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.
