What content is good enough to pay for?

October 31, 2008 12:01 PM

What kinds of content do companies pay for?

I'm fascinated by the Forrester Research business model - they seem to make tons of money, selling 8-10 page reports for $200-300 each. And they publish a bunch of them, every week.

But with so much content and research freely available, what is it that companies value highly enough to pay for? Is it the charts/graphs/stats, or is it opinion, or original research, or some other thing?

I'm not looking for topic ideas here, I'm just trying to get my head around what type of content is purchased most often and why.

posted by jbickers to computers & internet (10 comments total)

I think it's not specifically the content. It's the quality, and the reliability, and in particular the reputation.
posted by Class Goat at 12:17 PM on October 31, 2008

The stuff that I've seen in my professional area are things that have statistics that help people sell their stuff. So if you can say "30% of cell phone users have XYZ brand phones and 15% of them use them for MP3 downloads" you can use that information to leverage someone to start using your MP3 delivery service or whatever the hell. Oftentimes these reports are just either some sort of polling, or some sort of statistical number crunching [often combining census type things with other possibly proprietary information] and then selling them to businesses who can use them to create business plans, marketing plans, advertising plans or justifications for these things with people who really care about numbers.

The other category that I've seen used a lot os basically reportst hat take HUGE amounts of data and then compress them down to salient points with some decent, trusted analysis. So it's not just having the data presented well, it's having it explained to you by people who you can depend on to either not slant it much or put the slant on it that you are looking for, if that makes sense.
posted by jessamyn at 12:33 PM on October 31, 2008 [1 favorite has favorites]

You're paying for the providence and the cost of putting all of that together. Compared to the internet full of wacky and dubious information you're paying a relatively small amount of money to get well researched backed by the company's reputation.

But the company got that reputation from spending all of that money on professional survey writers (PhDs), consultants, well trained poll takes, proofreaders, etc, and the infrastructure to support it. I would doubt if their margins are that big. Not that many people buy each one (a few big media outlets and related companies) and most of the information is time sensitive so they'll probably not have any interest in buying something 6 months old.
posted by Ookseer at 12:41 PM on October 31, 2008

Credibility.
posted by rhizome at 12:51 PM on October 31, 2008

At least in security, part of it is (the appearance of) risk management. If you pick what Forrester or Gartner says is the industry leader in encryption/access control/etc and something goes wrong, you can make the argument that you took reasonably diligent steps to protect your data.
posted by djb at 12:59 PM on October 31, 2008

I suspect that many of these studies and whitepapers serve the three symbiotic purposes from the Forresters of the world's perspective:

-make some cash
-enforce their credibility and authority
-generate leads for more lucrative consulting gigs

And I think companies buy the reports if to supplement their own whitepapers and sales materials which they in turn use to help generate leads. If you sell something with gigantic margins like "enterprise applicant tracking systems", the report is worth the cost and then some.

Check out one of Gartner's ingenious "Magic Quadrant" graphs which is designed to make many products seem good in different ways.
posted by ejoey at 1:05 PM on October 31, 2008

A big part of it is that they are a trusted source of information, and provide one-stop shopping.

Also, these analysts don't just write research reports, they also offer other services. Big companies will often pay for some sort of subscription bundle, that might provide X number of employees with direct access to all the reports in one or more categories (with the ability to share those reports more widely), as well as some number of hours of analyst time for custom research, or just to pick their brain.

Sometimes overlooked is that Forrester and their ilk also have a lot in common with consulting firms as "infomediaries."

Clients provide the infomediary with visibility into their inner workings as part of the trade for getting advice on how to improve something or other. That advice is valuable because it is informed by the infomediaries role in observing and providing advice on the inner workings of other clients.

This works a few different ways. Sometimes a client wants perspective on what they could be doing better. Other times a client might want to understand the needs of potential customers. So, for example, Nordstrom may be looking to cut the costs of running their email and scheduling system. They pay Forrester to learn that some of Forrester's clients have cut 50% off their licensing and operations costs for email and calendering via server consolidation. Forrester can offer related insights to, say, Google, who wants to understand what it would take to get companies like Nordstrom to switch to Google Apps for your Domain for email and calendering. This can come full circle when Forrester hooks a client up with Google for a trial deployment, and then later sells a report to even more clients on how to evaluate whether to switch to Google Apps for your messaging infrastructure.

They soak up information wherever they can get it, and then slice, dice, and package it as many ways as they can. I was on a few conference calls with Gartner & Forrester analysts and often it was clear that they were trying to figure out why it was that we were asking the questions we were. Also, when reading reports, you'll see content from one report repurposed for the section of another.
posted by Good Brain at 1:17 PM on October 31, 2008 [1 favorite has favorites]

I think some of the above posters missed the most important part of these reports which is forecasting. Research and due diligence is well and good but it needs to be supplemented with some forecasting otherwise you're just reading a business case study. The background information is just a setup so that the reader knows that you did your homework and that you're reasonably qualified to provide an opinion.

So given the current financial conditions, opportunities, threats, and other externalities, what can we expect in the future? You need to project market size, industry growth rate, revenue growth, earnings per share at a future quarter, share price at a future quarter, or some other type of actionable metric. Because at the end of the day, no one is paying that type of money to read about what they already know, they're paying for your distilled knowledge and advice about what to do against uncertainty. A good report answers business questions related to decisions to be made:

- Is this company's stock undervalued?
- Do we want to enter this market at this time?
- How are our potential competitors in this market doing?
posted by junesix at 3:43 PM on October 31, 2008

I think that the value is pretty ephemeral, mostly in the brand alone - these analysts are big enough names that executives figure they can't get fired for making decisions based on their advice.

As far as the actual information in these reports, what I've seen on my own industry has been utterly inaccurate and often completely out of date - Wikipedia is often better. Gartner's "Magic Quadrant" thing is brilliant as a branding tool but dumb as an actual way to think about things: it's super-over-simplification employing axiomatic statements to appear authoritative, like tarot or alchemy or something.
posted by XMLicious at 5:56 PM on October 31, 2008 [1 favorite has favorites]

I just wanted to say that I think all of these responses combine to be an excellent answer.
posted by ejoey at 10:25 AM on November 1, 2008