With the latest inflation figures and earnings growth being announced this week there has been a lot of talk about the squeezing of real incomes. A few weeks ago I put together this graph but hadn’t got round to publishing it.
The graph shows the trend in average real earnings (the black line) based on earnings growth less the CPI measure of inflation since 2000. I used CPI to reflect buying power though some might suggest RPI would be better to reflect total living costs. However I suspect the story would be similar. The future data is based on the May Bank of England quarterly inflation report and I have assumed earnings growth of 2.5% per annum for the next two and half years.
You can see that the trendline steadily rises to a peak in March 2008 when on average we were around 22% better off apparently than eight years before.
Since then things have gone rapidly south. The graph estimates we are about 5% worse off now than in March 2008 and will be a further 4% worse off by the end of December 2013. In fact by the end of December 2013 the analysis predicts we will be only as well off on average as we were at the end of 2004, nine years earlier.
But worse still is the “Expectations Gap”. This represents the difference between what we would have expected had the pre recessionary trend continued and what we are actually likely to experience.
This gap says we are 11% worse off now, and will be 18% worse off at the end of 2013 on average than we expected to be.
A few weeks ago whilst discussing the timing of a FIRinterview with me on the value of press releases (which is now published here by the way)Â Shel Holtz asked me if I had any plans to update the research. As it had been over 18 months this seemed a good idea so I booted up Excel and here are the results
1,044 releases were analysed from those distributed in the 6 months from September 2010 to March 2011
Coverage is data is based on RealWire’s Proveit coverage tracking and evaluation service 79 were Social Media News Releases (releases related to 62 different companies, across 21 different industry sectors)
965 were “Traditional” Releases (releases related to 339 different companies, across 28 different industry sectors)
So overall the sample of SMNRs achieved over three times as much editorial/blog coverage on average (15.7 pieces v 5.0 pieces) as the “traditional” releases.
As with the previous analysis I think one of the primary reasons for the difference in performance is that the additional investment that can often be required to produce an SMNR – multimedia assets, links to background research etc – means that they are used for stories that the sender perceives are potentially high impact and therefore likely to be of interest to a wide audience.
Another reason could be the lower proportion of B2B releases in the SMNR sample. However I am not necessarily convinced this is the case as there are plenty of examples of B2B releases in the traditional sample that performed to a similar level as the best performing B2C SMNRs.
As I indicated in my interview with Shel I think it is more likely that a higher proportion of traditional releases are more informative in nature e.g. new appointment, new customer, financial results, tradeshow attendance etc. These stories are of potential value to relevant publications, but it is likely that the number of such publications will be lower than where the release is around a broader topic of conversation e.g. research, market changes, new products etc. If people would find this of interest then let me know in the comments as further study of the nature of the releases themselves might shed some more light.
In the meantime on a short promotional note it is good to see that our overall pickup stat of 80%+ of releases gaining editorial/blog coverage still compares very favourably with our competition
The PRFilter platform has been publicly live for a month now and in that time there have been thousands of searches performed. But as well as finding relevant press releases PRFilter now has a wealth of data on press release content.
Independently Adam Sherk last month used PRFilter to look at how often buzzwords are used in releases – read more about it here. We in turn thought it would be interesting to look at which technology brands, topics and products have been talked about most in press releases over the last couple of months. As an industry there is a lot of time and money spent analysing what the media writes/talks about, but what are PRs trying to talk about and do the two things fit?
Thats why we have produced our first PRFilter Technology PR Rankings. These rankings analyse the tens of thousands of releases indexed by PRFilter each month and look for the most talked about technology brands, topics and products within them.
Highlights from this first month (February 2011) include:
Releases mentioning cloud technologies were more than twice as frequent as those referencing social media however this was down from three times as frequent in January.
iPad related releases were down 37% perhaps reflecting a calm before March iPad2 storm.
Significant increases in mentions of telecoms brands e.g. Ericsson, Nokia and ZTE and technologies e.g. LTE and NFC, reflecting the hosting of Mobile World Congress during the month.
A presentation of the full details of the Top 25 technology brands and the Top 50 technology topics/products can be found here or view below.
This first month’s rankings demonstrate that a large number of stories are being created around certain brands and topics and not all of these are necessarily in areas that are likely to provoke great interest from the media.
We hope that producing these monthly rankings will assist public relations practitioners in developing a higher proportion of stories that journalists and bloggers find of interest and lead to improved coverage for the companies concerned.
As this is the first month there are bound to be things we could do better or information people would like to see next time so please let us know in the comments.
We have also started with Technology because that was the sector PRFilter was initially focussed on when it was first launched. However if there is demand we will look to expand the rankings to cover other sectors. Again feel free to let us know.
I had some discussion this morning on Twitter about what level of ownership the founders are likely to still have after the company’s latest round of VC funding. I thought I would do a bit of digging and see if I could estimate it.
Note: If anyone is aware of any funding rounds not included below, have specific information on any of the assumptions made or can spot flaws in my calculations please feel free to highlight them in the comments.
First round – July 2007
This is the trickiest element as I don’t think terms of this deal were ever disclosed. Techcrunch reported at the time an estimate of $1-$5m of funding raised. It was later reported that the deal size was net funding after costs of $4.8m. The unknown factor though is what level of equity Union Square Ventures (the first VC) received in return for this investment.
In the absence of any firm figure for this dilution we need to make an estimate. This was obviously a pretty early stage investment at a relatively significant ($5m) level so one could expect the dilution to be fairly significant. We also know from the Second Round (see below) that almost a year later Twitter was valued pre investment at $80m. So balancing these factors lets assume a pre investment valuation for the first round of $20m which would mean that ownership post First Round would have been:
Founders – 80 per cent
VC – 20 per cent
This estimate is highly material to the rest of the calculations as it sets the initial level of founder ownership that all other rounds will then dilute. In the conclusion below I indicate the impact of different assumptions for this round to the current level of ownership.
Second Round – May 2008
Investment size was reported this time at $15m with a pre investment valuation of $80m. Post investment this gives revised ownership of:
Founders – 67.4 per cent
First Round VC – 16.8 per cent
Second Round VC – 15.8 per cent
Third Round – February 2009
Investment reported at $35m with a valuation of $250m though it is not clear if this is pre or post investment. If we assume pre this gives the following ownership post investment:
Founders – 59.1 per cent
First Round VC – 14.8 per cent
Second Round VCs – 13.9 per cent
Third Round VCs – 12.3 per cent
Fourth Round – September 2009
Investment size reported at $100m with a valuation of $1bn. Again not stated whether pre or post so lets assume pre gives the following ownership post investment:
Founders – 53.7 per cent
First Round VC – 13.4 per cent
Second Round VCs – 12.6 per cent
Third Round VCs – 11.2 per cent
Fourth Round VCs – 9.1 per cent
Fifth and latest round – December 2010
Investment reported at $200m at a valuation of $3.7bn. Again not stated whether pre or post so lets assume pre gives the following current ownership estimate:
Founders – 51.0 per cent
First Round VC – 12.7 per cent
Second Round VCs – 11.9 per cent
Third Round VCs – 10.6 per cent
Fourth Round VCs – 8.6 per cent
Fifth Round VCs – 5.1 per cent
Conclusion
This analysis would estimate the Twitter Founders ownership at 51 per cent with a valuation approaching $2bn.
If you vary the First round dilution assumption you get the following alternative estimates for the current level:
Initial dilution
Founder ownership
Valuation
10%
57.3%
$2.25bn
15%
54.1%
$2.10bn
25%
47.8%
$1.85bn
33%
42.5%
$1.65bn
40%
38.2%
$1.50bn
50%
31.9%
$1.25bn
NB It is also worth noting that if the valuations for rounds 3, 4 and 5 were all post investment valuations this would lead to an additional dilution in all the ownership percentage figures of approximately 3.25 per cent i.e. 51 per cent would fall to 49 per cent. The valuation figures would also all fall by approximately 8 per cent as the post investment current valuation would be $3.7bn not $3.9bn ($3.7bn valuation + $200m investment).
Andrew Lim – Editorial Director, Recombu and Founder of UKTJPR “PRfilter is a fantastic way to manage press releases and find interesting stories.
James Holland Editor, Electric Pig “Catering to the whimsy of fickle journalistic tastes is no easy task, but the intelligent tuning behind PR Filter shows great promise. A service that cuts the clutter, and brings me news I can actually use? Sign me up!
Stuart Miles Owner/Editor, Pocket Lint “PRFilter looks to be the service that will help me get the news I want and filter out the press releases I don’t
To date the use of technology to solve the issue of irrelevant or badly targeted PR content has been relatively limited. Database structures used for press release targeting are generally based around categorisation or perhaps keywords. Depending on the level of granularity this can often result in a poor match of a particular press release to individual journalists or bloggers.
Recently new language analysis based databases have started to be released that look at a journalist or blogger’s output in order to try and identify those who talk about a particular topic the most. This improves the intelligence of the approach for the sender if they use such tools effectively.
But even tools such as these do not address the issue from the individual journalist or blogger’s perspective. They don’t allow the recipients themselves to decide how relevant something must be to get their attention. Meanwhile spam filters or rules based inbox systems are often crude or time consuming to manage.
At RealWire we thought we would try and take a different approach. Having built a system to improve the targeting of our own distribution (which we will be applying in the coming weeks) we decided to go further. We asked ourselves – what if we could adapt the system to provide relevant releases to individual journalists and bloggers across thousands of releases a day from multiple sources?
So after months of development, in a bold experiment to both demonstrate our filtering technology and as a potential solution to the issue of irrelevant PR we have built PRFilter.
We believe PRFilter is something different:
Like the language analysis databases, PRFilter’s active interest technology builds a profile of a journalist or blogger’s interests from their own, or their publication’s, published articles. It then refines and updates this profile as new articles are published.
But then it flips things on their head and applies this profile to an inbound aggregated stream of press releases from multiple sources, presenting the individual journalist or blogger with the releases it thinks are most relevant to them – in a given time period, in selected geographies and even on a certain topic.
The user can then set their own personal relevance threshold and subscribe to alerts which pass this test (currently via RSS, other notification systems to follow). They can even train the system to improve its predictions by providing feedback on when it is right and wrong.
Making finding relevant stories a quicker and easier task and ensuring that senders of PR know that when their releases are indexed by PRFilter they will be seen by the most relevant media.
As the quotes above show we have already had some great feedback from initial beta testers, but like all beta applications we know it won’t be perfect and are keen to get feedback from all interested parties. Either contact me @AdParker, [email] adam@realwire.com, follow @PRFilter or register your interest in a beta account or updates here.
