In this third year of its Regional Forums, PRWeek will focus on seven top markets: Los Angeles, New York, Chicago, the Bay Area, Washington, DC, Atlanta and Texas.
For each of these regions, leading PR professionals from a variety of agencies, corporations, and nonprofits will participate in a roundtable discussion about the PR issues that affect them and their peers. Julia Hood, Doug Quenqua, and Andrew Gordon were in the Bay Area for the fourth of this year's PRWeek Regional Forums.
Click here for the feature as it appeared in the magazine.
The unabridged transcript follows below.
President and managing partner A&R Partners
CEO, Bite Communications
MD and technology lead, Zeno Group
Director of public relations, Chronicle Books
Director of corporate media relations, Hewlett-Packard
Associate vice chancellor of university relations, University of California at San Francisco
SVP of corporate public relations, Charles Schwab
Lydia Graham, president, Graham & Associates
Interim VP of corporate communications, Google
West Coast president, Fleishman-Hillard
President and CEO, Landis Communications
President, OutCast Communications
VP of communications, San Francisco Giants
THE PR BUSINESS
Andrew Gordon (PRWeek): I've been hearing for the last several months that the market is better. Better how?
Clive Armitage (Bite Communications): That point about the patchiness of the recovery is well made. We're seeing for first time in a while some interesting calls, meaning "wow, that's a really cool company, that's a really cool technology." But then we're seeing other companies, such as software, continue to struggle. The messages are still tough there, and they're struggling with their budgets. So it's quite polarized in terms of the recovery.
Lydia Graham (Graham & Associates): I think there's more of a pipeline than there was 12 months ago. And budgets seem to be moving back to a reasonable level, which is encouraging. But I do think clients are expecting more. They're under a lot of pressure to see results very quickly, so I think there's a lot of pressure on agencies to perform.
Julia Hood (PRWeek): How about on the corporate side?
Greg Gable (Charles Schwab): I agree that we're trying to be more demanding. [Laughter]
Caryn Marooney (OutCast Communications): Good job!
Gable (Schwab): But there's certainly an appetite that is strong to integrate public relations more into the marketing mix more aggressively. And there's certainly in our business - and each industry is different - but in the financial services, an appetite right now to be more aggressive. So things feel like they're improving.
Berard (Zeno): I think about this when I read stories about the jobless recovery, which seems to be a metaphor for public relations. Things seem to be better, but are there really more people at work?
Gable (Schwab): In the corporate environment, we haven't expanded from a people perspective much or at all in the last few years. We have budgets, but we have to look at them carefully, and I think we're more willing to spend them with an agency than grow staff because of the risk inherent in that, and you face the same thing on the agency side.
Berard (Zeno): Outsourcing risk has become a big part of what we do.
Ryan Donovan (Hewlett-Packard): From an HP perspective, obviously we are very focused on cost containment right now, so as a result that puts pressure on our agency budgets. I think also the bigger driver is the value of return. We want to know what we're getting for what we're spending.
The agencies, and we have three, those that are best at serving us are mindful of those cost pressures that we're under, and that they don't try to spend too much on a particular project. If we ask for A, and they give us A and B, we'll say "we don't want A and B, we just want A. If we wanted A and B would have asked for A and B." So, that can be challenging sometimes.
Landis (Landis): I'd like to corroborate what Ryan said. I think one of the important things I learned during the downturn, if you're not able to quantify ROI for what you're doing for your client in a really tangible way that supports their business model, then guess what, you're the first thing that goes when it comes time to the budget review.
The good news of the downturn is we spent a lot of time really working on ROI metrics, and I think what you're saying on the client side is those are the agencies that provide value, that you can prove to the company that we're actually supporting your business, we're increasing your sales, or whatever their goal is.
Armitage (Bite): That says something about our industry, that we're now saying we really must work out how we can add some value to our clients.
Landis (Landis): And I've been in business for 15 years. It's sort of pathetic actually, that we just thought it was our good name or getting a bunch of clips. But I think this is good for the industry.
Angus (A&R): Oh, I agree. The bar is higher, isn't it? We've all got a lot higher level things to do and more of them, for the same budgets.
Marooney (OutCast): The venture community, initially during the bubble, couldn't hire us soon enough for enough money. It was just "do it now, do it faster, the window is closing, go." And then we had the situation with the bust and they said stop. They wanted nothing. So what's interesting is it is definitely coming back on the venture [capital] side, it feels like. But just like funding with start-ups, the requirements are different. It's common sense. They look for different things, they want different things, they want different measures. But it's definitely coming back, in terms of funding new startups, and deciding there are ventures worth partaking in. And I don't know if it's because of the Google bubble.
David Krane (Google): I refuse to acknowledge it. [Laughter]
Marooney (OutCast): But there are some really great successes to point to. Salesforce.com. Google. There are actual, terrific successes. And I think that is exciting and motivating for a great number of us.
Barbara French (University of California at San Francisco): From the health sciences and public university perspective, it's actually a very exciting time, because they're realizing really it's not enough to sit on your laurels and do good work. They actually have to get out there and communicate.
Speaking for UCSF, you're having very high-level scientists really coming forth and saying "how do we compete in the realm of communications, help us." I've been there a short amount of time, but I'm learning this is really a brave new world for them, in part being spurred by the UCSF Foundation, which raises money for things like Mission Bay, and turning around and saying "help us. We want to speak on your behalf, and we need the tools to do that."
So actually, from our perspective, it's a very exciting time. For the first time people are seriously [asking] "what can communications do for us?" These are people who previously thought they just needed good science. Now they're coming to us and saying "look at what Harvard's doing, look at what Stanford's doing. How do we do this?" For me, it's very exciting.
Staci Slaughter (San Francisco Giants): What we've done at the Giants, because we have this traveling press corps, and we're in the news everyday, we've never had an on-contract PR agency. It just doesn't make sense. We have to have a staff that fills the news cycle every day.
But what we've really channeled some of our resources into, and beyond our full time staff, is really targeted PR companies, and really doing Hispanic outreach and marketing, and hiring a firm specifically for Hispanic marketing and Hispanic PR. And also in crisis communications, in a very limited way. If we're spending any resources, it's really focused on that specialty where we have an immediate crisis and we need some outside counsel to help us with that. And that's generally where our resources are going.
Krane (Google): I can echo that as well. We're a bit of an anomaly, because the news cycle is as rich as it comes, and there's not a day that goes by when there isn't something interesting to talk about. We have a bias to driving our communications with an in-house team.
But recently we've outsourced work with a specialized or vertical focus. Even telling the pro-active story, our in-house team doesn't have time to do that any more. We have so much coming at us. So we've sourced out some of the proactive storytelling, which I think is the most plum opportunity at Google. We have some very capable media relations people, mostly on the contractor side. We haven't crossed into that larger agency relationship yet. It works very well for us. It's very efficient. That's our model.
Graham (Graham): One of the things that's happening right now, one of things that's changed, is that now there's this sort wake-up call. People are looking very closely at how they spend their budget. And the whole media landscape has changed. I mean everything has changed. People who were doing advertising prior to the downturn have now abandoned their advertising efforts. Now they're looking more at PR. Along with the proliferation of all the media that's coming online, a lot of the consumer-generated media [is] coming online.
So it's a whole new playing field, and I think it's one that PR is very well suited towards. There are a lot of things that are going on now in terms of new models of advertising that almost mimic public relations, which is an interesting terrain for our industry. It's really this hybrid model between public relations and advertising. Advertising now has really started to deflate in importance, and I think PR is starting to inflate.
Hood (PRWeek): Does that actually affect budgets?
Graham (Graham): I think the net impact is that there's more call for PR. Or they're starting to become aware that they might need PR, and they're starting a dialogue, whereas before they might have called their advertising agency.
Armitage (Bite): What I have heard more and more of over the last year is "I'm diverting more money to PR now."
Marooney (OutCast): They're saying "it's [a greater] percentage of my budget."
Hood (PRWeek): Are they saying that? Aren't [marketing] budgets going down?
Curt Kundred (Fleishman-Hillard): We're being cut less. [Laughter]
Angus (A&R): We suck less. [Laughter]
Armitage (Bite): There's now a number of people saying to me on a regular basis "you're now my number one line item."
Marooney (OutCast): We're hearing that too.
Armitage (Bite): One, it makes us feel good. But two, it raises the stakes in terms of you must deliver. When you're the number one line item, you need to show you're delivering on a regular basis.
Marooney (OutCast): And it puts this pressure on you when you hear 'we are abandoning all other communications, and we're just going with PR,' so this has to work.
Hood (PRWeek): On the corporate side, has there been a power shift at all? All the marketing trades, including PRWeek, are preoccupied with what goes on in the agency side. What's going on on the corporate side? Is there a balance of power that's changing?
Slaughter (Giants): It's definitely back to the integrated communications strategy. Because the Giants are in the new cycle all the time, there's a lot of attention paid, both on the PR side of it, and on the advertising side. And advertising has become so much more expensive, and you're not able to target your messages when you're doing TV buys, radio buys, and print.
What we've really tried to shift is a focus to direct communications with our customers, either through talking to the press, or the Giants' website, but also direct e-mails to all our customers. We have 28,000 full season ticket holders, and we can directly communicate with them.
All that gets shifted back to my department, because we're the message developers. We're the people that are crafting the messages that are shaping the image of the organization. So we're in more of a branding mode as opposed to straight retail advertising now. It's all about communication and what our messages are to our customer and to the general public at large. So I think there's a huge shift in balance away from just the advertising side of it to overall communications strategy.
Donovan (HP): I think a good example of this shift, or at least a more integrated communications mix, is what AMD did after they sued Intel. They ran all these full pages ads, after the coverage had happened. It's unusual, and a really interesting move. But back to your earlier question, at HP I think PR and advertising are equally valued. They're seen as valuable assets inside the company.
Landis (Landis): One of the interesting things I think is as the media landscape continues to evolve, and it's doing so at such as rapid pace, the use of blogs or podcasting or you name it, everyday there's something new, and I think "oh my god, now I have learn something new". But PR is more attuned to being able to respond to those forms of technology, because they're content driven, and they're word driven, and they're communications driven. I'm not saying advertising doesn't play a role. It does. And I do believe in the integrated marketing approach. But I think we have this real opportunity to seize. And I'm not sure, speaking for myself, that as PR professionals we've begun to scratch the surface of what that's going to mean in the next five or 10 years.
Berard (Zeno): Do you think that's why most of our work is being driven further upstream?
Landis (Landis): Yes.
Berard (Zeno): You hear so much about framing a story, about the messaging, about aligning the constituencies, the internal, the third-parties. Because if you can sort that out in an effective way, then you can live more comfortably with the anarchy.
Krane (Google): We've organized our entire team around all of these new marketing opportunities. We issue maybe two dozen press releases, if that, each year. Instead we can move the metrics by blogs, by podcasts, by influencers.
Berard (Zeno): I was at a luncheon with the chief privacy officer at Schwab, and she was talking about how agonizing it was at Schwab to try to come up with appropriate policies for if and when employees could blog. Is that a persistent problem there?
Gable (Schwab): It's not resolved, I don't think we've had complete finalized decisions yet.
Berard (Zeno): Is that because there are certain higher standards for a financial services company?
Gable (Schwab): No, it's just a struggle you go through, and you guys know this as much as anyone, the role of an employee and an individual, and where that the line is drawn. And when you're a regulated company there's a whole new dimension to it because the rules make it more complex.
Hood (PRWeek): This market is something of a laboratory for new media, and always has been. But is there anything new coming out of this market that the rest of the industry can learn from?
Graham (Graham): I think there's a great opportunity for the industry, because it used to be everyone thought they could just write a press release. Everyone thinks they can write a release. But that doesn't give any differentiation for professionals. There's no distinction between the person who has never had any experience in public relations and the professional. So with this new terrain, and really learning to navigate that new terrain, it's complicated and it's not easy. And it really gives the PR industry I think, and the professionals in it, an opportunity to use the expertise that we have. I think it's an opportunity for the whole industry to come up to another level.
Landis (Landis): Here's an example with one of our clients who is not in this market, NBC down in LA. When they launched the show The Office, instead of the traditional goal of getting the reviewers to write about the show and get people excited, instead they launched it on Myspace.com. And we asked real people to review the show and talk about their office experiences. I think that is one of the reasons that show has been renewed. I could be wrong. But it was a different approach.
Angus (A&R): We're on the seam right now. This is the seam between the way things used to be, and where things will be in a few years. And we don't know what's going to survive, and what's going to be what we all look at. And I think in that seam, we're finding out what doesn't work, we're finding out what does work, and it's up to us to guide our clients. Every one if my clients is looking for a blog strategy - "what should we do, what are we able to say?"
Armitage (Bite): For years, I struggled with what to say when people asked what do you for living?" And sometimes it was a negative reaction. The problem is that the bar was pretty low. It was just about knowing how to write a press release. Now you have to be able to say to your client "I understand your brand, and I know how to reach your audience." The industry now has a real chance to move up the food chain, because we're appearing more knowledgeable, and adding more value at every stage.
Andrea Burnett (Chronicle Books): For the first time in 35 years we hired an agency. We didn't want a just a campaign; we wanted to build a movement. So we went to an agency to help us with a completely converged program. We're experts at what we do. We're great with the media. We publish over 300 books a year, and the media comes to us. But we didn't have expertise to pull something like this all together. And it was a very successful experience and we learned a lot from it.
Hood (PRWeek): Did you think of other kinds of agencies?
Burnett (Chronicle): No, we only looked at PR agencies, because there's not a whole of a respect for putting money into advertising. We're exploring buzz agents, which are getting popular in publishing. It's about starting a movement, because there's a culture around books now, especially with book groups. We have some best-selling authors that we're actually sending out to little podunk towns to speak to small book groups, because there's a lot of opportunity for buzz
Angus (A&R): Does anybody worry about the effect of all this on the media?
Marooney (OutCast): You said that we're on this seam. But not only are we in this area where media is changing, but also the companies that are going to change it are also being created here and we represent them. Blogs matter, we can represent the companies that are going to be the next blog leaders, and we have to understand it for our established companies. And then you have traditional media, and they're trying to figure out "well, deadlines no longer exist any more, what's editing?"
Kundred (Fleishman): But it's not like this has happened overnight. This has all been transitional. Blogs, I do think they're important, it's about who are influencers now, and it's our job to help influence those influencers. And who are they? And who is the alpha blogger, depending upon the topic, that we're all trying to search for on a daily basis depending on what the issue is and who were trying to represent.
But a lot of this has been, I really think, more transitional. I don't want to downgrade or denigrate blogging or anything else, but I think we make a bigger deal out of things that are really just a transition. Websites were first form of blogging. It wasn't as interactive. But it was stage one. Well, blogging is new, and we're eager to get information out there.
Our job is content driven. It's what John talked about. It's really framing the issues, and getting the message straight. I don't think that has really changed. I think the problem from my perspective goes back to measurement. Wouldn't it be great if we had results reports as opposed to activity reports from an agency perspective - what are the results we achieved that really moved the business objectives? How did it move the metrics of the business at the end of the day?
We have to take it one step further. And I think that is why budgets are not where we want them to be. The other dynamic I'm seeing is we're coming out of a downturn. During the height of the dot-com days, a lot of the power was on the agency side. During the downturn clients could dictate the terms of the agreement. I think what we're seeing is we're on the seem again in terms of how we interact with one another, in that agencies are trying to find the right balance of what we can offer clients. Clients are still trying to find that balance. And we're just at the seam in that regard, to find the right balance in working together.
The weird thing about being a manager of two extremes is how we're going to meet in the middle. That's what we're all trying to figure out. What is the balance, what are these great new technologies, and how do we work together. And the great thing about working here in the Bay Area is not so much the technologies, but the companies we represent and the companies we compete against.
Hood (PRWeek): What about in-house measurement? Has that changed? Are more [non PR] executives demanding accountability?
Burnett (Chronicle): Absolutely. I find that we have to start implementing incentive programs to get more television hits. We have to serve our customer needs too. So if we want to get a big buy from Costco, we need to get a USA Today hit and a [Good Morning America] hit. If we want a big buy from Amazon.com, we might focus on the morning shows. We don't discount anything anymore. Before we might just focus on The New York Times or we might just focus on the morning shows. But now we need to look at everything. How can we reach people on their cell phones? That's what we're looking at; don't just go the traditional route. And we're doing different things with our marketing dollars and publicity dollars. The pressure is on.
French (UCSF): I think that is the value of having come from an agency. So when I got to a place like UCSF, I see a media team working very intensely with science writers and science journalists, and they understand the science, they understand what we're doing there. For example, stem cell research.
So what we're looking for is something Staci brought up. We know the general mass approach. So if we want to target, we're looking increasingly for assistance in how to target. If we have the science down cold and the science writers at The New York Times and Fortune have it down cold, how do we then go into this community of science enthusiasts and scientists in other locations, how are we going to take our work to that level. Or how are we going to talk about the ramifications of curing certain disease to certain demographics.
Sure you can do it through The New York Times but that's one big overshot. The statistics show certain ethnic groups don't get their news from The New York Times. So how are you reaching out, and sharing these discoveries and get them excited about the science, because they're not reading the science publications or journals. That's where I really see the agencies being of value, is helping big institutions know how to navigate in some of these little alleyways that we don't have experience navigating. And you might have the experience because you're developing it for different clients.
Hood (PRWeek): And you want that experience?
French (UCSF): Right, we don't want to experiment with you.
Berard (Zeno): I think we're putting our finger on the four or five factors of what is driving the transformation of agencies. People are looking for people who have experience, who can help them, which essentially means perhaps a more senior, sober, serious set of agency resources. At the same time, clients are putting budget pressure on. Everyone wants their programs measured, but they all want them measured against different things. And an agency has to be able to deliver on those different demands.
So if you look at those pressures on agencies, trying to find and retain senior talent, trying to create the opportunities and flexible financial arrangements with clients that perhaps are more outcome-oriented, as opposed to billing hourly. And then having the combined resources of targeting and measurement, which should go hand in glove, to be able to offer a degree of comfort and confidence that the job did get done. This is one of the reasons why I have sought to avoid publicly held PR firms, because the upcoming quarter was always an interesting time.
Doug Quenqua (PRWeek): I'm hearing everyone talk about changing what you do to provide results. And measurement is huge, it kind of casts a shadow over everything. Is there any feeling that you're so focused on having tangible results, that maybe some of the more subtle, classic PR, where the effects were a little less tangible, [are neglected]? Is there any effect of being so concerned about showing results that maybe you're not allowed to do the things that made you as effective as you once were?
Kundred (Fleishman): I once had a client say "don't even talk to me about measurement. Good PR is like pornography; you know it when you see it." Some of the subtle things we do we know moves the bar. And some things are not measurable. And a lot of what we do cannot be linked to business outcomes. [Former Visa USA CEO] Carl Pascarella, when we pitched the Visa account about a year ago, said "can I pay you on outcomes?" and I said "only if you allow me to control all the inputs." And I think that's really true. We can't control all the outputs. Measurement is very hard, and the subtle things are difficult. And a lot of what we do doesn't change, the tools don't change. The other dynamic I'm seeing is that everyone wants high-level strategy, but they're only willing to pay for lower-level activity.
Hood (PRWeek): But don't agencies over-promise?
Berard (Zeno): Never. [Laughter]
Kundred (Fleishman): When we do, we pay the price.
Hood (PRWeek): I still want to get a sense of in-house accountability.
Slaughter (Giants): What I've seen, as we talk about this integrated communications strategy, what has really been a shift is that we're really not just measured on how we're perceived by the media, or the messages, or which clips are shown. It's also how you can take the Giants' PR machine and capitalize on that for corporate sponsors.
For example, we have an image out that has been a largely positive one. And what has happened is that our sponsorship and marketing departments have been able to capitalize on that and form very unique relationships. We've worked with SBC [Communications] and Fleishman-Hillard ever since we opened the ballpark, and even when we were building the ballpark.
Genentech, which is very low-key, doesn't do very much advertising, does very little PR outside of their world, did a major corporate sponsorship because they realized there was an opportunity there to establish a partnership with the Giants and capitalize on the good image that the organization has. So from a measurement standpoint, from our perspective, and it's a very unique situation, they really see our role as a community partner and the good image that we have as an opportunity for sponsors to take advantage of that and to link themselves with us.
And therefore my job becomes all the more important, that I'm going in and doing pitches to corporate sponsors because of that opportunity. There is definitely a shift in power in our organization. We did a major pitch to a corporate sponsor down on the Peninsula about two years ago, and 50% of the proposal was all about community relations and how that connection to our organization can benefit them.
Berard (Zeno): Who do you compare yourself to? Do you measure yourselves against the [Oakland] A's, the [San Francisco] 49ers?
Slaughter (Giants): The local teams and other entertainment. We're competing for entertainment dollars. We're in a very unique situation. We're like a quasi-public institution. People think they own the Giants, even though we're a privately held company. People think they have ownership over us, because we wear "San Francisco" across our jerseys, and we're part of the community. But we measure ourselves up against the A's and the 49ers and other entertainment organizations.
Donovan (HP): On the metrics questions, the problem with metrics in a company as large as HP is everyone has a different idea of which metrics are important. I think fundamentally, from our perspective, when we make an announcement such as the restructuring announcement last week, other than what is the tone of the coverage, and are the executives happy, is [CEO] Mark [Hurd] happy, probably more importantly, is are our customers happy. Are our customers not concerned? Are we not going to lose business because of this? Sometimes we're so caught up in thinking about clips and getting on the front page , and getting above the fold, and getting a photo in there. But that isn't really what matters, Are we helping our customers to buy from us, so we have another successful quarter, that's what matters
Angus (A&R): The ultimate measurement happens every quarter.
Gable (Schwab): But the difficulty is tying it all to your activities. I guess that's always the challenge. But from our perspective you think about measurement every day, and your try to find ways to measure processes and if you can find a connection to outcome. But like you said, you know it when you see it.
You hope that you have executives who believe in effective public relations. You see more and more sophistication in those ranks of people, in terms of their appreciation for what PR can do. And they do know it's good even if they can't measure it. At the end of the day you run up against a wall when you're asking for more. And if you want to have more input into the business, or more money, or more anything, you're competing. So that's where it gets tough if you don't have some kind of way to connect it to quarterly results or customer satisfaction.
French (UCSF): One of the things I wanted to bring up when you asked abut this market, when I had my own company, I saw an increasing demand from nonprofits for PR. San Francisco is a hotbed of nonprofit organizations and philanthropic foundations. For the previous three years, virtually all of my growth came from the nonprofit and philanthropic sector. That was driven by Sarbanes-Oxley. It was driven by a need to know how to respond to a crisis, and how to fight for dollars.
On the foundation side, they're looking to target their market, and driving results among, say, low-income neighborhoods. They wanted to know how to do that, and reach out through community relations. This thriving nonprofit sector was the most rewarding part of my work.
Landis (Landis): I would also agree with that. One of our biggest growth areas is nonprofit or philanthropic work. Or on the reverse side, big consumer clients, a company with a connection to the community like Whole Foods. They're either doing business differently, or they're nonprofits who really understanding that they have to do business differently. That's where we're seeing growth
Hood (PRWeek): Is it important for companies here to show a commitment to the community?
Landis (Landis): Absolutely. It's a necessary and integral part of every campaign.
Hood (PRWeek): How does that play out?
Angus (A&R): The most powerful motivation we have for our employees is to let them get together and do things for the community. They join up and become friends and feel like they've done something together beyond the press release and the pitch. It's critical for employee morale.
Landis (Landis): But it's also important for customers. I guarantee you one of the reasons why Whole Foods is doing as well as it is, is because their customers know they care about the health of their customers, and they care about the community. They donate a certain amount of proceeds every month, That's why those customers go there, and that's why that chain is growing. And Safeway can't make the same claim. Is it just this area? Whole Foods is expanding all over the country. So I don't think it's just this area.
Berard (Zeno): Don't you think Whole Foods and others like them had an affect on Safeway rethinking their branding, and their "Ingredients for Life" marketing campaign?
Landis (Landis): Their customer is different than the Whole Foods customer. I don't know what they went through to get to their campaign, but it looks like they're copying the elements without understanding the customer.
Berard (Zeno): Ten years ago it was smart to say corporations were learning from politics, about how to run campaigns. And there was a sense of urgency toward the deadline, an election-type deadline. But to your point, Barbara, one thing companies have learned from nonprofits is that authenticity is really the best defense that you have against being misunderstood. Nonprofits come at that naturally. They can lose it the way the United Way did. But they come at it naturally. Companies I think are now looking for what is authentic about themselves. And that is becoming a big part of our communications.
Marooney (OutCast): The most successful companies we represent have a foundation angle. And they very much have to echo that tone as a company. And when you do communications, it's about sales, it's about employees, and philanthropy is becoming a very important part of that package.
Berard (Zeno): Culture trumps everything.
Hood (PRWeek): What about the Google Foundation?
Krane (Google): We have a really interesting perspective on this, and it's challenging from a communications point of view as well. We filed to go public a year ago, and we indicated in our founder's letter that this is something we intended to pursue, that we were going to dedicate significant assets to it, that it was going personify everything Google means to us. It was going to change the world. We have yet to really organize to a point where we can be communicative with any detail about what we intend to do. It's a bit unfortunate.
The challenge from a communications point of view is we want to be calculated about how we do this. We want to make sure we get it right. At the same time, expectations could not be higher. It's really, really difficult. When you talk about voice and identity and consistency of brand and image, this is a tall order. The hot job at Google is to be the executive director of the foundation, and we cannot fill the job, because the DNA set doesn't exist yet.
Hood (PRWeek): How difficult or easy is it to hire? What are you finding out there? Has talent fled the market?
Armitage (Bite): We're still suffering from the downturn, and a lot of people moved away. A lot of people left, so we're seeing a bit of a black hole. But if you're offering good packages, if you're offering a compelling culture, if you're offering interesting clients, it will attract people. Coming from the UK to here two years ago the thing that surprised me is that people will keep in touch. People keep their networks, and that is very important for finding talent. But it's still patchy.
Landis (Landis): It's very hard. I have to thank Andrea, because I hired one of her people. And I hired one of Barbara's people too. The hardest thing for us in this region, the housing costs and the cost of living is so out of whack. It's higher than New York, I'm sorry. So for a small agency, or mid-sized agency like us to hire the talent we need, we need to pay these really considerable salaries. And then you look at the budgets that the clients are coming in at, and they're saying, 'well we want you to do it for less.' So for me, it's a huge struggle because most of my money goes toward salaries, as it should.
Kundred (Fleishman): I agree, but it also depends on what area. Life sciences and biotech people are hard to find. Those people are hard to find. And in terms of getting people to move here, in all honesty, you wonder if they're crazy, the folks that want to come here. Do they understand what they're getting themselves into? I've found it hard to recruit into the Bay Area. It was easier when there was the promise of the dot com millionaires. Only a few of us in this room have had that fortune. When that lure was there a few years ago it was easier.
Landis (Landis): But I think the lure is the quality of life. Even though it is expensive, there really is no other community like the Bay Area. I guarantee you, if you ask people where they want to live, it's probably either New York or San Francisco. So it's really about finding the person who wants to live in a progressive, interesting place that is a laboratory, that is a confluence of health sciences and technology and the arts and nonprofits, and has a hundred year history of being open-minded and progressive.
Hood (PRWeek): Is there any stigma from the dot com bubble bursting? Isn't there a little scar tissue over that whole era?
Landis (Landis): Yes. We are hiring people who live here. We don't hire so much from outside the market.
Kundred (Fleishman): There's scar tissue on the part of the employers. We were taking a risk when we hired. Back then it was "I can take a nurse and teach them how to be a PR person." That didn't work out so well. [Laughter]
Armitage (Bite): I realized how bad it must have been when I arrived here, and I rented a car, and the guy asked what I did. And I said I work in PR, and he said "oh I used to be in PR too." And I said "really?" And he said "yeah, yeah, but it didn't work out. I got laid off after a month." He had worked for a big brand agency. And he said "now I'm doing this, and it's probably a bit more taxing than what I did before." And I thought, "wow, if these were the kind of people being hired then..." He was a nice enough guy, but clearly wasn't intellectually capable of doing the work I hoped we were doing.
Hood (PRWeek): But the standards are higher, aren't they?
Kundred (Fleishman): Now they are.
Angus (A&R): It's the biggest inhibitor to our growth. Could you grow with more people?
Marooney (OutCast): But we're not going to hire the car salesman.
Angus (A&R): We can't find enough people to grow. We're facing a crisis in this business when we can't find qualified candidates. And the schools aren't turning out people that are qualified, with the basic ingredients.
Marooney (OutCast): No one can write.
Landis (Landis): No one can write. Thank you.
Angus (A&R): How do we get our educational system to the point where they can start supplying us with some more qualified job applicants that we can then teach the trade to?
Landis (Landis): We need to raise taxes. As a far leaning leftie, we need to more tax money, and we need to support the school system, because it's not doing it. Especially in California where Prop. 13 decimated the school system. We were number one. What, we're number 42 now I think.
Marooney (OutCast): Maybe this is all of the PR firms' group philanthropy activity.
Landis (Landis): I do think we do need to do something, because when people have a four-year degree from a prestigious school, and they cannot write a sentence, it's pathetic.
Angus (A&R): It's a curriculum issue. The schools are still teaching the old stuff. We need the new stuff.
Landis (Landis): It's also a technology issue. These kids rely on this conversational e-mail style, where it doesn't matter if you punctuate, it doesn't matter if you spell the client's name correctly.
Marooney (OutCast): Capitalization.
Landis (Landis): Capitalization, right.
French (UCSF): Is it the image that anybody can do PR? Is that why we're seeing a type of person who is out there job searching and says "well, I'll just go do PR." Maybe part of our effort is we have to do a better job communicating what the skills are to do our job. But in terms of talent, one thing in terms of looking for senior talent, one of the things I've been frustrated by is trying to find that mix of person who has a range of experience.
I think someone who can come into an organization and bring different backgrounds and experiences, someone who well-traveled, and maybe it's because I'm an old newspaper person, but you like to see that liberal arts education. Someone who knows their way around situations, someone who can talk to the receptionist on the way in and then on the other hand that afternoon schmooze with CEOs and scientists. It's that person who is well-traveled, has experimented with different things, and has had different experiences, and can show success and results.
I can't tell you the number of people who just come in and put their resume down and say "well, hire me." Well, be a little enthusiastic. And that's what frustrates me, this lack of being hungry, and showing and demonstrating talent and skill. When someone walks in and does that, you perk up. It's refreshing.
Angus (A&R): The one good thing the bust thing did was destroy the sense of entitlement. People now realize they need their jobs, that they are not entitled to their jobs. They need to work to keep them.
Landis (Landis): I agree with you.
Kundred (Fleishman): The mid-level folks, who started during the heyday, the entitlement is still in the back of their minds. For a while, there were the junior folks who had to work to earn their jobs, they had to go out and interview, they felt lucky to have their jobs coming out of college. And they really worked hard, and they almost passed mid-level folks in their way of thinking and their whole approach to the work.
Krane (Google): Many problems Google deals with are specialized, and the first of their kind in many cases. And it's difficult to sit across from a potential team member and ask, "have you worked on a product that has been proposed to be banned in California by a state senator? No? You're out. Have you had problems with the Chinese government and succeeded in conquering those via communications? No? You're out." So we're faced with examples of many things people have not experienced, our in-house team included. So we're always looking to hire people who are smarter than us, who are better than us, who can challenge us, that inspire us. We're dealing with a problem set that has not been traversed by many.
Kundred (Fleishman): That is the opportunity that is unique to the Bay Area, that you have companies like a Google. A few years ago we were working on copyright and free speech on the internet. These were very unique, first of their kind issues, so a person with just a few years experience could be very senior in other markets. To me, that was the magic that technology and the Bay Area offered you. You could learn a unique skill set at a young age.
Berard (Zeno): But that's not any different than its ever been. If you think about coming into the work force in the mid-1970s, and what one did to establish an identity in a company. You took on tough assignments, you went the extra mile, you listened hard, and you continued your education on the job. I can see those qualities in people who are 22 now just as I'd like to think I saw in myself when I was 22.
Kundred (Fleishman): It's not the work ethic I'm talking about. What was magical about this place, and is still magical, is the opportunities people are given. It's the business model. It's the technology. It's something completely different. And they are making it up as they go, and hoping you make smart decisions. And when I came to Silicon Valley in the 1990s, that is what threw me.
Armitage (Bite): If you drive [Highway] 101, there are more world-class companies on this stretch of road than there are in the UK. It's phenomenal. You see so many great companies here. Just look at the opportunities the Valley offers. In our office, the turnover is pretty good. We don't lose a lot of people. I think what they are looking for is the excitement of working with great brands in a dynamic environment. And our business in the UK, we're losing more people than I would like. People are saying that it's tough in this industry, tech has gone through a downturn, the environment is not as fun as it used to be, budgets are under pressure. So we're losing people there, because there isn't the glamour of being right in the hub of Silicon Valley.
Gable (Schwab): We've been relatively stable, so we haven't faced the same kind of issues. We were talking about this sense of entitlement. But there's our own sense of entitlement that we should be getting best and brightest. We need to flip that on it's head. So what are we doing as an industry or a profession to make this an exciting place. Are other industries getting people who aren't qualified? We need to turn that around. Is there something about the way we structure our business? Is it the opportunities we're giving people? There are good people out there. It's a loser's game to say 'the problem is not ours, the problem is the education system or people's jaded perspective.' How one solves that I don't know.
Landis (Landis): Do people around the table think people don't choose PR because they don't see a future, or they see a future with a cap, or glass ceiling? I worry about that. Public relations can be a great business or great career, and have a lot of opportunities. But there are people who would rather come up with the great idea, the next Google, and take it public. Why should I toil in an agency for 20 years? Or I'm going to be a lawyer so I can bill $300 an hour minimum straight out of college and make a lot of money. I'm curious to know what is the sense of that. Is that inhibiting our ability to get good people?
Slaughter (Giants): I think that has always been the perception of PR. I don't think that's a current phenomenon. I get more resumes coming across my desk, and they're all majoring in PR. Well how in the hell do you major in PR? You can't major in PR until you actually go and do PR. You can major in English. I think all PR people should all be rhetoric majors. That's what you really learn at school.
And getting back to Barbara's point, when I hire someone, which is very rare because we have little turnover, 80% of what I hire on is based on personality. It's based on how they click with the rest of the team. Our industry is doing people a disservice when they're saying 'major in PR,' and then you go to a PR agency and expect to get hired because you majored in PR. You need real world experience, whether it's working at the Gilroy Dispatch as a writer or doing other types of things, that's much more effective, and those are people who are the successes of the world.
Marooney (OutCast): I couldn't agree with you more.
Graham (Graham): What makes it so challenging to hire in PR is that the skills are so diverse. If you look at advertising, you have the creative people on one side, and the account people on the other. In PR, creative and account are all wrapped up together. It takes a unique set of skills.
My biggest challenge on the manager level hasn't been losing managers to other agencies but losing them to other regions of the country. Particularly when they get married. That's the big rub. What happens on the manager level, the minute they get married, the dream of the house comes in, the first kid starts to arrive, or the dream of children starts to arrive. And it's hard to afford that kind of lifestyle here. And they look at the Midwest where everybody has huge houses and gigantic yards, and they belong to the country club and the golf course on the same salary. That's my biggest frustration. I lost two managers who were terrific.
Landis (Landis): Maybe we need a PR campaign to shift the American dream to the condo in the city. [Laughter]
Gordon (PRWeek): What's it like working with the local media?
French (UCSF): We lamented the loss of a two-newspaper town. But then you look and see a whole burgeoning field of ethnic media, and it's wonderfully diverse. It's a wonderful opportunity here. And for PR professionals if we're overlooking ethnic media, we're overlooking a huge segment of the population.
Krane (Google): My observation is we've heard very elegant descriptions of how rich and fruitful this area is, and the narrative to be told here is unlike many other geographies. And I personally feel that the two papers we organize our local media relations around are missing the opportunity. I'm completely under-whelmed by the business sections of both papers. I'm completely under-whelmed by the story selection for A1. I'm completely under-whelmed by outreach that we receive on community level issues and personnel level issues. The story we have to tell is so much bigger than what the appetite appears to be. It's a major disappointment.
We would much rather spend resources online or with The New York Times or [The Wall Street] Journal or with the [Financial Times] for example. As an international company, we will devote our resources to the international media higher up on the priority scale than with local media. One of them does a much better job than the other one but they're still both abysmal.
Angus (A&R): I'm worried they won't survive. We have a real crisis in terms of the media. Without the media, we lose a major audience, and society looses a major voice. They're economically challenged, and they don't have the quality of people they once had to follow the stories we want them to follow.
Landis (Landis): I think that there was such arrogance for so many years with papers like the [San Francisco] Chronicle, They forget that they needed to recreate their business model as technology advanced. And they are now kind of eating humble pie, because people are now getting their news online. They're getting their news from Google. They're getting their news from The New York Times. The New York Times swooped in and took a huge chunk of their audience. Craigslist almost took all of their business from the classifieds. And they don't know what to do. They're still a bit of a dinosaur.
So I agree with you that they are in danger if they don't figure out how to get with the times and get on the bandwagon, they're going to be left behind. That being said, there still is a reason to work with them. They still have a voice, especially if you're working with community organizations. I agree with you Barbara that the ethnic media is important. But the Chronicle is an important paper. It is the biggest paper. The Mercury News is important. Are they the papers I'd like to have in this market? No. I wish we had The New York Times or The Washington Post.
Other than [Phil] Matier and [Andy] Ross [of the Chronicle], we don't have any entrepreneurial reporters, on either paper. It is a sad state of affairs. But I still think we have to work with them, and I do think we should try to make them the best as they can be, because without them, we and our clients are not going to be successful.
Kundred (Fleishman): In the 1990s, we were seeing a lot of influx, a lot of our national clients were asking the local San Francisco office to broker relationships with the Chronicle or the Mercury News. That really dried up. As a national agency, we're not getting calls from clients in New York or based out of other offices asking 'can you broker the relationship with the Chronicle.' I think they feel like they checked the box with The New York Times and The Wall Street Journal.
Marooney (OutCast): We have gotten [clients] to ask for the Contra Costa Times. They've gotten more specific. They want [The New York] Times and they want [The Wall Street] Journal, and then they want the Contra Costa Times. It's amazing how that has happened.
Burnett (Chronicle): I bought a house in the East Bay about two years ago. And I watch what people are reading on BART [Bay Area Rapid Transit]. And I've noticed trends. More people are reading USA Today. Less people are reading the Chronicle. A lot more people are reading local coverage. People are reading the [San Francisco] Bay Guardian, SF Weekly. So I've been telling my publicist 'stop focusing on the Chronicle, and start focusing on other publications.'
Krane (Google): I think it's such a tragedy that for years the most celebrated technology and product columnist [Walt Mossberg of The Wall Street Journal] has based himself in Washington, DC.
Marooney (OutCast): And yet we have to go to him every time.
Donovan (HP): And that's why it's so pathetic. The coverage is so bad. They're coverage of us is mixed, but it's embarrassing they don't have better coverage, and a deeper bench of reporters. And I know it's all financial.
Krane (Google): Why aren't they blogging? Why aren't they doing other creative things they can do as individuals, not necessarily as employees for their organization. The Mercury News finally started blogging. Look at Tom Foremski, who was hidden at the [Financial Times]. Look at where he is now with [his blog] Silicon Valley Watcher. It's important. It's influential.
Hood (PRWeek): What about other bloggers who are still with publications?
Krane (Google): Take the Mercury News for example [Reporters] Mike Bazeley and Matt Marshall have a blog. SiliconBeat. It's alright. These guys can cover more news than the paper actually gives them real estate to print, which I think is great. It's a signal back to us that they react to what we're saying, they give us feedback, we understand how they receive and interpret our news. And it creates a bit of a community, and people can comment and react as well. We don't expect to see everything in print, but it's nice to see they've extended the opportunity.
Landis (Landis): I think SFGate.com does a good job. But here we have an international company like Google based here. What's our international news like? We're on the Pacific Rim for God's sake. Look at all the cultures that live here. There should be major international news in both the Mercury News and the Chronicle. We should be seeing what happens in China, because that affects our economy, and the UK, because that affects our economy. But we don't. We get wire service stories.
Marooney (OutCast): It's about economics. They're all cutting costs.
Berard (Zeno): But if it's not meaningful to you, if it's not about what you want to know about, then you're not going to pay attention to it. Personally, I think the best daily read for me is the first six pages of the Examiner. It's all pointed and local. We talked about authenticity earlier and companies telling stories, what's meaningful is what matters these days, and the media has had a hard time with that. They didn't invest when they had the money. Perhaps they were shortsighted. Or perhaps they weren't allowed to. And now it may be a little too late for many of them. Certainly the Chronicle is suffering mightily.
I think it was the Journal that ran that story recently about the Lawrence Kansas Eagle, essentially moving everything online, to create a sense of community they hope they can monetize in some fashion. It's a struggle. Newspapers are companies, and companies are all striving to figure out how to make that meaningful link between themselves and their customers.
Landis (Landis): But interestingly enough there are two examples locally that do a great job. One is the San Francisco Business Times. And they are very involved in the community, and sometimes they scoop the Chronicle. And San Francisco magazine, as a regional magazine, has done a great job rebuilding and revitalizing the regional magazine for its audience. I'm old enough to remember when TV came around, everyone said radio was dead. Radio is bigger than ever now. Print is not dead. It's never going to be dead. It just needs to reinvent itself, and there are some shining examples in this market of that.
Number of employed Bay Area residents: 3,421,100
Bay Area's 10 largest industries by employment
Professional and business services: 520,400 (15.2%):
Government: 458,000 (13.4%):
Manufacturing: 358,000 (10.5%):
Retail trade: 333,200 (9.7%):
Leisure and hospitality: 305,000 (8.9%):
Health care and social assistance 283,400: (8.3%):
Financial, insurance and real estate 215,400: (6.3%):
Construction: 179,000 (5.2%):
Wholesale trade: 125,300 (3.7%):
Information: 112,000 (3.3%):
Number of unemployed Bay Area residents: 174,000
Bay Area unemployment rate: 4.8%
Source: Bay Area Council
Bay Area's top 10 public companies, based on revenue ($ in millions):
Wells Fargo $33,876
Cisco Systems $23,579
Gap Inc $16,267
Source: San Francisco Chronicle, May 6, 2005
Total Bay Area population (2000): 6,783,760
White: 3,941,945 (58.1%):
Asian & Pacific Islander: 1,324,880 (19.5%):
Hispanic: 1,316,140 (19.4%):
African American: 510,749 (7.5%):
Native American: 42,711 (0.6%):
Other race: 626,319 (9.2%):
Two or more races: 334,385 (4.9%):
Male: 3,378024 (49.8%):
Female: 3,405,716 (50.2%):
Language other than English spoken at home: 2,447,724 (36.1%):
Foreign-born: 1,856,791 (27.4%):
College degree: 2,517,528 (27.1%):
Living in poverty: 582,433 (8.6%):
Source: 2000 Census of Population, US Department of Commerce