Meltwater Gate Crashes Cision buyout while GTCR Buys Vocus

meltwater tweet

The tweet heard round the world, the PR/Marketing SaaS world anyway, was tweeted on April 3 from Meltwater CEO, Jorn Lyseggen. “Throwing our hat in the ring today… Together we will transform the industry!” @meltwater http://in.mobile.reuters.com/article/idINL5N0MV1YY20140403?irpc=932 …

This is big news for the SaaS PR/Marketing biz because it further consolidates a shrinking industry. Cision shares have shrunk reportedly nearly 40% in 2013.  Cision ended up selling off its press clipping division to BurrellesLuce leaving it with only it’s PR cloud based PR / Marketing SaaS  products. That may be a reason. It may also be the business climate in the PR industry is changing with clients realizing these companies that have scrambled to be all things to all companies is not what it’s cracked up to be and more to the point… doesn’t pay.samantha

GTCR obviously thinks the SaaS future is bright regardless of the declining earnings performance of the industries biggest players. Vocus is having much of the same shrinkage issues with their stock yet it was just reported after paying millions for I Contact, HARO (help a reporter out ), North Social, and PRWeb, Vocus is being taken private by GTCR for about $446.5 million.

Meltwater and Vocus are well known for their aggressive sales organizations. Meltwater reportedly pays their sales people 40% commission on the first year’s income on a multi year non-cancelable contract. Their rates for services aren’t published because the salesperson determines what the client will pay.

Why would Meltwater want Cision? I suspect so the marketplace has less choice.  Meltwater is infamous for its aggressive sales tactics that leave customers vowing to not renew their contracts.

samstreamMarketwired paid millions for Sysomos in an attempt to expand its product offerings to be more on par with Cision, Meltwater and Vocus. The race to be more than a PR database and distribution service has taken a real toll on the industry. PR Spam has become a favorite topic for reporters tired of being spammed with requests to write stories that are totally unrelated to their beats.

SaaS buzz has been very effective taking business from traditional media monitoring companies like BurrellesLuce, Cision, Allen’s Press clipping Bureau and URMediaNow.  Many in the PR community drank the SaaS koolaide and it nearly killed the traditional media monitoring industry.

Ultimately this has become good news for the “real” media monitoring companies like BurrellesLuce, Allen’s and URMediaNOw that have survived the SaaS attempts at dumbing down the PR/ Marketing industry. screen1The PR community has figured out SaaS is not all it was cracked up to be.

If your company needs a media monitoring service it pays to hire a company with editors that actually read, monitor and verify the validity of every media hit. SaaS Glorified Google News alerts are NOT Media Monitoring and the industry is relearning that fact.

Vocus opened offices in Philippines two years ago to augment their small business sales efforts and PR data base research staff only to eliminate approximately 200 positions two years after opening. They learned the hard way trying to be everything for everyone is not  the best business model. They still have a lease of two floors in one of the newest high rise buildings in Makati, Philippines that now sits mostly empty.

GTCR just increased their offer to $61 per share for Cision.  GTCR and Meltwater must have some pretty strong evidence merging is the best bet for the future. Will it be Cision / Vocus merger or Meltwater / Cision merger? Is it a question of who owns the best PR data base and Press Release distribution service or the best high pressure sales force? One thing that is clear is this: The SaaS cloud based PR/Marketing Koolaide hasn’t fully fermented quite yet.

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