Since bulls turned to bears in last year's tech market implosion,
all types of technology companies have been mauled. In the
July-September 2001 quarter alone, science and technology stock funds
lost 38.9%. For the year, the funds are down 53.7%.
But amid the gloom there are a number of success stories. At first
glance, the biggest challenge for PR execs at these still-thriving
technology companies is to contain their glee. But putting out good news
in a struggling sector can be a communications minefield of perceived
insensitivity and reporter disbelief. In fact, many PR execs interviewed
for this article say that rather than reporters calling them to discover
their company's secrets to hi-tech success, it's often up to the PR
person to source that success through quarterly statements or, in the
case of private companies, internal revenue reports.
As in the days of the dot-com explosion, hype overload may explain
reporter hesitancy. Om Malik, senior writer at Red Herring magazine,
says he usually receives 15 phone calls and 50 e-mails per day hyping
successful hi-tech companies. One or two of these, he says, he actually
deems successful.
"Unless a company has some customers, and/or a perceptible technology
edge, it's a tad hard to believe anyone," says Malik, who covers
internet infrastructure, telecoms, and private equity. "If it's a
company on my beat, I have a fairly good idea of the overall topography,
and it is not very difficult for me to figure out what is good and what
is bad, and which companies are successful."
Camouflaging success
September 11 has made the battle to break into good press even more
treacherous.
Practitioners representing hi-tech companies that stand to profit from
increased security concerns stemming from the terrorist attacks may
worry that communicating their products or business model may make them
seem more like preying vultures than proud American eagles.
"Now, more than ever, we need to be strategic," says Julie Pacino, GM of
Stanton-Crenshaw Communications in Huntington Beach, CA, which
represents udate.com, one of the many online dating services that saw a
bump in business after September 11. The public company reported Q3
earnings of $2 million.
A Reuters article 17 days after the attacks quoted the company CEO as
saying site traffic was up by 15%-20%.
"We should be moving forward and advising our clients to continue with
their programs as long as we are being cautious and not doing anything
in bad taste," says Pacino.
While many e-marketplaces that propose to link buyer and seller in
cyberspace saw their fortunes reverse along with their stock prices, a
few have survived.
Take AutoTrader.com, for instance. The company's listings of both used
and new cars for sale gives it buoyancy in a cyclical economy -
high-end, new vehicles in good times, used cars at cheaper prices in
lean times.
As a result, revenue at the privately held company actually increased
86% over the past year, with a $15 million rise in what for many
companies was a disastrous Q3 of 2001.
To communicate AutoTrader's success, PR coordinator Jody Scott steers
media conversations away from the gutted e-auto sector, and toward the
thriving online classified companies, such as Monster.com and
Realtor.com
The reason the strategy works, Scott says, is because AutoTrader, unlike
many e-auto sites, does not aim to sell cars. Instead, the company's
business model is based on the classified model. Comparing like to like
ensures the company will be featured in articles detailing the success
of online classifieds, not the demise of the majority of e-auto
sites.
"Media has the tendency to lump AutoTrader.com in with every other
company that has something to do with cars on the internet," says Scott.
"Since we are a survivor in a landscape that's been littered with e-auto
casualties, we've been positioning ourselves as an online classified
company - a media company, really - that doesn't rely on
transactions."
Another successful hi-tech area is the dot-com that offers information
to a specific audience under-served by competitors. For example,
CollegeRecruiter.com caters to college students and recent college
graduates seeking employment, and is therefore more focused than general
job sites. The company that runs the site has been profitable every
quarter for a decade. Steven Rothberg, president and founder, says
careful spending with an eye toward ROI has kept the company in the
black, while a PR strategy that ignores the competition has kept media
notices positive.
"We feel that virtually everyone we communicate with understands that
the vast majority of dot-coms lose money," says Rothberg, who handles
the PR function himself. "So when we say we've been profitable every
quarter, we have confidence that they can draw the inference that we're
different from our competitors, yet we don't have to criticize or bring
any direct attention to them. We want the focus to be on what we do, not
on what our competitors are doing (losing money) or failing to do (make
money)."
Rothberg's strategy differs markedly from AutoTrader's tactic of
positive comparisons with similar business models, but it has netted his
company press coverage with ABCNews.com, BusinessWeek.com, the Chicago
Tribune, eCompany, Fortune, Small Business, and The Wall Street Journal,
among others.
Agency involvement
While Rothberg has kept his PR function closely held, other hi-tech
companies credit their agencies for bringing additional communications
strategy expertise to media plans. Keith Goldberg, VP of marketing for
Biz360, praises Peter Evers, president of Magnet PR in Oakland, CA. Even
with 100% quarter-to-quarter growth, an online PR and marketing
measurement service might be expected to be tough on its own PR
representation. But Biz360 has been working with Evers for nearly a year
now, after numerous extensions to an initial four-month contract.
"In this time, people are very unfocused and are only really interested
in covering what they absolutely have to," says Goldberg. "So mainstays
like Microsoft and Compaq end up getting more of the ink than usual. For
that reason, Peter's ability to dial up a long-time contact at Fortune
or Smart Business and guarantee a meeting is key for us or anyone."
But since September 11, many hi-tech companies and their agencies have
increased concerns over communications. Wary of appearing to capitalize
on fear, firms that are in a position to profit from security issues
raised by the terrorist attacks must communicate a genuine ability and
readiness to help, but not appear eager to profit from a skittish
public.
Eight-month-old iJET, an "intelligence agency for the global travel
industry," leapt from obscurity to prominence at 10am on September 11.
The immediate challenge for its newly hired agency, Alexandra, VA-based
Periscope Communications, was to position iJET's travel safety and
counter-terrorism personnel as experts, without appearing to profit or
shill in the wake of human loss.
"No one wants to look like a jerk making money on the backs of the
dead," says Periscope CEO Dan Baum. "We knew September 11 was a defining
moment, and we knew we had to react fast and react appropriately. So
iJET temporarily waived fees for its services to avoid the perception of
profiting from disaster."
While a PR strategy specific to a successful hi-tech company is
important, some PR lessons apply no matter who the client, and no matter
what the circumstances. Merilee Kern, owner of Kern Communications,
represents eDiets.com, a subscription-based online diet center that
posted Q3 revenues of $7 million, up 85% year over year. Kern
insists, "A compelling, relevant, and timely proactive pitch, and a
tenacious, yet cautious, follow-up is still the key to successfully
generating interest within the media and to getting the often elusive
ink."
That basic newsworthiness, according to PR professionals and technology
reporters alike, is still the bedrock for media coverage of
e-companies.
And hi-tech PR folks can take that to the e-bank.
HANDSPRING BALANCES SENSITIVITY WITH HOLIDAY SALES
Handspring's stock may be down more than 93 points from its all-time
high of 99 just over a year ago, but the handheld computer manufacturer
still expects 16% growth in 2001.
Jennifer Colton is a VP at Switzer Communications, where Handspring is a
two-and-a-half-year top account served by nearly a third of the
24-person agency staff. Colton says the tough tech market has changed
the company's communications strategy from fun add-ons such as games,
cameras, and other luxury items, to an emphasis on value and
innovation.
But increasing competition in a shrinking sector means Handspring is
counting on a profitable 2001 Christmas season to end the year with
targeted revenues of $312 million to $316 million. To
ensure its products hit Santa's sack, Handspring had to announce two new
handhelds just one week after September 11, and a new product on October
15.
"We didn't want to seem insensitive, but we had a job to do," says Brian
Jaquet, Handspring's corporate communications manager.
Jaquet says company pitches were restricted to beat journalists who
needed to cover the company. Later, anthrax scares slowed shipping
samples to reviewers, which he says helped justify the decision to
announce earlier rather than later. Through e-mail and telephone
conversations, reporters let the company know if their beats or
priorities had changed.
Media strategy, Jaquet says, is based around what his competition is
doing. For that reason, new products or innovations define his media
plan.
"This market would be a lot more difficult if we had nothing to talk
about."
