FOCUS: HI-TECH - Designs on the web. Should PR companies be taking web development seriously enough to bring it in-house? Peter Simpson reports

What is a PR company these days? Some claim they are management consultancies; others say they are internet specialists. There's a lot of pressure for agencies to be 'one-stop shops' in the drive to beat competition in the communications arena from other types of consultancies.

One of the messages from the industry Best Practice guidelines to PR and the internet (PRWeek, 11 February) was that practitioners needed to embrace the opportunities offered by the internet in as broad a sense as possible, as soon as possible.

But after the internet frenzy of the early part of the year, the industry is now taking a more composed look at the extent to which it should be involved in new media, and two of the leading lights in this area are profiled below.

Most of the industry now advises at least some clients on how to use the internet effectively as a communications tool. A smaller number have created special internet divisions, or will advise clients on using the internet but work with specialists on web site design and development.

Finally, a very few have gone the whole hog to set up dedicated web development arms.

Richard Houghton, who runs new digital economy agency Carrot, says PR agencies can build good new media businesses: 'PR agencies are skilled at generating written content and images. Relevant and high quality content is crucial to successful web-based communications and this is an area that PR companies are expert in. So PR agencies should be able to leverage this expertise and understanding when building a new media business.'

But he thinks they should be run separately as they use different business models, with different pay scales, client charging models and account management structures.

'What people are doing at the moment is split into two. Firstly there is the straight consultancy, including site audits to check on consistent brand positioning and messages, content, language, structure, ease of use of online press offices, links and how the site fits in with competitors and partners. That all falls under the marketing communications remit,' he says.

'There are two schools of involvement beyond that: one-off implementations such as microsites for polls and competitions, working with freelance developers - that's part and parcel of the PR remit. Then agencies such as Shandwick, Ketchum and Firefly have full-blown teams to develop and build sites from the ground upwards. They should carry on doing that.

It's highly competitive but I don't see why PR companies shouldn't compete if they can get the talent,' he adds.

Houghton also points out that a growing number of new media design specialists, such as Razorfish, Agency.com and Saltmine, are moving away from pure implementation into internet communications consultancy. 'There's no reason why PR companies can't do it the other way round.'



Who'll rise to the challenge?

Given that the PR industry is well placed to establish ownership of the internet as a communications tool, it's perhaps surprising that so few consultancies have committed themselves to providing a one-stop internet solution for clients.

But many feel the nitty gritty of website design and development is best left to the experts since it is an allied, but alien, skill to the communications professional.

Mantra, which specialises in new media clients, believes that web development is best left to the experts - and that doesn't mean PR people, according to director Debbie Wosskow.

'Panic set in during January and February this year where people genuinely believed that the internet would change the way we all do business and that it would require multi-skilling. But the old skills - with combat trousers on - still apply to new media. We are in PR, we're not in management consultancy and we're not web developers. Specialists should stay specialists,' she says.

Wosskow's view is that any kind of integrated model means a mediocre service across the board. 'Our web development clients, such as Grey Interactive and Amaze, invest huge sums of money into creating award-winning sites, and the idea that that can be replicated by PR companies is nonsense. You have to be the best-of-breed at any level, and you can't do that if you are trying to be all things to all men.'

One option is to buy in talented individuals from the web design and development world, but a major obstacle is the salaries they command.

And even if an agency has managed to juggle the books and buy in a web master, there's still the challenge of integrating the two disciplines, and coming up with the goods. 'It's an attractive sell for a PR agency to have someone who does web design, but it's difficult to be up to the job,' says Wosskow.



Working with specialists

Many PR companies agree, and though they are committed to new media, believe that the best option is to work alongside web development specialist companies.

Grandfield PR managing director Nick Boakes believes the beauty of these firms is their ability to get closer to the client.

But he predicts that the PR industry will take another route in its keenness to 'own' internet communications, and that the specialists will be targets of consolidation in the not-too-distant future.

'They are more manoeuvrable and in-tune with clients seeking web development.

Some of the stronger ones will go on expanding and become large agencies in their own right. But the larger, established PR firms are now either setting up their own web development arms, or seeking to buy up one of the smaller, expert companies,' he says.

Some agencies are committed to building their web development arms organically, however. Beattie Communications gained pounds 590,300 in 1999 - ten per cent of its fees - from its web development activities, although web design is still done by third parties.

'We have grown dramatically since and continue to do so. Web development is very much part of our core activity I don't think, or can see how, PR agencies can ignore web development, or rely on smaller companies to carry out this essential work,' says managing director Gordon Beattie.

Hill & Knowlton is one of the larger consultancies to create a hybrid model for its online development with its Netcoms division. It also employs third parties to bring in specialist technology, and to advise on other net communications know-how, such as legal issues.

Netcoms worldwide director Tony Burgess-Web says: 'The impact of net communications reaches across every aspect of our business and sectors.

Our corporate communications, its service lines and practices, are clearly impacted by what happens on the internet.'

But Burgess-Web acknowledges that the industry is still on a sharp learning curve: 'There are many challenges along the way and I'm sure there are many PR companies, including ourselves, who will make mistakes. This is not something that's been done before, and therefore many are experimenting in different ways. There is no doubt that companies that do not do something in this area are going to find themselves unable to compete.'



Building an online presence

In 1999, Brodeur Worldwide gained five per cent of fees from web development and almost equalled that in the first half of 2000.

Vice-chairman Jonathan Simnett says web development is far too important to be left to small specialist companies, as the internet is increasingly at the heart of corporate communications.

Building an online PR capability requires a significant investment and technology and training, says Simnett, who agrees with Burgess-Web in that 'no one has yet written the rulebook so consultancies must be prepared to learn by making mistakes'.

But he recognises that PR companies can't do it all, and should not cross the line between websites that leverage communications strategies, and transactional websites that leverage business strategies.

'Such engines of e-commerce are vastly more complex affairs,' explains Simnett.

Technology is moving fast, however, and Lewis president and CEO Chris Lewis points out that web development is becoming easier and less technical as technology improves. 'Website design will soon be a purely design task, so it can be done by a PR agency as easily as anywhere else can.'

Lewis has a caveat, however, which agrees with Mantra: 'This doesn't mean that we should all rush into offering as many services as we can.

PR agencies should stick to their core competencies. Although they may be able to integrate a full package of marketing services - PR, web design, advertising - this doesn't necessarily mean that they do all of them well.

Experience shows that most companies are prepared to pay higher prices for best-of-breed solutions.'

The question is whether PR consultancies are prepared to commit to being best-of-breed when it comes to web development.



CHRIS DICKENS - Edelman Interactive Solutions (EIS)

Chris Dickens, managing director of Edelman Public Relations Worldwide's interactive arm EIS, has come a long way since working as a graduate recruit at PRWeek's publisher, Haymarket.

Having finished his degree in linguistics and literature at University College London, Dickens wanted to be a journalist. Haymarket persuaded him that media sales was the career for him.

Working across all areas of the business taught Dickens a valuable lesson: 'Often job titles are meaningless and roles unclear. In this environment managers must stay close to the pulse and provide clear direction and a sense of leadership for those around them.'

Dickens grew increasingly interested in the launch of new titles and products and the clear thinking and agility it required. 'Communicating completely new and often technically complex ideas to clients is something we do every day in digital media,' he says.

His interest in new media began as a director at Premier Magazines, working on a new inflight TV project. Another project, a fully interactive TV system for British Airways, gave Dickens the opportunity to work alongside BT, Matsushita and a small interactive design agency called Module. The project became a clash of corporate egos from the different companies and it seemed that the team from Module was the only one 'which had a clear focus on the branding and communications issues'.



Change of direction

With the cancellation of the BA project Dickens decided on a change of direction. BT was setting up an interactive media unit and he agreed a contract-based relationship, giving him the freedom to work on other projects. This led to his working for Module full time.

Dickens spearheaded the company's repositioning, the hiring of key personnel and a rebranding of the company as business-to-business specialists.

Module's subsequent growth led to its acquisition by Grey. The two businesses successfully integrated and Grey Interactive grew at a ferocious rate - from 30 to 130 staff within a year.

Last month Dickens left Grey Interactive to join EIS where he is setting up its London and Dublin operations. Once up-and-running, he will develop its operation further for the European network.

'Why does a PR company want to develop an interactive agency? Interactive communication lends itself less to advertising soundbites and more to content related communication packages. Ad agencies are not particularly interested in maintaining a dialogue with a customer. This gives PR companies a real advantage in this area.'



JAMES WARREN - Bullet Online

James Warren is the founder of Bullet Online, the internet division of Bite Communications, and the PRWeek Young Achiever of the Year 2000.

Not bad for a college drop-out who, while on holiday, jotted down on a piece of paper his idea for Bullet and the services it could provide in the new media PR world.

Bullet is a shining light in the web development firmament, offering a range of internet and digital services to clients including Oracle, BT, Iomega, ebookers.com, Cambridge Technology Partners, Sun Microsystems and Handspring.

Warren devised a series of products and services that utilised internet technology to assist the communications efforts of Bite's clients. These proved so popular and successful that Bite Digital became Bullet, an independent company which is able to offer its services to other PR agencies and clients outside of Bite's roster.



Gainful employment

Warren's gift for merging his knowledge of communications and his understanding of top-end technology stems from his formative years as an office boy at London advertising agency BBDO, and then during his university gap year, which he spent deeply entrenched in technology working for IBM at its research laboratory in Hampshire.

'For someone with no technical experience, that year at IBM gave me an incredible insight into the enormous potential offered by modern technology - particularly as far as the marketing and comms industries were concerned,' explains Warren. He was so keen he dropped out of his business information technology degree at Newcastle Polytechnic to return to IBM for a further six-month contract.

After a brief spell as a management consultant, Warren moved to London and joined Text 100. He took to the role like a duck to water and within months was invited to join new Text 100 spin-off, Bite Communications, as the most junior member of the fledgling agency.

Today, Warren says the internet presents the PR industry with a golden opportunity. The challenge PR agencies face is the 'meshing together' of communications experts with technicians and designers to create a fully functioning and attractive web presence.

'One potential interim step is to forge strategic alliances with the web agencies, where a PR industry offers the content and the agency the technical and design expertise to create the site. But don't be under any illusions that we're not planning to attack the website development arena in the not too distant future.'



TOP WEB PLAYERS BY 1999 FEE INCOME

With companies extending their brands onto the internet and the proliferation of online start-ups, it is inevitable that PR agencies are also moving into the increasingly important area of web development.

This is a brief look at the top players by web development fee income in1999. This list is based on audited1999 fee incomes, taken from agency submissions for the Top 150 published on 28 April.

The top PR agencies that are doing web development work for their clients are finding that their income from this area of communication is growing fast.

Top of the high earners is Shandwick. In 1999 its web development fee income was pounds 781,470. Then comes Shire Hall, which had a total 1999 fee income of pounds 5,903,000. Ten per cent of this was from web development work - a figure of pounds 590,300.

Following closely is Beattie Media, which has a web development income of pounds 590,000.

Meditech Media's 15 per cent of total fee income gives it a web development income of pounds 582,450. Capita Communications had a web development income of pounds 345,124.

Next is Brodeur Worldwide (pounds 261,269). Compared to the period of January to June last year, the agency's web development fee income has doubled for the same period in 2000.

Bite Communications' Bullet had a web development fee income of pounds 190,628 in 1999.

It is followed by Grandfield. Managing director Nick Boakes says his agency has experienced massive income growth. For 1999 its web development fee income was pounds 167,000. From January to October this year, its income from web development was pounds 411,000.

Grant Butler Coomber had a web development fee income of pounds 143,963, five per cent of its total income.

Key Communications, reported two per cent of its total fee income from web development - pounds 122,220.





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