PR software provider Cision reported third quarter revenue fell 12% to around $31.8M as net loss surged to $49.6M on a large write-down of goodwill in North America.
The company, which recently wrapped a balance sheet review and restated downward the previous year's U.S. earnings, weathered what CEO Peter Granat called a "difficult" three-month period.
Granat said the company elected to take a goodwill charge of more than $50M in the quarter over the decline in traditional print and broadcasting monitoring business in Canada.
North American revenue in Q3 fell 13.7% to about $23.9M.
"We are confident that one year post divestment [of Cision's print monitoring operation] and with the leadership changes we have made to the Cision US financial team, along with the improvements made to our financial processes and procedures, that this difficult period is behind us," said Granat.
Ted Faraone (Oct. 24, 2013): I am not astonished by this. The directories are very expensive, and the are many errors. The basic full package, covering TV, Radio, Newspapers, and Magazines in the US and Canada with limited access to the online database costs over $2,000. Full access to the online database is an order of magnitude more expensive. I am sure that many smaller agencies that used to subscribe no longer can afford it.
Ronald N. Levy (Oct. 24, 2013): This is sad but we can learn from it.
It's sad because Cision has been an honest, high-quaity organization that hired and retained bright people.
We can learn two things from the Cision numbers.
1. In the three main things that the Cision does as can be seen from their website--(a) giving accounts a Media Database with 1.5 million contacts, (b) Press Release Distribution, and (c) Media Monitoring--Cision has exceptionally strong competitors in Business Wire and PR Newswire (which I name alphabetically) to get releases out, and the affiliates of BurrellesLuce to monitor usage.
All three competitors are excellent with superb people and budgets to keep making their firms better.
2. The PR business has changed so that there is steadily diminishing demand for release distribution, and few if any PR offices can do it
anywhere near as efficiently as through BW and PRN.
A third problem Cision faces is the fraud firms--the dozens of firms that offer that for $5,000 or $10,000 they'll distribute your release,
then send you computer reports (but not proof) showing hundreds or thousands of placements per release plus millions and millions in
reported online readership.
You pay the money, your management ay not know enough to question whether the massive reported usage really happened, and many firms will even guarantee that if you are not satisfied with the reports your $5,000 or $10,000 per release buys, you can have another release and more reports free.
It's very tough for an honest firm like Cision to compete with some
competitors who are excellent and other competitors who fairly openly offer the PR practitioner fraud: you pay us the $5,000 or $10,000 and we'll give you reports of release "usage" your management will love.
It's not hopeless and Cision may yet return to its glory days and
perhaps even set new records for sales and earnings but three things must be done.
One is to identify this release distributor and monitor as "an honest
PR supplier for honest PR leaders." In other words "we're a good firm for you if you want to do honest, excellent PR work and give your management honest, excellent reports of usage."
Two is to identify what advantages--and I'll bet there may be many I don't know about--Cision offers over its honest competitors in distribution and monitoring.
So three is to advertise enough--in PR media, online and by mail--so the PR community KNOWS what advantages Cision offers. With PR services, as with fresh fruit awaiting shipment at a railroad yard, the hoice is to sell it or smell it.
P&G spends four point something BILLION a year in advertising, many other marketers spend hundreds of millions, and even relatively little guys like Cision and other vendors must spend enough on advertising to make their case or else bear the consequences of not spending enough and not making the case.