The ‘Information Wants to Be Free’ movement that advocated universally free-of-charge content (and at one time seemed unstoppable) has pretty much run out of steam. After a decade of havoc in the publishing industry, the counterrevolution has taken hold; paywalls have gone up and more people than ever seem accustomed to paying for content.
According to a recent report from the Online Publishers Association (OPA), 95 percent of digital content publishers now have a paid subscription strategy. In the UK, newspaper revenues grew in 2013 for the second consecutive year, up 8.7 percent in the past 24 months. This growth has been driven by continued adoption of paywall plans, now in place at more than 500 of the roughly 1,400 news dailies. Yes, of course, you can still illegally bit-torrent Game of Thrones if you want to, but the larger argument - that good content costs money to produce and is worth paying for - has largely been won by the publishers and information providers.
But ‘Information Wants to Be Free’ has always had a dual meaning. Free can mean gratis but it can also mean available, open and accessible – ‘freed’ from those who would seek to monopolize it. As one of the founding fathers of the information freedom movement Richard Stallman put it in 1990:
“I believe that all generally useful information should be free. By 'free' I am not referring to price, but rather to the freedom to copy the information and to adapt it to one's own uses... When information is generally useful, redistributing it makes humanity wealthier no matter who is distributing and no matter who is receiving.”
Accessibility and transparency of information creates efficiency, lowers costs and pushes industries forward. In addition, it almost always destroys the intermediaries that hold back its availability and benefit from its monopolization. Consider what flight and hotel booking websites did to travel agents. Observe what Airbnb is doing to the hotel industry or what Uber is doing to traditional taxi cab depots. Whenever an industry is established on an ‘agent’ having more information than its clients – a model known as ‘information asymmetry’ - that industry is ripe for disruption.
In the financial industry this trend has been at work for decades. Technology, in the form electronic trading, has increased price transparency in the equity markets; spreads – the difference between the bid and ask price – have consequently tightened and intermediaries, such as brokers, who make their livelihoods off the commission from these spreads, have suffered. For example, FINRA estimates that the number of broker-dealers fell by 10 percent between 2005 and 2010. Wherever technology drives information parity, any business that benefits from market opacity and client ignorance is destined to shrink in size or disappear altogether.
Which bring us to PR. One of the last bastions of information asymmetry is the consulting industry; in particular, the enigmatic world of media, analyst and influencer relations. PR can be an incredibly powerful tool but information asymmetry - the fact that an agency knows how to reach a particular journalist, who’s attending a conference or when an award submission is due - still accounts for too much of the client/PR agency relationship and, consequently, too large a slice of PR agency fees. The reason many buyers of PR complain that it feels more like an art than a science or write it off as “smoke and mirrors” is, as a discipline, there is simply too much inequality of information between buyer and seller. In many cases the client has no idea where to start, what’s possible, what good looks like or how results would even begin to be measured – and, of course, that suits many PR practitioners just fine. Like a latter-day travel agent sniggering at the fact his client doesn’t know the difference between Paris, France and Paris, Texas, too many PR people actually rely on information monopoly to justify their existence (and their monthly invoice), instead of creativity, relationships or results.
Of course, latter day travel agents are destined to share the same fate as actual travel agents, and technology will do to these intermediaries what it did to their forebears.
Thanks to Twitter, for example, no one needs a PR agency to tell them what a journalist is thinking. At Finsource, our clients take advantage of our social influencer tool to see which journalists and analysts are talking about which financial topics in real time.
Once identified, clients can reach out to the media directly over Twitter, which is actually how a growing number of journalists prefer to be contacted, or the old fashioned way by dropping them an email or call.
This is just one of a number of data and intelligence solutions Finsource is delivering to its clients to help them redress the information imbalance inherent in the PR industry.
For a fraction of the cost of a traditional PR retainer, Finsource is putting highly tailored PR & marketing data directly into clients’ inboxes. Some are using it to run PR programs in-house, some have already used it to lower their PR agency fees, others use the data to simply ‘keep their agencies honest.’ In all cases, information availability is shifting the balance of power from agency to client, and PR practitioners who relied on client ignorance in the past will be held more accountable in this new reality. As Warren Buffet once famously put it: “When the tide goes out, you can tell who’s been skinny dipping.”
This is not to say that the role of PR is dead; far from it. The need for practitioners with deep subject matter expertise, unparalleled industry contacts and the ability to effect real change has arguably never been greater. But it does mean that PR must win and keep their clients based on material benefits, not just smoke and mirrors.
We believe that, once information asymmetry is taken out of the equation, a client’s continued relationship with a PR agency will be based on four fundamental factors:
- Relationships – The agency has specific and genuine relationships over and above your own which cannot easily or quickly be replicated.
- Specialized knowledge – The agency knows more than you. Not just about publicly available data which may be time consuming to identify but they have demonstrable insight which takes years of application and dedication to acquire.
- Creativity – The agency brings you unique ideas or processes which you are unable to realize or create by yourself.
- Results – The agency delivers tangible and measurable results you cannot or do not have the time or resources to deliver yourself.
Ending information asymmetry in the PR industry will not destroy the practice of PR, just as the rise of travel booking sites didn’t stop people from going on vacation. The market simply found its price: ‘cheap’ for the commoditized information and functions like hotel search and selection, and ‘premium’ for the high value information and functions like luxury trip planning and specialized tours. When all client/agency relationships are based on the above criteria instead of a knowledge disparity, PR practitioners will actually become better at what they do and their clients will become happier.
Finsource was born out of frustrations with the inherent artiness of PR on the consulting side of our business. Unlike many firms, we have always believed that, far from taking the creativity out of the process, a data-driven and scientific approach to PR leaves more time for in-depth thinking and creative brainstorming. Just as marketing automation platforms have empowered marketers to focus on holding more strategic conversations with their clients and delivering more creative content, ‘PR automation’ will commoditize the mundane functions of the role, freeing practitioners to focus on what they have always purported to sell: creativity, unparalleled relationships and outstanding delivery.