Lee Gomes wrote an interesting article(sorry, subscription required) in the Wall Street Journal’s Portals column about a subject that has been bothering me for a while.  I’m glad to see that he’s covered both sides of the story regarding the Aberdeen Group’s business practices.

‘There were many excesses during the Internet bubble; one involved the Aberdeen Group, which passed itself off as a technology consulting and research operation, but which was for the most part a “pay-for-praise” operation. If you saw an Aberdeen report saying that Acme MicroMacro sold world-class solutions, you could be sure that Acme had written Aberdeen a world-class check.

Times have changed. Harte-Hanks, which bought Aberdeen in 2006, ended the practice. There is a new Aberdeen, with a new business model, one that it calls “sponsored research.”‘

Well, OK, they can call it “sponsored research”, but it still feels very much like “pay to play” - at least to me.

“The current Aberdeen comes up with a research topic, typically involving some new technology trend, and then approaches tech companies selling products associated with the trend. For what customers say is roughly $30,000 a company can become a report sponsor. Aberdeen, which wouldn’t discuss its fee, then sends questionnaires to tech users, asking about their current activities and future plans for the area in question. The reports are meant to be a snapshot of the marketplace and don’t mention specific companies.”

These guys hit me up last year to provide background to one of their analysts for a report on China outsourcing.  I did the pre-work, then set aside the time to talk with the fellow.  Imagine my surprise when an account manager / pushy sales guy sat in on the call with the analyst and then tried repeatedly to pressure me into sponsoring the report.  He even used the scarcity ploy, “Well, I’ve only got four slots, two are already committed and three of your competitors are interested in the final two…”  He went so far as to name the competitors.

“The sponsors’ funding is fully disclosed. Sponsors have their logos on the report’s front page and are passed along with the contact information of everyone who downloads it.”

OK, but I was given the distinct impression that, my company would not be mentioned in the report, unless I signed up as a sponsor.

“The potential conflict in this approach, though, is clear. The reports are big business — there were 212 last year — each typically with four or five sponsors. But if much of your top line is dependent on getting tech companies to sponsor your research reports, you’ve got quite an incentive to design questionnaires that will yield the kind of reports tech vendors will want to sponsor.”

Mr. Gomes reports that the company charges $30K for a sponsorship — that’s consistent with what I remember.  So, this is a pretty good business: 212 reports * 4.5 sponsors * $30K == $28,620,000.

Based on my experience with this organization, I can’t believe that they have any credibility.  At least the “analyst” had the decency to leave the call while the sales guy was trying to close me.  From my perspective, this is just paid writing / PR.  There’s nothing wrong with paying for this service, but it’s probably not as meaningful as getting real coverage from an actual analyst.  Does anyone actually base their decisions on material from Aberdeen?

Technorati Tags:  China, China Outsourcing