ANALYSIS - Client Profile - The Nasdaq PR team learns to ride the bull - With Nasdaq reaching new heights seemingly every day, one would think that handling communications for the index would be a PR pro’s dream. But as Craig McGuire reports, chan

When the AP reported last fall that a group calling itself the ’United Loan Gunmen’ had infiltrated the computer system running the web sites for Nasdaq and the American Stock Exchange, Nasdaq director of media operations Scott Peterson knew it was going to be a long day. For an organization that oversees billions of dollars in electronic transactions, any security breach is a serious threat.

When the AP reported last fall that a group calling itself the ’United Loan Gunmen’ had infiltrated the computer system running the web sites for Nasdaq and the American Stock Exchange, Nasdaq director of media operations Scott Peterson knew it was going to be a long day. For an organization that oversees billions of dollars in electronic transactions, any security breach is a serious threat.

When the AP reported last fall that a group calling itself the

’United Loan Gunmen’ had infiltrated the computer system running the web

sites for Nasdaq and the American Stock Exchange, Nasdaq director of

media operations Scott Peterson knew it was going to be a long day. For

an organization that oversees billions of dollars in electronic

transactions, any security breach is a serious threat.



In less than an hour, Nasdaq’s PR pros were flooded with calls from over

30 news organizations. That afternoon and evening, hundreds of print and

online publications around the world ran with the story. But it was all

a hoax.



’It turned out there was nothing to the story,’ says Peterson. ’What

they had done was make an electronic mirror copy of our home-page,

altered that image and then had someone show that copy to the AP.’ It

just goes to show: Nasdaq, with its record gains and rapid global

expansion, may be a perennial media darling, but like any other

business, it’s only one phone call away from a crisis.



There are, however, tougher PR assignments for Peterson’s crew than

debunking the work of sembling hackers. After all, it seems that every

time a bell rings these days, Nasdaq is touting some record-breaking

milestone or another.



And it’s getting even easier for Nasdaq’s PR pros to garner media

coverage.



Six of the 10 highest share volume days in Nasdaq’s history have

occurred during the first three weeks of this year. And that comes on

the heels of the market’s fifth consecutive year of record gains.



In fact, Nasdaq receives such star treatment from the media that PR pros

for the market were able to orchestrate not one, not two, but three

media circuses for the same event: the opening of Nasdaq’s new Times

Square digs.



First, New York City Mayor Rudolph Giuliani joined NASD (National

Association of Securities Dealers) CEO Frank Zarb in lighting the

MarketSite Tower, the world’s largest video screen. The following week,

Governor George Pataki dropped by to open the MarketSite broadcast

facility. And tomorrow marks the unveiling of the MarketSite Public

Interactive Exhibit, where tourists can view exhibits and play stock

market games.



Nasdaq hasn’t experienced any real negative press since 1996 when the

SEC and the US Justice Department both launched investigations into the

manner in which market-makers conducted trades - resulting in the SEC’s

passage of new order-handling rules in early 1997. But while

market-makers are part of the Nasdaq system, they are not actual Nasdaq

employees.



Since then, it seems as though the media has fallen hopelessly in love

with Nasdaq. Rarely does a business-related broadcast air, or a news

story run, that doesn’t include a veiled love-letter to the tech-heavy

exchange.



But changes are on the way. The Board of Governors at the NASD, Nasdaq’s

parent, has unanimously approved a major restructuring plan which calls

for selling off a majority stake in the market. With the NASD’s

corporate communications SVP Andrew MacMillan heading up communications

for the exchange, any sort of reorganization at NASD would mean big

changes in the Nasdaq media relations department. The most likely

scenario has MacMillan switching solely over to Nasdaq, though a

decision is still pretty far off. Currently MacMillan spends roughly

half of his time on Nasdaq PR, and divides the rest of his time equally

among NASD, NASD Regulation and the American Stock Exchange.



But Nasdaq’s PR operations are in need of an upgrade, irrespective of

the larger restructuring effort. Since skating in at the tail end of the

SEC’s inquiry, both MacMillan and Peterson have wrestled with a

ballooning number of projects and the media’s insatiable appetite to

report them.



Because of this increased interest, MacMillan concedes that Nasdaq’s PR

operations will have to expand.



And more than anything else, continued foreign expansion dictates that

Nasdaq must eventually deploy more internal PR pros on the ground - such

as it did when Nasdaq International’s PR operations were established in

the mid-1980s. PR operations for Nasdaq-Europe, an entirely new market

set for a first-quarter 2001 launch, are tentatively planned to fall

under Nasdaq International’s PR arm.



In the interim, Nasdaq has contracted a number of agencies, including

The Torrenzano Group and Kekst. ’Internationally we use PR firms that

have the local contacts to help us get the story out, but we need to

build up our capacity,’ says MacMillan. ’We know we need to fix that.

We’ve established the infrastructure in London under (Nasdaq

International VP) Maggie Kelly. Now we need to do that elsewhere.’



MacMillan estimates that Nasdaq’s PR pros field over 100 calls each day

from journalists requesting information. But that’s on a normal day, and

there haven’t been many of those of late. Robert Sales, a senior editor

at Wall Street & Technology, has tracked Nasdaq for the past four years

and is generally impressed with its PR operation.



’On a scale of one to 10, I’d give Nasdaq an eight in terms of meeting

the needs of journalists,’ he says. ’Unlike with some other exchanges, I

usually don’t have to maneuver around the PR guys to get to the

information I need. Occasionally, however, they let too much time lapse

before returning my calls.’



Nasdaq has four primary methods of disseminating information. These

include the ’BlastFax,’ which Peterson says is forwarded to a list of

the 120 top news organizations Nasdaq deals with. Then there’s an e-mail

list for the most important releases. Nasdaq also uses PR Newswire, and

lastly, posts everything to its PR site (www.Nasdaqnews.com).



Not surprisingly, the Nasdaq PR team is very discriminating with company

executives’ time, and has no patience for journalists who squander

it.



’Don’t waste senior management’s time - that’s our biggest don’t,’ says

MacMillan. ’Three stars have to be aligned for me to arrange an

interview with Frank Zarb: the right publication, the right reporter and

the right story. If even one of those things are out of kilter, it’s not

going to happen.’ Arrogant? Perhaps, but that’s what happens when every

media outlet wants a piece of you.



Many financial pundits say Nasdaq’s bubble is bound to burst sooner or

later. Preparing for the inevitable, Nasdaq PR pros have crisis plans in

place for dozens of scenarios. And while they will discuss operations,

they keep mum about market performance. ’We provide a window onto the

market,’ says Peterson. And looking out from Nasdaq’s new headquarters

in Times Square, the view is pretty impressive.



NASDAQ

PR head: NASD corporate communications SVP Andrew MacMillan

Internal PR staff: Nasdaq USA: director Scott Peterson; associate

director Judith Inosanto; manager Wayne Lee. Nasdaq International: VP

Maggie Kelly; director Judith Lacey External agencies: The Torrenzano

Group (US); Kekst & Company (US); Citigate Dewe Rogerson (UK); Ogilvy

Public Relations Worldwide (Europe); I&E Consultants (France); Gavin

Anderson & Company (Germany)

The market value of the more than 4,800 companies listed on Nasdaq ended

the year at dollars 5.2 trillion, up over 100% from year-end 1998.



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