L.A. Firm Feels Pressed on Releases

0
L.A. Firm Feels Pressed on Releases
Marketwire’s El Segundo office.

Marketwire is in an odd position. Its chief executive claims the company is notching double-digit growth. But at the same time, he sees the future and it doesn’t look good. He feels an urgency to change the way the company does business.

The world of communications is changing so fast that the company, with dual headquarters in El Segundo and Toronto, must adapt or face obsolescence. Marketwire can’t survive with its current business model – sending out press releases announcing company news, including new products, hirings and promotions, and financial results.

So to keep up, the company has purchased an Internet monitoring firm that will tell customers how bloggers and social networking sites react to their announcements. And the company is prepared to make additional technology acquisitions going forward.

For now, Marketwire is one of the largest players in press release distribution. Its 13,000 customers range from corporate giants like Cisco and VeriSign to small businesses, non-profits and government agencies.

But even though Marketwire’s revenue is growing 20 percent to 30 percent per year, Chief Executive Michael Nowlan doesn’t expect the good times to last much longer.

“Distribution is no longer sufficient because marketers need to know what happens to their message once it reaches the audience,” he said. “That’s why we have embarked on an aggressive investment program to add more than press releases to our portfolio.”

To do so, Marketwire acquired Sysomos, a Toronto firm that monitors social networking sites and blogs to measure the popularity of companies and brands. That purchase was announced in July.

Marketwire gets its news releases from client companies and distributes them online. With Sysomos, the company plans to add feedback and analysis of any message’s reception on social networks and similar websites.

Sysomos’ technology scans the text on blogs, Twitter accounts, Facebook, LinkedIn and other social networking sites, searching for keywords such as the name of a company or a new product.

Analysis of the results shows the number of times the keywords were mentioned, as well as the sentiment or tone of the comment based on the keywords’ proximity to other words with negative or positive connotations.

To illustrate the process, Nowlan cited the way Marketwire publicized its acquisition of Sysomos. Marketwire distributed a massive press release with more than 2,100 words, statements from both chief executives, links to three videos, company time lines and quotes from prominent bloggers. Later analysis showed that this deluge of information confused some people.

“When we monitored the feedback, people were saying, ‘What? Is Marketwire getting out of the press release business?’” Nowlan recalled. “We had to clarify our position and describe where we are heading in the future.”

Marketwire used its sales force to reassure customers that it wasn’t dropping its press release business, only adding to it.

Nowlan’s strategy is to package the regular Marketwire distribution service with the Sysomos analysis. The package will roll out gradually over the next 18 months, with the first major component set to launch next month.

As for price, customers pay $500 on average for Marketwire to distribute a single press release, although that can rise to several thousand dollars for special features such as translations, video or complex graphics. Sysomos is sold by subscription with prices starting at $6,000 a year, soaring into the hundreds of thousands of dollars for detailed analysis and feedback reports.

“Customers are willing to pay for something that makes communication more effective and simpler to do,” Nowlan explained. “Quite honestly, selling the integrated suite is what makes sense for us.”

Richard Laermer, chief executive of New York-based RLM Public Relations and author of the book “Full Frontal PR,” believes Marketwire is in a race to change its services before its traditional business model dies.

Paid wire services, such as Marketwire and its biggest competitors, PR Newswire and Business Wire, have thrived because federal regulations require that public companies release financial news to all investors simultaneously, so they used press release services for distribution. But aside from that legal requirement, Laermer thinks press releases have become irrelevant because a company can post such information on its website. Not even metrics and feedback will save the press release services.

“Marketwire’s monitoring service is interesting, but it’s irrelevant if people don’t care about the press release,” he said.

Laermer said in the future, public companies will continue to use paid wire services as required by law, but Marketwire may lose some of that business to its larger competitors, PR Newswire and Business Wire.

But Nowlan is confident and “looking at a tremendous growth in our core business of distributing information.” He expects the Sysomos acquisition will further accelerate growth.

Joe Ewaskiw, public relations manager at Internet Brands, a publicly traded company in El Segundo, is one Marketwire customer that plans to buy the Sysomos service.

“Wire service providers are almost out of date,” he said. “What stands out about Marketwire is they are aware of that reality. Sysomos was a smart acquisition for them and a very valuable service to track what happens to a brand in real time. For a marketer and PR professional, it really helps.”

Today’s Marketwire was formed in 2006 when CCNMatthews, which distributed press releases in Canada, bought Marketwire to get into the U.S. market. The strategy was to offer coverage for all of North America.

The company’s Toronto office handles administrative, financial and technical functions, while El Segundo is the main editorial and marketing office. About 50 employees work in El Segundo, and an additional 250 are in Toronto, Chicago, Dallas and other locations across the continent.

The private company is majority owned by Omers Private Equity, a Toronto-based fund that manages $4 billon for Canadian pension funds.

Nowlan anticipates increasing his payroll to 450 people in the next three years, with an even greater proportional increase in revenue.

He also expects to buy other companies with technology that can improve Marketwire’s business.

“When you see a business skill that you need, you can build it, buy it or partner with someone else,” he said. “If it’s a core capability, we are going to buy it. That’s what Sysomos represented and we will continue to do that.”

No posts to display