When Tom Panelas started working at Encyclopedia Britannica around 18 years ago, the company had inked a deal to make its content available through Lexis-Nexis. The idea at the time was that professional researchers would be interested in paying fees to access the information. ’Few people envisioned a time when direct or electronic publishing would happen in the consumer market,’ he recalls. How times have changed.
When Tom Panelas started working at Encyclopedia Britannica around
18 years ago, the company had inked a deal to make its content available
through Lexis-Nexis. The idea at the time was that professional
researchers would be interested in paying fees to access the
information. ’Few people envisioned a time when direct or electronic
publishing would happen in the consumer market,’ he recalls. How times
have changed.
It’s now almost the year 2000 and Panelas, director of corporate
communications with Chicago-based Britannica, has had to face the PR
challenge of reshaping the company’s image from that of a stodgy book
publisher to that of an online knowledge provider.
Britannica recently launched a no-fee web site, putting its 200-year-old
encyclopedia online, and also forged partnerships with more than 70
firms to include news, weather, sports and financial information.
Panelas had to shape a PR campaign for the new site. And when it
launched on October 19, he had to switch gears swiftly to deal with a
crisis - visitor demand overwhelmed the servers and effectively shut
down the new endeavor for more than two weeks.
Panelas and others think Britannica has weathered the technical problems
of those first days with relatively little long-term PR damage. But
still ahead is the more important issue of revamping the company’s
overall image. And its survival is at stake.
Contraction
In the past decade, print sales have fallen 80% and Britannica has
contracted dramatically. While the privately held company no longer
releases financial information, industry sources estimate its sales have
fallen from a high of dollars 650 million in 1989 to about dollars 300
million in 1998. Door-to-door sales ceased in 1996. Its workforce has
been similarly decimated, from 2,300 a decade ago to about 350
today.
Consumers who use encyclopedias these days tend to buy them on CDs, like
Microsoft’s Encarta, or they simply look online for information. Other
encyclopedias are already available on the Web. ’Britannica had been
written about as epitomizing the type of company that didn’t get it,’
says Don Middleberg, head of Middleberg + Associates, Britannica’s PR
agency.
Panelas contends Britannica ’gets it’ now. ’It’s as if the old company
moved out and a new company moved in and kept the same name,’ he
says.
Indeed, the company has formed a new subsidiary, Britannica.com, to
handle its online venture. The company is also convinced PR will be a
major component in shaping its new image: ’This is one place where PR
has a place of respect at the table.’
That wasn’t always the case. When Panelas came to Britannica, PR’s role
was ambiguous. The direct sales force at the time didn’t want PR talking
about product price or attributes. These days, PR is an integral part of
the company’s marketing efforts.
When Britannica decided about a year ago that it had to make a dramatic
change of direction with a free access web site, Panelas knew he
couldn’t handle the PR alone; he is a one-man PR band within the lean
Britannica corporate structure. So he went looking for an agency with
experience taking established brand names onto the Web. He hired
Middleberg in the summer and took on a UK agency to handle PR there. He
also retained long-time Chicago PR fixture Margie Korshak to help raise
the company’s PR image in the Chicago business community, stressing its
new hi-tech focus.
While he won’t disclose exact figures, Panelas says Britannica is now
spending ’well into six figures’ annually on PR, a major increase over
1998.
Middleberg recommended positioning the new Britannica site as ’the place
where smart people will come.’ Panelas wanted PR efforts to stress that
the new site would offer more than the encyclopedia. Britannica hopes to
make money from advertising and partnerships, but profits remain elusive
for most web sites. That means it needs content that will keep people
coming back. The site is aimed at the 18-to-49-year-old audience, a
change from the traditional student users of Britannica.
PR efforts began in the summer as Britannica executives made mention of
changes coming in its Web presence. ’Word was starting to get out that
we were doing something interesting,’ Panelas recalls. Calls for more
information started coming from major media outlets. Panelas and
Middleberg decided to give The Wall Street Journal and The LA Times
exclusive stories for the day of the site’s launch. Those, in turn,
generated wire service stories the morning of the launch, followed by
electronic media coverage and widespread newspaper coverage. Panelas
recalls more than 1,000 media calls following the launch. ’This wasn’t
Joe Nobody launching a site,’ Middleberg jokes.
Crash
Users flocked to the site, flooding it off the Net that first day. More
than three million tried to log on in the first 20 minutes, with more
than 10 million trying to get on the first day. Britannica hadn’t
anticipated such a demand, and Middleberg advised framing it as a
success story.
Britannica.com CEO Don Yannias quickly became the company spokesman on
the crash issue, and a letter from Yannias appeared on the site
explaining the problems. Middleberg’s people stressed the positive
nature of the high level of demand for site access, and Panelas and
Middleberg think they contained the damage. Panelas points to subsequent
favorable reviews in the Journal and Computerworld.
Still, some question the company’s spin on the issue. ’Being who they
are, I think it affected their credibility,’ says Sandra Saias, SVP and
group head of Edelman’s consumer technology group. But others insist
online image is about the here and now, and past problems quickly fade
away.
’(Initial site launch) problems have been proven time and time again to
be forgotten,’ says Paul Rand, president and CEO of Corporate Technology
Communications, a Chicago hi-tech PR and business consulting firm.
Britannica has added 60 new servers and is ironing out software problems
on the site.
Now the challenge is repositioning the brand. ’That’s not something you
do with one press release or a launch,’ Panelas says. PR will emphasize
the quality and reliability of Britannica as an information source. It
won’t be easy, as it will have to balance talk of its heritage with
efforts to seem new and cutting-edge. ’A 200-year-old Internet company
is something of an anomaly,’ Rand notes.
Panelas’ job going forward is to make sure Britannica isn’t seen as an
anomaly, but rather as a major Web destination. The travelling salesmen
might be gone, but Britannica still hopes to be a major presence in
American homes.
BRITANNICA
PR head: Tom Panelas, director of corporate communications
Corporate Communications duties: Driving traffic to new Britannica.com
web site, repositioning company as a Web destination, stressing variety
of content on web site
Agencies: Middleberg + Assoc. (New York) to position new web site;
Margie Korshak to raise corporate and tech profile in Chicago; Band &
Brown Communications (UK) for UK work.
