It must be hard not to feel a twinge of envy when another dot-com start-up makes a killing on the stock exchange. The tale of the fresh-faced, still-pimpled graduate who works from a garage only to become a multi-millionaire is very familiar to the PR pro. And their ’conversion’ into viable, presentable, well-connected businessmen and businesswomen is thanks in no small part to the work of expert PR pros.
It must be hard not to feel a twinge of envy when another dot-com
start-up makes a killing on the stock exchange. The tale of the
fresh-faced, still-pimpled graduate who works from a garage only to
become a multi-millionaire is very familiar to the PR pro. And their
’conversion’ into viable, presentable, well-connected businessmen and
businesswomen is thanks in no small part to the work of expert PR
PR is instrumental in the growth of hi-tech companies, a point that is
amply illustrated by the astonishing growth of hi-tech PR, with the top
100 hi-tech practices now accounting for a quarter of the business
generated by the top 100 PR firms ( PRWeek, August 16).
But should PR pros take a share in spoils over and above the fees they
now enjoy, in the form of stocks at ’friends and family’ prices? It’s an
ethical issue that was brought to the fore once again by the speedy
suspension of San Jose Mercury News journalist Chris Nolan (see
analysis, p10) whose actions appear no worse than those of PR pros who,
at some companies, are actively encouraged to accept such options.
Journalists who buy ’friends and family’ stock options can in no way be
said to be acting in the best interests of the public. The motivation
for writing a favorable (or for that matter unfavorable) story is always
going to come under scrutiny.
But what is the position in PR? Arguably, since the PR pro is acting in
the interests of a client, he cannot be said to be independent, and
therefore should not come under the same level of scrutiny. PR, in its
basic form, is about selling - in a subtle way, using third-party
endorsement, but selling all the same.
But to deny that the position is open to abuse is naive in the
PR pros are regularly accused of hype. And in the hi-tech dot-com world,
where pre-revenue let alone pre-profit startups are valued sometimes in
billions, and where journalists and analysts regularly have little or
nothing to go on, it is clearly unsuitable if a PR pro knows that their
ability to create a buzz will directly affect the size of their
PR is supposed to be about bridging the gap between perception and
While this writer believes that to be a worthy but rather unreal
endeavor in the world of PR, nevertheless it cannot do for PR executives
to inflate the stock market for potentially personal ends.
Some agencies we spoke to insist that their executives must sell 30 days
after an IPO, to avoid abuse of the system. But is this really the
Often, after 30 days the company’s stock price may still be wallowing in
the after-glow of successful PR efforts. But what happens a year later,
when the management team has been found wanting, or the product has
proved faulty, and the share price has headed south? If anything, PR
pros should be required to keep their stocks for several years following
an IPO, to ensure that they don’t make a killing from their own hype,
and then ride off into the sunset.
Or better still, PR pros should be banned from taking stocks at ’friends
and family’ prices altogether. It is the PR professional’s duty to be
above reproach. To be anything less is to invite controversy and risk
besmirching the profession still further.