Study shows PR's key role in hi-tech startups' budgets

SAN FRANCISCO: Hi-tech startups spend more on PR than any other marketing channel, according to a new study from hi-tech marketing firm Launch Pad and PR firm Blanc & Otus.

SAN FRANCISCO: Hi-tech startups spend more on PR than any other marketing channel, according to a new study from hi-tech marketing firm Launch Pad and PR firm Blanc & Otus.

The study finds that while marketing dollars continue to decrease out of proportion to other departments, what's left of the marketing budget is going increasingly to PR. PR allocations make up 25% of such marketing budgets, up from 19% last year.

"Companies have found that PR is the most cost-effective way to get their name out there," said Shelley Harrison, CEO of Launch Pad. "It's hard for CEOs to see other CEOs' names in lights, and not see their own."

She added, "They also find that it's often hard to explain what their companies do in a single-page ad, so they use PR."

But PR is expected to do more with less. Of the 33 startups queried, marketing fell from 20% of corporate expenditures in 2000 to a mere 13% in 2001, while engineering increased from 29% to more than 50%.

"PR has worked for startups, so when they cut budgets, they don't cut PR as much," said Harrison. "And these companies will need to rely on PR more as they rebrand themselves and develop new plans. And they're doing it for pennies. How can a company tell PR people they have to revamp everything from its name to its audiences, if the budgets keep getting smaller?"

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