WHAT TECH CLIENTS REALLY WANT: The balance of power in hi-tech hasshifted, with clients calling all the shots. Julia Hood asks how PRagencies can woo them now

A lot of hi-tech PR firms would like to know what Kevin McGuirk is

thinking. That's because the recently hired VP of corporate

communications and branding for BEA Systems embodies much of the

uncertainty plaguing the hi-tech sector right now.



He is managing a process that began before his time at BEA, when Text

100 resigned the account after winning part of IBM's business last

year.



Formerly with Oracle, McGuirk started his new job after an agency review

had already begun. The process was further complicated when BEA brought

in a new CEO, and the agency search went on temporary hiatus.



Now McGuirk is starting over, contacting individual PR agencies, some of

which may have participated in the first review, and others that did

not. Applied Communications, a firm familiar to McGuirk - it used to be

Oracle's agency of record - has been brought in to help out on a project

basis while the review continues. And while Applied may appear to have

the insider advantage in the AOR stakes, both McGuirk and the agency

contend that Applied will have to compete for the job like everyone

else.



BEA's situation reflects some of the interesting dynamics that exist in

hi-tech PR competition right now, with a new VP and CEO redirecting the

PR priorities. Other hi-tech companies are also engendering speculation:

Dell launched a search for corporate work; Oracle took its PR in-house

and remains mum about its future plans; and SAP surprised many by

dropping Waggener Edstrom, its agency of six years, to retain

Burson-Marsteller.



As several seemingly unassailable associations come to an end, tech

agencies are feeling a little paranoid right now. Many clients are

looking for a change, either because of a strategy shift, or because the

dot-com bubble had them trapped in an unsatisfactory relationship.

Whatever the reason, tech clients know they can review PR associations

from a position of strength. Times have certainly changed.



Synopsys, an integrated-circuit-design company, retained Edelman in

September, but had problems with its previous PR firm. The Silicon

Valley company wanted a firm closer to its base, and one that could help

it grow outside its sector. There were also some complicated billing

problems.



But Craig Cochran, director of corporate marketing, was forced into the

unsatisfactory relationship when, in late 1999, his previous agency

dropped the Synopsys account to chase dot-com dollars. Cochran says that

while Synopsys was careful in choosing a replacement agency, it was

difficult to find a good match. "It wasn't arbitrary, but it was very

slim pickings," he says, "and we had to go with the best opportunity we

had." But last July, when he started looking again, he had calls from

agencies as far away as the Caribbean, and of all sizes, from solo

practitioners to multinationals.



Companies engaged in a PR agency search are often reluctant to discuss

their specific requirements, but they'll likely talk about what they

don't want.



Strategy versus tactics



McGuirk believes an imbalance exists between the strategic counsel

offered by some PR firms, and their tactical capabilities. "One of the

problems with many agencies in the last few years is that too many of

them positioned themselves as strategic counsel, and turned their noses

up at the tactical work," he explains. "I've seen many 'strategic' plans

that were dead on arrival because they had no bearing on what might

really work with the press."



Barry French, director of Americas communications at Dell, agrees that

there is an increasing trend among clients to prize effective execution

as highly as strategy. "The in-house people know their business better

than the agency, and are better positioned to develop strategy," he

says.



"That doesn't mean we don't want creative ideas, but it has to be

combined with execution and measurable results."



Likewise, Ed Murrer, SVP of marketing at Persistence Software, brought

in McGrath/Power (a firm known to him from a previous position) to be a

strategic partner - "to have the Vulcan mind meld, if you will, on what

our strategy should be." And Murrer expects the agency to implement the

schemes it conceives.



But internal shuffles have clouded the lines of communication between

agency and client. James Finn, Oracle's new VP of corporate

communications, continues to reorganize the in-house team. Although

there have been rumors of an RFP, Oracle will neither confirm nor deny

it. But the company, which ended its eight-year run with Applied last

year, still retains PR21 for the applications side, and is no doubt

considering what agency model will suit its changing needs.



Finn has convictions about PR's role in the tech company. "In the past,

the story was driven by the product perspective," he explains. "But in

the future, we see a broader story being told. We think fragmented

information is your enemy." That's a familiar theme in hi-tech right

now: developing an integrated, consistent message - a more targeted

approach to corporate branding.



SAP's decision to end its relationship with Waggener Edstrom was

prompted by a need to consolidate its message globally, as well as

holistically.



"The ultimate goal is to have a seamless PR message," explains SAP

spokesperson Laurie Doyle Kelly. She says the company made this decision

during a "benchmarking" process that included discussions with three PR

firms. Burson won the account based on its contribution to this

benchmarking process - no additional reviews were held.



Multinational firms like Burson, Edelman, and Brodeur may appear to have

an unbeatable model when it comes to competing for that level of

business, but some clients view global needs differently. Working on

even one region for a worldwide company requires an international

sensibility.



Philips Semiconductors, with its headquarters in the Netherlands and

offices around the world, retained The Hoffman Agency in North America

after looking at 10 different firms. "We talked to agencies much smaller

than Hoffman, and much, much larger," says Paul Morrison, director of

marketing communications. "We were looking at what our needs were here

in North America, but also how they could work with a global

organization. It requires a lot more than the ability to use e-mail and

voicemail."



On the other hand, smaller companies have often avoided hiring worldwide

agencies out of the understandable fear of being overshadowed by clients

with bigger wallets. WRQ, an integration software and services company,

recently hired Brodeur as agency of record, but only after years of

using boutique firms. "In the past, we felt like if it was an agency

capable of a worldwide presence," explains president and COO Shaun

Wolfe, "they were too big for us and we would get lost."



A measured approach



PR agencies are all talking about measurement these days. It's an issue

that predates the tech boom and downturn, but has gained increasing

relevance in an era of shrinking budgets. Unlike advertising, no

consistent industry-wide standard for measuring the effectiveness of PR

exists, so agencies are continuously developing measurement tools and

standards to offer a competitive advantage.



Generally, clients consider the measurement models carefully when making

an agency selection, but do not always have solid mechanisms for gauging

a PR program internally. Tying a PR program's success into the number of

sales leads generated, for example, demands a commitment from the client

on tracking progress. Media hits, both volume and quality, are still

considered extremely important, but it can be difficult to get companies

to look beyond the size of the clipping book.



What really resonates is tying measurement to the company's underlying

business objectives. Factiva, a provider of web-based news services, was

looking for a new PR agency to support its strategy shift (to focus less

on the products and more on its potential in knowledge-management

systems).



Hill & Knowlton was retained in December on the strength of its

two-tiered system to evaluate PR effectiveness, including media hits and

a thought-leadership "barometer." The latter, although admittedly a less

scientific measure of success, tied directly into Factiva's

objectives.



Some measurement is inherent in the way a firm operates. Atomic PR

became Guidance Software's first agency of record this month, in part

because of a technology platform that allows continuous access to work

as it is being executed. Jennifer Ahnberg, Guidance's marketing

specialist, says that her company needed that transparency. "Atomic

really understood the emotional level that this is a lot of money for

us."



Tech agencies should remember that their in-house counterparts answer to

internal audiences, often comprised of other senior executives. WRQ's

Wolfe oversees Brodeur's budget, but not its daily operations. He

believes that agencies and clients alike need to forget about the money

side once the contracts are signed, in the same way an employee of the

company does.



"We don't want to think on a day-to-day basis, 'Did they earn their

salary today?' but do a constant evaluation every day."



Companies say they need real commitment and partnership from PR

firms.



For Dell, GCI Group's pledge to train additional people within the

agency about Dell's business (so they could be pulled in to work on the

account as needed) signaled a significant commitment.



Dell's French says that PR firms also have to understand corporate

realities.



"People within companies are resource-constrained, many having had cuts

in their PR departments," he says. "There seems to be a trend toward

looking for imbedded partnerships, where you have this one-team focus.

It's the best way to maximize resources and be more efficient."



But a one-team focus does not mean sacrificing opinions, creativity, and

judgment.



Last year, VeriSign picked Applied Communications as its new agency of

record. Tom Galvin, director of corporate communications, says many

agencies lost the pitch when they failed to stick to their convictions.

"There were people coming in with an idea, then, if we pushed them,

immediately capitulating," Galvin says. "You have to come in with an

attitude and an opinion that's strongly based on research, and fight for

it."



RECENT PR SHUFFLES IN HI-TECH



Iomega: Previously retained Paine PR, then switched to Publicis Dialog

in April 2001. Has just hired Fleishman-Hillard as AOR, following an

intensive review.



Sun Microsystems: In April 2001, Sun split its PR accounts, previously

handled by Burson-Marsteller and Ketchum, among four agencies: Eastwick

Communications, Alexander Ogilvy, Citigate Cunningham, and KVO. Four

months later, Sun dropped Eastwick and KVO.



Dell Computer: Fleishman-Hillard had been the long-standing AOR, when

Dell decided to consolidate its PR agencies in July 2001. GCI Group won

the account for the Americas. Dell has since issued an RFP corporate

work.



IBM: Consolidated its PR agency roster of some 50 firms around the world

in August 2001. Omnicom's One Blue network won the customer contract,

Magnet Communications won the tech innovation and reputation brief,

while Text 100 has the product business.



Oracle: Ended its eight-year relationship with Applied Communications in

September 2001. Retains PR21 for applications work. No new agency

relationship.



SAP: Worked with Waggener Edstrom for six years. Held a "benchmarking"

exercise in November 2001 to review PR efforts, with presentations from

three PR agencies. Selected Burson-Marsteller as its new AOR.



Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Register
Already registered?
Sign in