In the middle of 2000, when the founders of SoundBite.com were
looking to launch their new company, they couldn't understand why the
press wasn't reacting in the same fawning way it had a few years
They were established players who had already created an online search
firm. Chris Perkett, president and founder of one of SoundBite's PR
firms, PerkettPR, says, "They had sold their company, Direct Hit, to Ask
Jeeves for $500 million, and they wanted to do it again. But they
quickly became frustrated and began asking, 'Why aren't we on the front
page of The Wall Street Journal?'"
Perkett continues, "It wasn't until January that they said, 'Okay, we
see, everything's changing now.' They thought their past success would
be enough of a story to get attention this time around, and it
Tough times make for a tougher sell
No one said these are easy times for PR firms representing dot-coms and
other internet plays. Indeed, many agencies are now pleased to see the
backs of their last web-based clients. But even in the current economy
there are still plenty of dot-coms out there, and PR agencies are
finding that although reporters are certainly more cautious about
touting the next big thing, they're not completely against writing about
But things have changed, and PR people must now bring much more
information to the table. Journalists are no longer looking for just
whiz-bang technology and pie-in-the-sky business models, but rather
customers, profits, and other types of third-party validation that give
them confidence the company will be around in the future.
"Reporters have been burned by just covering pure technology stories,"
says Jeannette Bitz, senior account supervisor with Alameda, CA-based
Gallagher Public Relations. "Now they're looking for the complete
package - what kind of VC funding is this company getting, and how are
they going to execute their plan."
Gallagher specializes in guiding internet infrastructure companies as
they go from start-up to the funding rounds. Bitz notes that with the
number of IPOs declining, companies are now operating on a longer, but
more realistic cycle. That in turn gives PR firms a much better chance
to lay the groundwork for a long-term campaign, beginning with the
technology trade press.
Bitz says it's still important to take the time to educate reporters
about emerging technologies, adding that the reduced number of
technology journalists working today is a benefit. It enables PR firms
to build quality relationships with key editors, rather than service a
broad array of outlets.
Kristin Gabriel, cofounder of Los Angeles-based ecom Communications,
notes that despite the high-profile closure of new economy title The
Industry Standard, there are still plenty of media outlets remaining,
especially among the trade magazines. "We focus on the best return for
our clients' PR investment, and for us that means getting them in front
of their customers.
We build credibility initially through the trades, then the vertical
business outlets within their own industry, and finally the financial
But in the current, more skeptical climate, PR execs recommend
leveraging whatever assets you can, especially your client's
partnerships and management team. Indeed, pedigree matters now more than
The online travel site Orbitz was able to generate considerable coverage
for its June launch, in large part because it was founded by five of the
leading airlines and had the support of 50 other high-profile marketing
partners. "It gave us a lot of credibility," explains Carol Jouzaitis,
Orbitz VP of corporate communications. "I think for a lot of reporters
covering the internet, we became a 'good news' story - a bright spot in
an otherwise depressing year."
Jouzaitis says press coverage has continued beyond the company's
successful launch and into the fall, with the focus on the ongoing
battle between Orbitz, Travelocity, and Expedia for the online travel
customer. But she concedes that Orbitz benefits from the fact that while
editorial pages devoted to dot-coms have fallen, the number of the
dot-coms has declined even more. "With so many dot-bombs out there, it's
certainly easier for us to cut through the clutter," she says.
Today it takes a strategy
For those internet start-ups not backed by the high-profile industry
leaders, PR firms need a nimble strategy that can bend and shape a
client around current news trends.
John Raffetto, senior VP of PR at Infotech Strategies, explains how he
had to change his pitch when it initially fell on deaf ears. Raffetto
worked on behalf of BenefitsCheckup.org, a website backed by the
National Council on the Aging that allows seniors to search for federal
"On our first round of pitches, we went to the Today show, and the
standard pitch didn't work," he says. "They flat out told us, 'We don't
do new websites anymore.'"
After realizing that the media was focusing more on the bad economy than
anything else, Infotech repositioned BenefitCheckup.org as a resource
for stories on how to make ends meet. "We pitched our client as an
expert who could talk about the benefits that seniors overlook the
most," Raffetto says. "When we went back to the Today show with that
pitch, we got the interview." Infotech also placed stories in
Kiplinger's Personal Finance, The AARP Bulletin, and Modern
Raffetto says one of the dilemmas faced by today's start-ups is that it
can be hard to generate the outside validation journalists now
For BenefitsCheckup.org, Infotech had to recruit the beta testers of the
service, making them available to journalists who wanted a consumer's
view of the service even before it had formally launched. "When The Wall
Street Journal became interested in the story, the reporter was able to
get on the phone minutes after talking to us and call somebody who had
just used the service," Raffetto says.
Another dot-com that has been able to leverage the current economic
turmoil to its advantage is Salary.com. Manya Chait, VP of Salary.com's
agency, Schwartz Communications (MA), notes that the standards for
coverage are certainly higher today. "I think journalists are much more
cynical when it comes to covering companies that are in the dot-com
arena," she says.
"But if you can prove a company has revenue, clients, users, and - most
importantly - a good business model, then reporters are actually hungry
to speak with them."
Schwartz launched Salary.com in May 2000 with a release announcing the
site's first syndication deal with Yahoo! But in addition to
company-related announcements, Schwartz also worked to position
Salary.com executives as experts in the compensation industry, able to
comment on issues ranging from declining stock options to negotiating a
raise in tough economic times.
"We actually had Rolodex cards printed up and sent out to hundreds of
reporters so they would be reminded to access Salary.com experts every
time they were putting together a compensation story," explains
Schwartz also worked with Salary.com to publicize the emergence of
trends such as "apology bonuses" (cash payments given to recent
graduates by companies who had originally promised them jobs, but had to
renege due to the difficult economy). That story ended up leading an NBC
Nightly News broadcast.
Surviving is more than staying afloat
While new internet companies face an uphill battle for recognition,
there are also a lot of survivors faced with the more difficult task of
rebuilding their reputations. One such company is PurchasePro.com, a
b-to-b provider of software and services that enable hotels and other
companies to streamline their purchasing processes. Like many dot-coms,
PurchasePro saw its valuation soar and then just as quickly plummet, in
part because of poor decisions by management that were compounded by
slip-ups with its financial reporting obligations.
In order to rebuild the company's credibility, Sherman Oaks, CA-based
Auerbach & Company was brought in to help implement a "just the facts"
PR strategy. Agency president Alexander Auerbach says, "We decided that
anything that remotely sniffed of hype would be counter-productive. I
talked one-on-one with the reporters and told them we would be sending
out deliberately bland press releases ... rather than any over-the-top
exercise in self-congratulation."
Auerbach says the reaction from the journalistic community thus far has
been positive. "When we put out a press release that includes metrics of
significant performance, it tends to get the attention it deserves," he
says. "That doesn't mean Fortune magazine clears the front page or The
Wall Street Journal makes it the lead story, but it doesn't get
overlooked." But Auerbach quickly adds, "This is a continual exercise in
rebuilding credibility, and you never want to take it for granted. One
simple mistake, and the press could easily feel that they've been
If there is a silver lining in the current PR climate for dot-coms, it's
that the last year has brought everyone, clients included, back to
Gail Brown, general manager of Text 100's Rochester, NY office, says,
"Clients are more cautious, so it makes our jobs easier. In the past,
they were demanding to be on the cover of The Wall Street Journal. But
now a lot of tech coverage is negative, and journalists are pretty hard
on companies that don't have the numbers behind their stories." Brown
adds, "From our perspective, clients are much more open to larger
features in the trades rather than going into the traditional business
The landscape has also changed. Auerbach says he has noticed the absence
of venture capitalists, who demanded that companies raise their
visibility at all costs in order to set the stage for going public. "I
don't know of many start-ups that on their own said, 'We've got to have
branding and eyeballs over profits,'" Auerbach says.
"Many of them got a very strong message from their VCs, who were billed
as the experts in this area. If an investor who just put $30
million into a company tells you to pursue a strategy of getting
attention at all costs and your PR agency says you ought to go slow and
be very cautious and realistic, who are you going to listen to?"
Brown also notes that companies are de-emphasizing the internet
connection, all the way down to their names. "In the past, companies
wanted to put 'dot-com' at the ends of their names even if they weren't
dot-coms," she says. "Now you're seeing a lot of companies that 10
months ago would have surfaced as dot-coms downplaying the internet role
in their business models."
Another major difference is that now companies are less likely to issue
press releases unless they have something to say. "A year ago in the
branding frenzy, there were releases that were a stretch to call new,"
says David Armon, president of PR Newswire's Americas division. "Now
we're seeing more substantiative announcements from our clients." Armon
also suggests that agencies make use of tools such as PRNewswire's
ProfNet to better target potential journalists for stories before
sending out releases.
There are few taboos in PR these days, but holding a lavish publicity
stunt or expensive press event on behalf of dot-coms has definitely lost
its luster. "You have to be sympathetic to the editors' needs, and they
don't like stunts," explains Gallagher's Bitz. "All they want are the
facts on why this company is going to succeed."
SIGNS OF THE TIMES
Most of the attention in technology and internet journalism has focused
on the high-profile closures of The Industry Standard, Revolution, and
the merger of Business 2.0 into eCompany. But these struggles aren't
occurring in a vacuum, and a glance at any technology or internet
publication shows that things are tough all over.
According to the Publishers Information Bureau, technology publications
have been the hardest hit of any advertising category. Ad pages in
technology publications are off nearly 36% to 12,184 for January to July
2001 (compared with 18,193 the previous year). Ad dollars for these
publications are off nearly 23% at $783 million for the same
Even the survivors, such as Red Herring, are struggling with the current
economy. Its July 2001 ad pages were off a staggering 76% from the same
month in 2000.
The dot-com bust and subsequent stock market turmoil has impacted
traditional business magazines as well. Forbes' July ad pages were off
60% from a year earlier, while Fortune suffered a 33% ad page drop.