiece. Put simply, AR is not like PR and concepts like owned vs. earned are damaging to analysts brand and in the long term will ruin analysts' reputation –and thus value to vendors and users all the same.

In short, insights trump access.

Bottom line: how should technology vendors engage with industry analysts and what outcomes will they achieve?

Based on my own 20+ years of AR experience, and the collective experience from working with the tens of vendors of Starsight employees, I fundamentally believe that analysts, including Gartner and the long tail of independents, are not pay-to-play. To be so, would undermine their existence. Therefore, always remember the AR rules of engagement and be wary of any “analyst” who asks you to pay for a briefing.

Finally, you should always be outcome-driven and engage in a commercial relationship with clear objectives and well-defined deliverables –not just to grease the relationship wheel.

Final thought: there’s a long tail of influencers, each coming with a different persona and calling for a distinct engagement model.

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