By Mark Schlack
At ASBPE, we are very active in promoting ethics in publishing. The 800-lb gorilla in that discussion is the relationship between editorial and advertising. However, there are some 400-lb gorillas in the same room and one of them is the ethical behavior of sources, notably analyst firms.
In the bang-bang world of online publishing, having a friendly analyst who can give you a quote within the hour is very seductive for reporters. But many analysts are not, in fact, unbiased sources, and many are not even disinterested sources, at least as far as financial interests. This can be particularly vexing in markets where there are a lot of startups—analyst firms are often employed by startups to help validate them and sometimes pay the analysts in options or shares. How critical will an analyst be if their comments are going to reduce the value of that stock?
Now, software development analyst Ray Wang offers some insights into this world and is calling for an analyst code of ethics. He freely admits the self-serving nature of his call, but it’s nonetheless an eye-opening description of some of the more egregious analyst practices. You’ll want to know what goes into this sausage before you eat it.
What should reporters do about this state of affairs? More broadly, should publications have some kind of standards about which analysts they will engage with, and what sorts of disclosure they will require? Is that practical—or will you just find yourself with fewer analyst sources? And is that a bad thing? Interested to hear your comments.
For myself, I think less is more with analysts. The frenzy to get news up fast online has led to something of an echo chamber of insight-starved commentators. They can be a crutch, and at least in the fields I’ve covered, at least half of the analysts are not really authorities and rarely have significant insights. They’re more reminiscent of political analysts—they all say what they think people want to hear, and people, in this context, might mean potential clients. Cultivate the best ones and don’t subject your readers to pap. And if you know that they’re corrupt, cut ’em out. It’s not our job to quote shills.