Blog 8 minute read
Ben Smith, Founder, PRmoment.com
I recently interviewed Cision global CEO Kevin Akeroyd. We rarely interview vendor CEOs, but Cision is an interesting case. Why? Very simple – Cision, or rather GTCR, the private equity fund backing it, has spent $2 billion dollars on buying PR/communications point solutions across data, content and measurement.
Yes that’s right, that’s not a typo, I did say two billion dollars. That’s massively more than anyone else has ever spent on PR/comms tools – ever. By a huge margin.
I’ve worked around the PR vendor market for about 10 years, I don’t pretend to be the world’s leading expert on it, but I get it, I understand it.
And what I’ve never quite got my head around is why Cision spent quite so much money in this market; in the end presumably GTCR will want to make a profit on any exit. So I was looking forward to catching up with Kevin. It’s a long read but it’s an interesting perspective on:
- Why Cision has spent so much
- The role cloud technology has played in changing the advertising, paid content and marketing sectors
- The simple reason why PR budgets have not increased at the same rate as paid media budgets, despite the depreciating returns in the advertising sector
Ben Smith: So what made you leave Oracle for Cision?
Kevin Akeroyd: I’ve done this playbook twice at Salesforce.com and then at Data.com where we took a bunch of point solutions and created an integrated solution.
It’s like this [Kevin picks up his phone], I used to have to carry a watch, a flash light, a phone, an internet browser, an alarm clock, a phone and pager. I used to have seven devices. Now I have one device that does it all. It’s less technology, better narrated, that does more.
Software is bought the exact same way. The buyer does not want to buy six different solutions from six different vendors, they want to buy one integrated thing that does it all for them.
This market trend has hit consumer devices, it’s hit finance, it’s hit HCR (Health Care Reform), it’s hit HR, it’s hit marketing and advertising. The communications business, our world, is the last line of business where this cloud platform transformation has not hit yet. This is comms playing catch up.
Having done this a couple of times, putting six different point solutions together, if you can become that cloud enabler – the transformation for that line of business is profound.
I watched it happen in paid media and owned media, I was at one of the big three players that did it, so when I had the opportunity to bring that data, tech, measurement and cloud platform to this line of business – what an unbelievable opportunity.
Does that imply a lot of integration? Of course it does. You’ve got a whole load of point solutions not necessarily at scale, not global and you’ve got to turn all of that into one integrated platform.
BS: What are the challenges of doing that? The PR world globally is a spectrum of buyers at different stages isn’t it? So is it possible to have a global solution? I’m not saying it’s not doable, but it must be more challenging?
KA: It is more challenging, but we’ve got paying customers in over 100 countries. So, for example, we work hyperlocal in country number 99. You must be able to do that. And if you want to work with the enterprise, you need to work globally. They don’t want to work with four vendors in the UK, six in the US, three more in Tokyo, etc. So if you can be that global platform that allows for the specialisation whether it is for a line of business or in a country – that is how the enterprise wants to buy.
So for both the low end of the market, small companies in country, and the high end of the market, at an enterprise level your customers can use your product globally and fine tune locally. That is really important. And I think that’s similar in most business categories.
BS: Within Cision’s offer there is a lot of Service as Software (SaaS) but there is also quite a lot of consultancy. Is there a tension there?
KA: No I don’t think so. I think of things in four rings. There is a core technology. That’s the first circle. Then the next concentric circle consists of best practice, implementation, adaptation, workflow, training, adoption. A whole bunch of things that you typically find the software vendor provides.
And then there is a third circle – where Deloitte, Edelman, Publicis and lots of other companies exist. It’s a huge circle. A lot of advisory services - which exist as a halo around the tech platform.
And you’ve also got a small circle that is about dye-in-the-wool best practices because you can’t just hand someone the keys to a shiny new platform without showing them how it’s going to work.
There are those four business-type rings in every software category and PR/comms looks like every other software category.
BS: To make sure I’ve got that right – in that small ring, you see part of that being Cision’s services, but also potentially other evaluation/measurement consultancies?
KA: Yes that’s right. You still need that expert telling you how to use the software and what business decision you should make based in what the software is telling you.
BS: How do you reckon PR is doing on the use of data and technology?
KA: PR lags dramatically. And PR and communications knows it.
BS: In what sense?
KA: Data, tech and measurement. That’s what these cloud platforms are. For example, if a cosmetic brand were to do a paid media product launch in Europe it would segment its market by audiences and it knows it needs to talk differently to those audiences by different creative, different content, different voice, different authors. It will do 30/40 versions of the paid advertising – display, search, social. Data driven. Outbound emails, SMS. Everything is data driven.
Even on owned media, when different audiences show up on a website, they will get completely different experience in real time compared to another audience segment. So it uses data to personalise and make more relevant its tone and merchandise in paid, commerce and owned literally 24/7 in every corner of the company.
What do I do in PR and comms? One version to the entire world. It’s not segmented, it’s not contextual, and it’s not direct. You’re pitching to influencers generically. You’re spam. They get 30,000 inbounds a year. So you’re not reaching the right influencers, you’re not getting anything relevant to them, you’re not getting good coverage and if you do, the relevance to the audience you’re trying to reach is muted.
So this is about the simple notion of bringing data, to segment audiences and communicate with them via influencers the way you can do in owned, commerce and paid media.
Even if I just stop right there – PR has got 10 years to catch up. It is just not using the basic, the very basic fundamental data techniques. That’s number one.
Number two, it has not gone through the same tech automation evolution. It is still using different point solutions for its database, for its social listening, its media monitoring, its distribution, its analytics…
It is being woefully inefficient compared to its counterparts in paid and owned.
BS: So in paid and owned what are the go-to products?
KA: The big cloud providers are Adobe Marketing Could, Oracle Marketing Cloud, Salesforce Marketing Cloud and IBM Marketing Cloud.
BS: So all the niche guys have either been bought or fallen by the wayside?
KA: They haven’t all gone extinct, but $4bn in spend has, in four years, gone from point solutions to one of those four cloud solutions in marketing. And that tells you the customer wants to buy it that way.
And the communications professional has the exact same challenges that the owned media and paid media guys do.
Measurement is also important in this. PR/comms is still using share of voice, ad value equivalent, and theoretical reach.
PR/comms people do not walk into the CFO’s office saying I know I reached this many million, I know this many engaged, I know exactly who they were, I know how many of them converted.
PR still deals in PR vanity metrics, whereas paid and owned show up with hard numbers, hard conversion rates and hard revenue impact. So where paid and owned are viewed as a direct investment in revenue, comms is still an operating expense (Opex.) Its strategic Opex, its important Opex but it’s not attributed business value.
That’s why a big global company has a $2.5 billion ad/paid media budget and a $200 million comms budget. It’s all about that lack of measurability.
When PR and earned media start showing hard revenue metrics and attribution, the way paid and owned do, a lot of the money that wants to flow into earned and comms will. And that’s what Cision’s ID is all about.
BS: And what is the biggest challenge for you?
KA: Our biggest challenge is convincing the communicator that 50 years of not using data is no longer a good idea. The tech is here, it’s now about adoption.