Report: Communications tech is now a $4.1 billion industry

PR tech remains a robust economy.

Photo credit: Getty Images
Photo credit: Getty Images

NEW YORK: Spend on communications technology saw a double-digit increase last year to $4.1 billion, according to a report by Burton-Taylor International Consulting.

The social media segment saw the strongest growth, followed by influencer management and media analysis. Media monitoring and press release distribution also grew, but at lower rates.

Aggressive acquisition allowed Cision to capture more market share and remain the category leader, according to the report. In 2018, Cision reported it grew overall revenue by 15.6% year-over-year to $730.4 million. When adjusted for acquisitions and fluctuations in the exchange rate, the company grew revenue by 2% for the full fiscal year, according to the 10-K Cision filed in April.

Cision dwarfs its nearest competitor, Meltwater, although that company continues to grow through acquisition as well. Meanwhile, Kantar and Business Wire were the third and fourth largest industry players, respectively. A new player emerged in the PR software space, when telecoms provider West Corporation acquired Nasdaq’s PR solutions business. That $335 million deal made West Corporation the fifth-largest vendor, overtaking Australia-based Isentia, according to the report.

West has done well in its press distribution base, with strong cross-selling of other services. Now, West Corporation is "moving into acquisitive mode," said the report.

Meltwater and Isentia are jockeying for position in APAC, the report said. Argus Data Insights remained the seventh-largest vendor.

Despite the consolidation taking place, the combined market share of the top seven vendors doesn’t represent a majority, according to the report. The majority of the market belongs to a myriad of specialized vendors.

No one is "rolling over" for Cision, added Burton-Taylor associate Chris Porter.

"We’re struck by the positivity of the other players in the face of all the Cision expansion," Porter said.

In total, Cision has snapped up more than a dozen companies since its 2014 merger with Vocus. It added social media company and digital PR platform TrendKite at the start of 2019. In the year prior, it acquired ShareIQ’s visual technology.

"Each year we ask [the smaller players] about [competition from the larger players], and each year, including this one, they sound excited about the opportunity for them," said Porter.

That could have a lot to do with the overall growth of the market. Even as larger players snap up the smaller ones, the market remains fragmented. It is growing at too fast a pace for any one company to consolidate it, Porter said. There is a healthy amount of competition.

Meltwater acquired two social media analytics companies in 2018, Sysomos and DataSift.

In March 2018, Meltwater announced a $175 million recapitalization in direct lending from Vista Credit Partners, following $60 million in debt funding in 2017.

For Q1 2019, Cision recorded a 3.6% year-over-year increase in revenue to $185.5 million, with improved profitability. Net income for the quarter was $11.6 million, while full-year net income guidance improved to $10 million to $20 million, compared to its original estimate of a loss of $1 million to a profit of $4 million.

Porter said Cision has pivoted to focusing on improving the bottom line after raising debt when it borrowed money to finance its Falcon, TrendKite and Prime Research acquisitions.

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