ANALYSIS: Client Profile - How to position a 200 year-old Internet firm. Britannica knew that its move from print to online wouldn’t be easy. And when an influx of visitors overloaded its new web site, a PR disaster was looking likely. Savvy PR ba

When Tom Panelas started working at Encyclopedia Britannica around 18 years ago, the company had inked a deal to make its content available through Lexis-Nexis. The idea at the time was that professional researchers would be interested in paying fees to access the information. ’Few people envisioned a time when direct or electronic publishing would happen in the consumer market,’ he recalls. How times have changed.

When Tom Panelas started working at Encyclopedia Britannica around 18 years ago, the company had inked a deal to make its content available through Lexis-Nexis. The idea at the time was that professional researchers would be interested in paying fees to access the information. ’Few people envisioned a time when direct or electronic publishing would happen in the consumer market,’ he recalls. How times have changed.

When Tom Panelas started working at Encyclopedia Britannica around

18 years ago, the company had inked a deal to make its content available

through Lexis-Nexis. The idea at the time was that professional

researchers would be interested in paying fees to access the

information. ’Few people envisioned a time when direct or electronic

publishing would happen in the consumer market,’ he recalls. How times

have changed.



It’s now almost the year 2000 and Panelas, director of corporate

communications with Chicago-based Britannica, has had to face the PR

challenge of reshaping the company’s image from that of a stodgy book

publisher to that of an online knowledge provider.



Britannica recently launched a no-fee web site, putting its 200-year-old

encyclopedia online, and also forged partnerships with more than 70

firms to include news, weather, sports and financial information.



Panelas had to shape a PR campaign for the new site. And when it

launched on October 19, he had to switch gears swiftly to deal with a

crisis - visitor demand overwhelmed the servers and effectively shut

down the new endeavor for more than two weeks.



Panelas and others think Britannica has weathered the technical problems

of those first days with relatively little long-term PR damage. But

still ahead is the more important issue of revamping the company’s

overall image. And its survival is at stake.





Contraction



In the past decade, print sales have fallen 80% and Britannica has

contracted dramatically. While the privately held company no longer

releases financial information, industry sources estimate its sales have

fallen from a high of dollars 650 million in 1989 to about dollars 300

million in 1998. Door-to-door sales ceased in 1996. Its workforce has

been similarly decimated, from 2,300 a decade ago to about 350

today.



Consumers who use encyclopedias these days tend to buy them on CDs, like

Microsoft’s Encarta, or they simply look online for information. Other

encyclopedias are already available on the Web. ’Britannica had been

written about as epitomizing the type of company that didn’t get it,’

says Don Middleberg, head of Middleberg + Associates, Britannica’s PR

agency.



Panelas contends Britannica ’gets it’ now. ’It’s as if the old company

moved out and a new company moved in and kept the same name,’ he

says.



Indeed, the company has formed a new subsidiary, Britannica.com, to

handle its online venture. The company is also convinced PR will be a

major component in shaping its new image: ’This is one place where PR

has a place of respect at the table.’



That wasn’t always the case. When Panelas came to Britannica, PR’s role

was ambiguous. The direct sales force at the time didn’t want PR talking

about product price or attributes. These days, PR is an integral part of

the company’s marketing efforts.



When Britannica decided about a year ago that it had to make a dramatic

change of direction with a free access web site, Panelas knew he

couldn’t handle the PR alone; he is a one-man PR band within the lean

Britannica corporate structure. So he went looking for an agency with

experience taking established brand names onto the Web. He hired

Middleberg in the summer and took on a UK agency to handle PR there. He

also retained long-time Chicago PR fixture Margie Korshak to help raise

the company’s PR image in the Chicago business community, stressing its

new hi-tech focus.



While he won’t disclose exact figures, Panelas says Britannica is now

spending ’well into six figures’ annually on PR, a major increase over

1998.



Middleberg recommended positioning the new Britannica site as ’the place

where smart people will come.’ Panelas wanted PR efforts to stress that

the new site would offer more than the encyclopedia. Britannica hopes to

make money from advertising and partnerships, but profits remain elusive

for most web sites. That means it needs content that will keep people

coming back. The site is aimed at the 18-to-49-year-old audience, a

change from the traditional student users of Britannica.



PR efforts began in the summer as Britannica executives made mention of

changes coming in its Web presence. ’Word was starting to get out that

we were doing something interesting,’ Panelas recalls. Calls for more

information started coming from major media outlets. Panelas and

Middleberg decided to give The Wall Street Journal and The LA Times

exclusive stories for the day of the site’s launch. Those, in turn,

generated wire service stories the morning of the launch, followed by

electronic media coverage and widespread newspaper coverage. Panelas

recalls more than 1,000 media calls following the launch. ’This wasn’t

Joe Nobody launching a site,’ Middleberg jokes.





Crash



Users flocked to the site, flooding it off the Net that first day. More

than three million tried to log on in the first 20 minutes, with more

than 10 million trying to get on the first day. Britannica hadn’t

anticipated such a demand, and Middleberg advised framing it as a

success story.



Britannica.com CEO Don Yannias quickly became the company spokesman on

the crash issue, and a letter from Yannias appeared on the site

explaining the problems. Middleberg’s people stressed the positive

nature of the high level of demand for site access, and Panelas and

Middleberg think they contained the damage. Panelas points to subsequent

favorable reviews in the Journal and Computerworld.



Still, some question the company’s spin on the issue. ’Being who they

are, I think it affected their credibility,’ says Sandra Saias, SVP and

group head of Edelman’s consumer technology group. But others insist

online image is about the here and now, and past problems quickly fade

away.



’(Initial site launch) problems have been proven time and time again to

be forgotten,’ says Paul Rand, president and CEO of Corporate Technology

Communications, a Chicago hi-tech PR and business consulting firm.



Britannica has added 60 new servers and is ironing out software problems

on the site.



Now the challenge is repositioning the brand. ’That’s not something you

do with one press release or a launch,’ Panelas says. PR will emphasize

the quality and reliability of Britannica as an information source. It

won’t be easy, as it will have to balance talk of its heritage with

efforts to seem new and cutting-edge. ’A 200-year-old Internet company

is something of an anomaly,’ Rand notes.



Panelas’ job going forward is to make sure Britannica isn’t seen as an

anomaly, but rather as a major Web destination. The travelling salesmen

might be gone, but Britannica still hopes to be a major presence in

American homes.





BRITANNICA



PR head: Tom Panelas, director of corporate communications



Corporate Communications duties: Driving traffic to new Britannica.com

web site, repositioning company as a Web destination, stressing variety

of content on web site



Agencies: Middleberg + Assoc. (New York) to position new web site;

Margie Korshak to raise corporate and tech profile in Chicago; Band &

Brown Communications (UK) for UK work.



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