MARKET FOCUS: INTERNET PR - Dot-com PR: back to basics. How are PRfirms getting around the problems in securing publicity for currentdot-com launches? One word: strategy. David Ward reports

In the middle of 2000, when the founders of 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

the subject.

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, 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 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, 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 Manya Chait, VP of'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 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 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 experts every

time they were putting together a compensation story," explains


Schwartz also worked with 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, 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


Lowered expectations

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."


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.

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