Trust me, I’m an analyst

29Jul09

Guest post by Jonathan Hargreaves – MD of European Technology Practice, Edelman (@naked_pheasant) – also posted on the wonderful Naked Pheasant blog

One of the great sports of recent times has been to make fun of Jonny Bentwood and his passion for industry analyst relations.  In fact analysts have always been easy if not fair game, after all it’s their job to forecast the future and give people advice on serious amounts of money and why they should spend it in a certain way.  Clearly a profession that is asking for a ribbing and one that it got in the fall out from the dotcom forecasts.  So in a world where as we know Trust in experts is in precipitous decline who would be bold enough to stand up as such an expert?

Well fortunately for the technology industry many very smart people are happy to don the domed forehead of industry analyst-dom. 

However, even though they pertain to be font of all knowledge when it comes to IT – they have tough times ahead. In a similar manner in which media has witnessed a battle to keep its market with the growth of easily available content on the web, analysts have also had to adapt or die.  In this battle where their IP is what they have to sell, they have had to face three distinct challenges:

  • How to make their content better than what is freely available on the web.
    Solved by adding unique value by deep knowledge of market trends and being truly independent.
  • How to become more visible in a noisy and crowded environment so their voice and opinion can be heard and consulted on.
    Solved by an aggressive adoption of social media to increase their share of voice in technology conversations
  • How to tackle in enterprises the reduction of discretionary spend in this tough economic climate.
    Solved by adapting their business models to provide more tactical solutions with clear metrics as oppose to generic forecasts and strategy.

Despite these challenges, the analyst market is robust and remains strong.

One intuitive explanation for this growth is that as technology becomes ever more pervasive then the need for brain boxes to analyse its use and role grows accordingly.  However, there is another explanation that can be found in the Trust Barometer and that is that Industry and Financial analysts have been one of the expert groups to retain trust as a credible source of information.  In caparison the trust in CEO’s fell to only  29% last year.  The only other group to hold its head above water were academics.

This is all fine but it does leave the question as to what analyst have done to earn this trust ‘privilege’ after all they have not always been seen as independent to man (or woman).   In search of some insight I spoke to the martyr of the cause Mr Bentwood himself.

Clearly that’s just one man’s view but I would love to hear other thoughts as to why industry analysts have this trust privilege and indeed do they deserve it? 



2 Responses to “Trust me, I’m an analyst”

  1. I know analyst colleagues that are “brain boxes”–excellent strategists, with the uncanny expertise to develop disruptive IP. These are the analysts with media-ready sound bites. These are the analysts from which vendor PR seeks press release quotes. This is the stuff by which “brain boxes” earn accreditation and, by inference, trust. The vendor client seeks the very public, trust-through-inference analyst.

    Other analysts earn trust by developing the strategic IP–and make it tactically implementation. They are the less flashy “brain boxes.” Trust is built with the enterprise client through a combination of interactions–through telephone or F2F inquiries and research reports. Word-of-mouth plays a predominant role in building enterprise-client trust.

    As social media reshapes the foundation upon which both types of trust are built, affinity communities will have more information by which to re-evaluate trust.

    “Industry analysts have this trust privilege and indeed do they deserve it?” Today, it depends. As I type this, communication models are changing, inherently based on communities of trust. Analyst and analyst firm viability will directly relate to the degree to which they “get it.”

  2. Apart from the talents of individual analysts, a lot of the trust is still a “hand me down” from the main stream media and their positions within it – quoting on news, etc…

    This trust has yet to be broken as unlike other sectors, the technology sector has performed well since the dot com bubble and has proved it’s viability and sustainability even when other sectors have declined massively.

    If the tech sector declines against the run of advice given by analysts, the we will see the trust factor diminished.


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