This year, PRWeek will visit eight cities where an industry close to that respective region will be discussed. For each event, leading PR pros from a variety of firms, companies, and other organizations will gather in a roundtable discussion about the issues affecting them and their peers. Keith O'Brien and Aarti Shah were in San Francisco to discuss the technology industry.
Dealing with the recession
Keith O'Brien (PRWeek): Despite the recession, what are the opportunities for the technology sector?
Bob Angus (A&R Edelman): I'm not sure we've seen the [recession] here yet. Hopefully we don't. The tech sector usually lags in terms of recessionary tendencies [as opposed to] the rest of the country. But I think if we do see recessionary tendencies here, I think our profession will have a tremendous role in helping our companies through that because we're great at demand generation. Demand generation will give them better share of market and hopefully they'll be able to weather any storm that might come along.
Ryan Donovan (Hewlett-Packard): I'd be willing to bet that [with a] recession or not the role of social media in communications [won't] die down. The blogosphere is not going to die down simply because the market slows down. So there is a huge need for companies and [firms] to continue to engage that community and make sure they monitor and participate in those conversations. There [will] always be a need for that.
Karen Kahn (Sun Microsystems): Traditional PR is getting completely redefined. I won't say it's dying, but I think people need to get with what's on the cutting edge, in terms of building communities and starting conversations— as opposed to that traditional one-way dialogue. I think the recession is really scary for companies like Sun and Intel. We're all looking at emerging markets, but I do think what [will] be most interesting is going to be in the social and community-building realm.
Donna Sokolsky (SparkPR): We took a look at what professional money managers and hedge-fund managers were doing at the start of the year. It was interesting to note that in both Europe and the US they are quite bullish on tech because they're really not confident in putting their money elsewhere. It goes to what everyone else has been saying— tech does seem to be doing well for now and it is a lag indicator. But, so far so good.
Paul Bergevin (Intel): Tech is less exposed to the vicissitudes of the financial sector. If you say recession, you have to be very specific about which parts of the economy are doing well and which are not — it's very uneven. The companies that are more global-facing in addressing global market needs— the HPs and Intels — certainly look at that as a way to continue to drive innovation and satisfy demand on a very global basis.
Sabrina Horn (Horn Group): I'm based in New York — one block from the [NYSE] — and the heads are down there. The sheer impact of the negative psychology of this dark cloud in New York — the Bear Stearns news on the heels of the Spitzer news — will travel to the West. But I come off the plane out here and it's just like people are handing out money. It's like there is no recession.
On the agency side, if it does impact us, it will be in longer sales cycles. A recession is an excuse for people to delay a decision or not make a decision to work with an agency. For midsize firms like us - having an integrated [approach] - doing more than just PR and doing digital marketing is important.
Tim Dyson (Next Fifteen): It is a danger that we consider all recessions to be equal. I think this recession — if it is a recession — is very different from the one the last time around, especially for the people around this table, [who] were the people on Wall Street six or seven years ago.
We were right in the front of the boat with the waves crashing over us. It was a pretty miserable experience. Now we're in the back of the boat and there are a bunch of accountants, bankers, and real-estate people at the front and they hate it. We've been through it before and it's not quite as bad. I think you'll see some very different reactions from this group this time around, partly because we've been there before. I think agencies, in-house [communicators] are all going to react very differently in the tech area this time because last time around everyone didn't quite know how to deal with it – partly because the companies were staffing like crazy, spending like crazy. This time around they haven't done the same thing and some of them are still having to grow incredibly quickly — companies like Facebook are exploding as organizations. Most tech companies haven't been on that ridiculous spend and hire frenzy that they were the last time around. So I think it'll be a different experience regardless of what happens.
Brandee Barker (Facebook): It's also hard to predict that we are going to be there, although the dark cloud is looming above us. But it also seems there is tremendous opportunity forming with organizations — Kleiner announcing a new fund for applications built on the iPhone and Bay Partners throwing out millions of dollars for companies building applications on sites like Facebook, MySpace, or any of the other social sites. So I think the opportunities [will] shift a bit. Certainly the agencies in the Valley can go after that as great revenue.
Rich Cline (Voce): I think there will be a softening of the market eventually. But in this case I don't think it will be a general softening. And it'll depend on the company more than ever. And there are companies at this table that are a lot better prepared than others will be. So I think there will be an impact but it will depend, like you said, if you're a global-facing organization and you're geared towards other markets to withstand. There are emerging companies that aren't Facebook and don't have that driver, they are going to experience some drying up on the wells and that's business. So I don't see anything treacherous but I do think we need to be very smart.
Luca Penati (Ogilvy): I don't see any recession right now. However, if there is going to be an economic downturn I think we need to define what that would be because there are two kinds of technologies that are very different. I think this recession would probably be a consumer-led downturn, so consumers will not spend money on gadgets. But on the b-to-b side, I don't see any recession because companies will need to stay ahead of the competition. So they will invest in technologies to give them the competitive advantage. So as PR professionals it's all about giving a competitive advantage to clients – what that competitive advantage depends on the sector you are. It could be social media, digital, it could be anything that would give companies the competitive advantage. Finally, as people have said global companies will get more of the emerging markets. That's why I'm so excited to be responsible for the global technology practice – our offices in India and China are just growing like crazy.
O'Brien (PRWeek): It seems like agencies are being very thoughtful about the clients they add and how it fits into the overall roster. Are any of you on the agency side are you thinking far ahead and strategizing what a potential downturn would do to each of your clients?
[Audience says “of course” in unison]
O'Brien (PRWeek): How much?
Dyson (Next Fifteen): Everyone around this table started doing that six years ago. That was the thing that did not go away after the last time when you were stupid and you didn't do that. You don't make the same mistake twice. You just can't afford that. But that doesn't mean you'll get it right though and that's the part where you do look at which VCs are funding these guys, how much do I trust their track record. You're not really looking at the VC firm, you're not really saying it's Kleiner, you're looking within Kleiner and saying which partner because some of the partners are better than others. Is that person backing it? Ok, they have a good track record. People are a lot more granular than they once were and I wouldn't say it's new behavior. I would actually argue most of the agencies around learned a very hard lesson last time and do not want to be hit with that big, wet fish again.
Sokolsky (SparkPR): We're looking to diversify, not only within the US but abroad, so that 50 % of our new business comes from outside of the US. So we've looked across the entire spectrum of technology companies and financial companies for what is the best in the world, not just what's big here in the US That's been really helpful because we're seeing amazing stuff come out of Eastern Europe or Sri Lanka and other places.
Penati (Ogilvy): As Tim pointed out, as agencies we had to look at what are the hot industries and what are the industries that will do well during a recession. As agencies we need to look at the spectrum of opportunities. It's all about prioritization. It's all about matching the skill-set, the things you have, and the opportunity a company can give you as a brand. But you're always juggling so many things.
Horn (Horn Group): There is so much interest in our employees to work with Web 2.0 companies. And that's a lovely bubble and there will be some winners and probably more losers. So you have to temper the interest in Web 2.0 companies, when so many of them are features that belong inside something else. So we're looking at other markets like clean tech and alternative energy which is a bubble that will continue simply because of the guilt factor. And [it] will have a long shelf-life. But you really have to do your homework and your due diligence as to who you are investing your time in.
O'Brien (PRWeek): Are there delineations within the agency in which interest in working on certain accounts is based on demographics? Do younger staffers prefer to work on different brands than older staffers?
Cline (Voce): We try to focus on the opportunity because it is a natural phenomenon to have someone say, ‘I know this company, I use it, I want to work on that.' And then you'll say, in reality the job on that is not as good as the job on this — even though you know the company. This one is the bigger challenge, there is access to the executives, there is more strategy, and it's a really interesting campaign that we're putting on – even though it might not be pervasive with your generation. Once you get that a couple of times and really start training that, it has a profound impact on how you work because then you're not juggling as much brand nirvana and it's more about the project.
Angus (A&R Edelman): There is a lot of matching going on. People have interests in different things. I'm surprised at the number of young people that come in and want to work on infrastructure, or switches and routers, and those that want to work on clean tech. If you can find a right match that really strikes people's soul then they tend to be passionate about the subject if you've got the luxury to match. We try to do a little bit of matching for everybody, everybody gets to work on one passion project and everybody works on one that might be a little less of a passion. But that gives a nice mix that keeps people energized.
Sokolsky (SparkPR): Especially right now it's really important to be well-rounded because we are starting to see the pendulum swing. The Web 2.0 is starting to reach its peak and the VCs are starting to invest in more innovative, deeper technologies, and I feel as though I wouldn't be doing my job properly unless I was giving everybody the training so when they walk out of Spark three, four, or five years from now and they haven't worked on clean tech clients or venture capitalists – we've really done them a disservice.
Dyson (Next Fifteen): PR is supposed to be about more than media relations, but for a heck of a long time it hasn't been. [Silicon] Valley has been in love with media relations for a long time because it's an incredibly efficient form of public relations. But I think the other thing that is rearing its head thanks to social media is suddenly people are looking at different sectors. They have been exposed to using different techniques and the client is willing to pay for it. The clients previously weren't willing to pay for anything other than a headline or a great photograph and great quote. But now they are saying, ‘There is some pretty great stuff you can do directly with customers' and that's pretty [attractive] to young people. If the client is really interesting – that's great – and that used to be how you could get people to do great work because they loved the technology or that particular sector. Now get people who really love the techniques involved in social media and that's just as attractive to them. They can be passionate about the particular customer sector but they are so inspired by how they might use Facebook or Google products to get the message across to the customer and that can be just as compelling to them.
Barker (Facebook): I've been aggressively recruiting for quite awhile to grow my team. There was a time in my career that I really looked at candidates for communications backgrounds or journalism skills and writing. I still think there is a lot of value in that but someone who can come in and tell me how to use Digg, comments on blog, Facebook beyond just using Facebook for looking at photos, and Twitter and all the other social media and Web 2.0 technology – that is a skill that is so valuable now.
O'Brien (PRWeek): It seems like there is a belief that the younger generation studying communications immediately loves and gets social media. But anecdotally, I've found a lot of them still want to pitch The New York Times to pursue the tactics that have historically dominated the profession. Meanwhile, the experienced PR pros expect these kids to come in and immediately teach them about social media, but even young PR pros need to learn that there is more to PR today than media relations.
Donovan (HP): Regardless of the vehicle, it is about relationships. If people come into an organization, I believe it's flawed to think you'll have an old-line PR pro inside expecting a fresh graduate to come in and teach Twitter to them. You should be learning Twitter on your own, if that's a tool you want to use to communicate with your constituency. You shouldn't rely on some... AE. It is [on] the communications pro to master the vehicle.
Dyson (Next Fifteen): Last time we had a recession, the media collapsed like a pile of cards right at the same time. When clients were struggling, the media [simultaneously] were vanishing before our very eyes. Red Herring was closing down, The Industry Standard was closing down — it was just shocking. So the argument for having a budget to talk to the media was going away before our very eyes.
Now even if the media shrinks —which it will continue to do —there is this whole other avenue that is growing. You can't sit there within HP, Intel, Sun or any of these large [entities] and say you have a smaller number of people to deal with [things] than you had 12 months ago. In most cases, that number has grown very significantly.
Kahn (Sun): One of our hiring priorities is [finding] kids right out of college or fresh MBAs just for that different level of thinking. We're really interested in user-generated content and I have kids sending me video resumes, posting videos of themselves, sending me audio blogs. It's the coolest stuff ever.
Courtney Hohne (Google): We injected our department this year with 30 kids straight out of school. It was a significant percentage of our department at the time. We've always had the luxury of our communications challenges being a bit of a Choose Your Own Adventure novel, but there is so much to do.
For these young ones coming in, we can't guarantee what [they will] be doing in two or four weeks, but [we tell them to] trust us that [this] is going to be a lot of fun. Some of them obviously like a little bit more structure, but others have really risen to the challenge and discovered that if they love working with the phenomenon of the blogosphere or social media, [they] can go to South by Southwest and get paid to sit there and Twitter.
Cline (Voce): We've had a ton of people [at Voce] who have tried virtually everything. They go mad on all different tools for emerging companies and the clients they work on. Now we're trying to ask: What is the strategic application? This is cool, but are we deriving value? We're at that mode where [we're] looking at it from what works and what doesn't because not everything does and not everything should be done.
Horn (Horn Group): There is so much interest in our employees to work with Web 2.0 companies. And there will be some winners and probably more losers. So you have to temper the interest in Web 2.0 companies when so many of them [have] features that belong inside something else.
O'Brien (PRWeek): Do you feel clients/companies are asking for enough measurement? Do tech clients ask for measurement because they're data-oriented people?
Barker (Facebook): I can emphatically say that we care about measurement and data. I have an extremely technical CEO. I am expected to walk in with performance metrics on the messages that we get out in market — and the return. He and everyone else in the company and in the market can see the impact of certain things, as well. And our users are very vocal in telling us what's working and what's not.
Angus (A&R Edelman): Measurement has changed. Now we look at demographic accuracy. Are we reaching the right audiences? Five years ago, you could not do that very effectively, not in real time at any rate. Now we know who we're reaching, when we're reaching them, [whether] they're getting it, and [if] they are responding to it.
Marketing programs can be tapered that way to make sure they are reaching the right people. And it's really important along those lines to ask: Are we getting to the right crowd?
Sokolsky (SparkPR): But it also comes from within. I find that we're all [somewhat] news junkies ourselves and there are so many different tools out there. So, our teams are constantly checking Technorati or Google Trends. They are forever slicing the data after every launch just to measure themselves and have a bit of good fun and rivalry among the teams.
It's nice to know [the initiative is] coming from within, and it's not a mandate [from superiors] because there is... so much that we can [monitor] in real time.
Kahn (Sun): For communications people, the power of measurement is incredible. We measure things on a daily basis, from clicks on press releases to downloads based on headlines to clicks on videos for multimedia press releases. I run the Sun.com homepage and I check the data almost hourly on how many people are clicking on our stories. Maybe I want to rotate the stories later in the afternoon because I want to pick up traffic from developers who might [be looking] to read more about an open-source story. We look at those numbers because they are just so instructive.
Bergevin (Intel): The premise of your question is spot-on. We work with companies that are often led by engineers for whom empirical data is kind of what they trade in —the everyday currency.
You can measure a number of things as well as the quantitative stuff. You can look at qualitative fidelity of message playback, how the stories are actually what you intend them to say, and do that in a way [similar to how] an Intel engineer would measure yield on a wafer. People at Intel understand that kind of thing.
Angus (A&R Edelman): It really legitimized our industry. It's not ethereal anymore; you can really measure [the] impact we have.
O'Brien (PRWeek): Companies have now become content producers. Is there no end to what companies think they can do? At what point does it become an endeavor without the proper return?
Hohne (Google): Google has done a lot of content creation, on the blogs in particular. Now increasingly through YouTube, we have a Google channel [there]. We've done a good job at content creation, but now we're exploring ways to open it up to the community.
You can imagine the debates that must take place about whether to open the main Google blog to the community — millions of people have very strong opinions about [us]. What editorial decisions will we have to make if we have a pipeline of comments? How much would we publish? How much do you restrict? How much do you want it to be representative?
We want it to be open, [whimsical], and fun, but we also have business realities we need to deal with and things we must protect. The spirit is overwhelmingly, ‘let's open it up and let's engage' and I think we're doing well in some of the community development blogs but how we are going to bubble that up to corporate level communications continues to be a challenge.
Dyson (Next Fifteen): We are much further from the edge of the cliff than the advertising industry. We have a lot more that we can do to get to the audience that we want, unlike that advertising industry that has pretty much pushed the envelope as far as it will go in many areas in terms of being able to say, “we'll use the online community to put some kind of interactive component in just about every tiny corner of the Internet that somebody might touch.” So I think for our industry the cost relative to the advertising agencies doing the same thing is still relatively low. So our risk-opportunity ratio is so different. I think we have a mountain more experimenting to do. Because of every day you think you have reached the limit and then someone comes out with a completely new field that you didn't even think of exploring.
Sokolsky (SparkPR): Technology is always going to advance, so what you said earlier was pointed [to] the last downturn with the media. We are seeing an acceleration of that this time. I'm not sure if anyone saw but the Pew Institute study on the state of the media recently came out and it was really grim and a lot of reporters were really concerned about moving into other fields because there is concern [media] is not viable and it will sustain another collapse. And I think we can that [see that shift] happen even more with more mediums and more channels, but the flip side to that is online advertising continues to grow. And we're seeing an overwhelming number of online advertising companies pop up now.
Angus (A&R Edelman): And ad spend is up, it's just being spent in a different way.
Penati (Ogilvy): The bigger evolution in our job is not learning about social media and digital. It's about changing from a [text] storyteller to a visual storyteller. I think as PR pros we always related to the written word, and these new Web 2.0 applications relate to being more visual —except Twitter.
How do you train people who always thought about writing a pitch to a reporter to think of telling a story visually? The visual media—especially the tech media -—are moving online. I'm talking about paperless PR. By 2010, there won't be any more print publications in tech. It will be all online. But moving online always changes the way we use content. If you look at Computer World, one-third of its content is editorial, one-third is user-generated, but the other one-third is vendor generated content. So the traditional [media outlets] are not dead, they are just evolving. As PR professionals, we need to train our people to tell a story visually. That's a major shift and when you interview candidates you have to if they know how to operate a camera, do they know how to edit a video – it's not about a cool video that takes 20 days to edit. It's all about – you have an interview and you are taking a video and then you recycle the content in some way. The shift of writing AP style to tell the story visually is a huge thing for this industry that I'm really passionate about.
Hohne (Google): We just hired a graphics designer. Traditionally, [that person] either sat in product organization or marketing doing more traditional marketing activities. But this is dedicated to more traditional corporate communications and our engineers and product managers have responded extraordinarily well.
We've brought them [in] to say, "Help us tell us your story." And they really struggle - along with us - to take a complicated topic, turn it into plain English, and decide whether the language is better for TechCrunch or The Wall Street Journal. But [what] we've all found to be universal is in graphical and video representations. Lots of videos that look like they've been shot in somebody's basement in front of a whiteboard [have gotten] pickup across the blogosphere. We've now made it best practice when we have product announcements to make sure we have an accompanying visual.
Kahn (Sun Microsystems): We just got 30 different cameras that we got for PR people. So whenever we have a chalk talk or you do a big interview –PR people are responsible for shooting their own stuff. We have a studio on our campus, but it costs $5,000 to step into our studio. People have to know how to use the equipment, take photos, post them on the blog – I actually had to learn how to use it. It's a great skill.
Angus (A&R Edelman): This is the most consumable media for a global audience. One thing we have now is a global audience when you think about the long tail, the globalization of everything we do – video can be understood in any language, virtually. So this is a really consumable media that argues against the audience of one because we've got phenomenal long tail that is fueled by communities around that world that aren't even adjacent but are connected. Consider only 15 % of the world's population have access to the Internet today – you have a whole 85 % of the world to bring into this and talk to and reach and video and audio is the way to do that.
Horn (Horn Group): This is really where PR is evolving to a new discipline. We're talking about integrated communications using all these new mediums. We have a video studio in our office and it's not because clients demanded it – it was more like we were shooting videos for so many different things and then all of a sudden, we realized we should just have a video studio. And now we think, “wow this is great – this is where PR is going.” It's a combination of the verbal brand with the visual brand, using digital marketing tools to have these integrated campaigns.
Dyson (Next Fifteen): It also introduces an interesting challenge for our industry because if you go back 10 years, you sought out influence channels – things that would influence a larger group of people. Now you still use them but they're not everything. So now you're the influence channel – you are the start and the end of the process. So before you built up this story and then watched it get diluted down until it got to the right person. Now you're [the] dilution mechanism, you're the filter, you're taking that content, and editing it and making it authentic. That's a very different role for our industry, we were never about authenticity but suddenly now we are. We have to start telling the truth and PR industry is not known for telling the truth.
Cline (Voce): The challenge to that is that authenticity does not reach the same audience size. It's a much more narrow. It may not attach to it the same level of credibility as well. You have to have a mix.
Angus (A&R Edelman): This work we need to do as a group. We need to work at establishing the credibility of our organizations and making it a truthful industry so that we are seen as authentic.
Barker (Facebook): I think the authenticity and transparency piece is really important – I argue more important than video is as a form of communications. We had a little thing called newsfeeds happen last year when 750,000 users protested and because we communicated to our user base – we issued a press release, but we also issued a blog that [CEO] Mark [Zuckerberg] posted and apologized our wrongdoing and it was received really well because we were willing to say we made a mistake. And that transparency, when we fall back on that as a company in our communications, we find success.
O'Brien (PRWeek): Does it make sense for this industry to talk so much about transparency when you can't ever be as transparent as the audience wants?
Angus (A&R Edelman): But you can be transparent about what you can't be transparent about.
[participants agree in unison]
Sokolsky (SparkPR): I think culturally we are shifting [to] a higher moral high ground because privacy has been dead for years as far as I'm concerned. We're talking about transparency, and we're splitting hairs but you can find thousands of blogs will address it and you can find out background on anybody before you hire them these days. I think there is something in the back of our minds being in technology that there is no other choice to take the moral high ground because everybody is going to find out about it sooner or later.
Kahn (Sun Microsystems): We have always complete transparency with our employees. We don't put out a lot of Sun e-mails because all the information is in [CEO] Jonathan [Schwartz]'s blog. It's just out there and it's part of the culture of what we do and that culture guarantees certain filters throughout everything. But with that comes certain risks that as communications people you have to be aware of.
O'Brien (PRWeek): Can you talk about the blog as an internal communications tool?
Kahn (Sun Microsystems): Before Jonathan had a blog there were a variety of different vehicles geared towards employees, all Sun e-mails – we don't do that anymore. Now it's “read Jonathan's blog on the subject.” It's earnings, it's acquisitions, it's a great new launch – his blog is mandatory reading. Why rehash that same information? It's like treating an employee like they're not that smart like we have to rehash that information in a new way just for you. [Now we] write it the same way for the whole market.
Relevance of green
O'Brien (PRWeek): Is green still a big deal?
Angus (A&R Edelman): It's very important and will continue to be. We're just at the start of it. Now the real products will come to market.
Bergevin (Intel): This goes back to comments about the recession to some degree. Not only must you look as to whether the tech industry is affected by the recession, but software, tools, semiconductors, the data storage—the things that we enable in the tech industry help businesses generate productivity and help get themselves out of economic downturns. It's a big part of the solution. It's not the only part, but it's going to play a role.
When you get to the image side of green, there is a certain amount of backlash, greenwashing, and all that. Companies must be careful to draw the right balance between what is legitimately helping the environment [and what] is just a nice marketing campaign to bring some sheen on the reputation.
Dyson (Next Fifteen): Green was the hot topic, [but] is not anymore. The economy has taken over as the hot topic. If you had a green story to tell nine months ago, you had a very high probability of getting people to listen. Now, the audience has dried up considerably. If it's a good story, it's a good story - but it's the natural ebb and flow of what's going on.
Recession has yet to hit the technology sector
Measurement has become more prevalent, as well as more sophisticated
Tech PR is increasingly incorporating video into its work
Even if media outlets shrink, the blogosphere will give PR pros more chances to tell their story
The economy has taken the place of green as the new hot topic
Dealing with the recession