ANALYSIS: Companies stress branding for eventual hi-tech rebound

As companies eye an end to the current hi-tech downturn, Andrew Gordon finds most PR pushes are eschewing tech talk to focus more on branding and customer needs

As companies eye an end to the current hi-tech downturn, Andrew Gordon finds most PR pushes are eschewing tech talk to focus more on branding and customer needs

The end is coming. Maybe later this year. Maybe next year. But sooner or later the hi-tech downturn will come to an end. And PR is preparing for the end with a shift to more long-term campaigns that accentuate the big picture and brand value. IDC recently reported that 85% of companies in the US, Asia, and Europe expect to increase or maintain their IT spending this year - though admittedly, that's from a very low base, and in February at the World Economic Forum, the likes of Bill Gates and Michael Dell couldn't foresee much good news, or a recovery this year. But even the hint of an upturn has many hi-tech companies focusing on putting themselves ahead of the curve, so that whenever the recovery occurs, those companies will already be top-of-mind for IT buyers. "You have to have technology, and you can't get past that," says Lydia Whitefield, VP of corporate marketing and communications at Avaya, which just hired Hill & Knowlton to develop some far-reaching PR strategies. "But you have to say what the technology can do for you. I can't buy the promise of technology. Even though capital spending has been curtailed, now's the chance to talk in a more uncluttered environment about the brand promise. We're talking very specifically to our customers through the trade press. This is not the time to go dark. In this kind of economy, PR is a lower cost, more effective way of communicating than advertising." Shifting PR strategy The idea at Avaya, and so many other companies, is that focusing not on speeds and feeds, but how the technology can help customers do their jobs better, will place them top of mind for IT buyers, instead of trying to woo those buyers at the 11th hour after their budgets increase. Such PR strategies are typical in some hi-tech sectors, particularly by those companies that see an opportunity to grab some market share, says Jeff Loomis, president and CEO of the Loomis Group. So when spending increases and buyers are ready to buy, "half the sale is already made," says Loomis. "It's brand PR, and it's a very, very smart thing to do," says Albert Durig, chairman of Burson-Marsteller's tech practice. "Those companies that are doing it are leadership companies in terms of boosting and building the brand. But not everyone does it, with so many focused on making numbers." "Any size company can do this," concurs Brodeur Worldwide CEO Andrea Carney. "You can have a small company that is a leader in their niche. They just need to do it in their own scale." But not everyone can do it. The larger companies have an advantage, says Loomis, though he works with many small companies that have gone after the "big boys," and that investment has paid off. "You have to deliver on the promise of these awareness campaigns." If Andrew Carothers, marketing communications director at Evolve Software, had the PR budget to launch such a campaign he would. But he doesn't, so he can't. "A real branding campaign takes both time and money," he argues. "Only the 800-pound gorillas can afford to do that. You can't brand yourself overnight. This is an opportunity for the rich to get richer." Evolve develops service-delivery software, part of the enterprise-software sector. This is an area that PeopleSoft is starting to explore. PeopleSoft isn't known for developing this kind of software, but it does have strong brand awareness, and will sell this software to the same customers it sells to now, says Carothers. He notes that already strong brands, such as PeopleSoft, start with an advantage, even if moving into a new field. Citigate Cunningham VP Bill Bennett agrees, and adds that Dell's recent announcement that it will move into the printer space against Hewlett-Packard would be an insurmountable task for anyone else. But others believe that smart planning and spending can enable any company to launch such a campaign. "For anybody that spends anything, they can get a lot of bang for the buck," says Durig. "It doesn't have to be expensive. It has to do more with strategy and execution. It's about a multi-tier media strategy. There's not much competition out there right now for this. Now's a great time to do it." Oracle has been doing it for the past few years. VP of worldwide corporate communications Jim Finn has been building his PR team since he joined nearly two years ago. "We have sought to keep a balance between product and reputation. It's not just about the CIO who's looking at IT budgets. Trust and credibility is our mission and focus. The age of hype is over." "Credibility is so critical to all organizations, no matter their size," says Fitzgerald Communications CEO Maura Fitzgerald. "PR delivers that, while advertising doesn't play that role. You have to support the business plan with communications. No board is going to let people spend money that doesn't support the business plan." Preparing for the long term This kind of long-term PR is part of the reality that you can't slash budgets forever, nor can you not spend money to upgrade IT infrastructures, says Aedhmar Hynes, CEO of Text 100. "Any company not thinking of positioning itself is crazy. PR should not be focused on the short term. We need to take a medium- to long-term perspective. PR is not a quick fix. It has to be hooked into what drives the fundamentals of business." Paul Rand, director of Ketchum's global tech practice, agrees that people can't sit on their IT budgets forever. Companies will have to upgrade their IT infrastructure soon, and after three years of a tech slump, and all that pent-up desire to replace antiquated IT systems, the dam could soon burst. Long-term PR is a sign that companies are finally recognizing the need to upgrade, says Rand. Such movement also signifies an effort to reconnect with customers. "The days of pushing purchases down the throats of customers are over," says Matt Wolfrom, SVP at Euro RSCG Middleberg. "You can't underestimate the value of the customer. Those who succeed get closer to customers and understand them better." Recent campaigns by HP and Cisco reflect that. Both focus not on their companies' technology, but what customers and potential customers can do with that technology. Other companies striving to position themselves include Roxio, the CD-burning software company that is trying to be seen more as a digital media company, than just associated with CD burning. VP of strategic marketing Scott Steinberg says no one in the PC market offers a suite of digital media software for music, movies, and photography. The closest example is Apple with iLife, its digital media software bundle. So Steinberg says the time is ripe to reposition itself as the premiere digital media software company. Likewise, Real Networks is focused on branding to build its b-to-b business, particularly its latest servers that enable rich-media developers to keep different media formats, such as Quicktime or Windows Media Player, on the same server. "The human response at times like this is to hunker down," says Waggener Edstrom EVP LeeAnne French. "And that is the wrong thing to do. Many, many companies have suffered, because the trust and confidence of the customer has degenerated. And going dark only fuels people's anxiety. If you have aggressive competitors, they won't hesitate to step in and fill the silence with their messages." So it's back to the basics, argues Sabrina Horn, president of the Horn Group. "Companies are looking for nuts and bolts PR, not fluff or fat. The people we're talking to have a long-term view. Last year the long-term view was six months. Now it's 12 months. We are seeing a bit of a change. Things are warming up a bit. But at times it's like watching the grass grow."

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