RETHINKING HI-TECH PR: As the Nasdaq continues to fall, hi-tech PRpractitioners are devising savvy ways to draw attention to clientsRobin Londner reports

In the world of hi-tech PR, 1995 is an eon ago - back when

Netscape's IPO was the most successful in history, raising dollars 1.07

billion with no profits and an uncertain business plan.

Fast-forward to a few months ago when Marc Andreesen, founder of

Netscape, offered his newest business venture on the Nasdaq: an

18-month-old Internet software firm called Loudcloud.

The profits were still zilch. The business plan was a little more


But the IPO price was reduced twice, and the company fell dollars 50

million short of raising its dollars 200 million cash goal.

Even so, Marlena Fernandez, director of PR for Loudcloud and a

seven-year tech PR veteran, is happy that the IPO even went ahead, given

the current environment.

'We're the only Internet IPO to make it out this year,' says


'We measure success by that.'

Canceled IPOs are a sign of the times. In the past year, the tech-heavy

Nasdaq lost dollars 3 trillion in value. Even bellwether tech stocks,

such as Microsoft, Cisco and Dell, fell as corporations cut revenue

projections and staff. The hi-tech shockwaves have led corporations and

agencies to alter the way they approach tech PR, and it has produced

changes in media relations, staffing patterns and even business


Rodger Roeser, senior PR consultant at HSR Business to Business, a

Cincinnati agency catering to b-to-b Web sites, says the dot-com days

provided PR firms with near-perfect conditions - new technology

magazines were hungry for editorial content and clients with faith in PR

had money to burn.

'The whole dot-com love fest extended the parameters of what we could do

with the profession,' says Roeser. 'We had young, aggressive companies

run on an idea and a lot of investment money. They could afford to spend

money on the focus groups and all the things you'd like to do in a

perfect PR world.'

But the seeds of today's hi-tech PR problems were sown in those boom

days. Rick Sharga, EVP and general manager of neoBrands, a 15-month-old

firm targeting e-business and b-to-b ventures, says inflated salaries

and greater opportunities for practitioners led to a dramatic talent

dilution on both sides of the media relations equation.

'Suddenly, inexperienced PR folks were pitching unseasoned writers,'

says Sharga. 'The results were about what you'd expect. The press lost

credibility and PR as a profession became subject to scorn by

journalists and the public at large.'

Roeser agrees, saying this has led to PR's current problems with a

highly suspicious media.

'On some level, I think the media felt they'd been had,' says


'Because of the media feeding frenzy of the past, bringing about

coverage for legitimate, good Internet technology-based companies is now

virtually impossible.'

Money talks

But the difficulties aren't just a result of reporters being more

cautious about hi-tech pitches.

A study by the Magazine Publishers of America shows that technology

publications have themselves been a big loser. Pagination fell by 24%

year-on-year for the period ending March 2001. Most of this reduction

occurred in the last three months. During that time, a number of hi-tech

magazines either folded (Business 2.0) or went from resembling telephone

books to virtual pamphlets (Wired, Red Herring).

Larry Sennett, managing director of Ogilvy PR's global technology

practice, says these figures, coupled with reporters' skepticism, make

for a 'treacherous' business media environment for technology companies.

The days are gone when consumer PR could be used to stoke a company's

stock value, he adds. Today what's needed is a more targeted


'In this economy, PR alone can't promise to stabilize a stock price,'

says Sennett. 'We are advising our clients to focus on selling products

and building customer relationships in a way that leads to profits and

helps earn proper valuations in the market.'

Sennett says a more targeted approach means tech companies need to

tailor internal as well as external PR messages. 'Providing key

constituencies, like shareholders and employees, regular updates on the

business can help to foster confidence and, by extension, support their

businesses through this cycle.'

Steer clear of hostile media

Ed Gala, director of worldwide PR for Xerox, has another piece of

advice: 'Don't deal with hostile media if you don't need to.'

Gala heads a 20-person, in-house team, with backup from agencies

including Text 100 and Burson-Marsteller. He believes the tech world

should take advantage of the Web to communicate directly with audiences,

side-stepping media naysayers.

'In tech, PR is more important now than it has ever been,' says


'Traditional media are less important than they used to be, though,

because it is easier to directly communicate to your customers through

your Web site, newswires and online media.'

Gala says using direct communications is also important internally,

especially to provide follow-up to an article. When the media writes

about Xerox, the PR team lets employees know why the article appeared,

what was accurate and what it means for the company.

'We had a major press event in New York, and we did a simultaneous

broadcast of it to 90,000 Xerox employees worldwide via closed circuit

TV,' says Gala. 'In the past we might have kept the event for press and

analysts only, but because it was so vital to communicate our new

message to our people, we used it more than we might have in the


Innovative practice

Sometimes a client's industry is so new that there may not even be a

category for it on Internet search engines, much less a media outlet to

pitch. So a PR person interested in garnering media coverage has to come

up with other ideas.

The broadband wireless industry was in its infancy when Robert Hoskins

of Front Page Public Relations took on Andrew Corporation as a


The supplier of communications systems equipment and services needed a

place for people to research and learn about the industry to better

understand products and events, but there was only one industry

publication, a monthly magazine, which was slow to update its Web


So Hoskins created the Broadband Wireless Exchange Press Center, a Web

site that he says currently gets more than 50,000 hits a month. Site

traffic is growing about 200% a month, and Hoskins reports that the site

has become the focal point for the industry, which has grown to more

than 600 wireless Internet service providers and 300 vendors.

'It was never intended to become a publication, but many people think of

it as one,' says Hoskins. 'The news is as fresh as it gets - right off

the newswires every day.'

Train employees

But the media cannot be ignored, and with the relationship strained by

poor practice in the past (not to mention layoffs) a new development is

to address this internally with employee training.

In 2000 there was a 50% turnover in tech practitioners, as people moved

from agency to corporation and back again lured by salary


The constant job-switching led to a perpetually uninitiated work


To correct the problem, today's agencies need to invest in internal

programs to ready their teams before letting them loose on a

less-receptive media.

John Graham, CEO of FleishmanHillard, says the extra time created by a

reduced workload must be put to good use. 'People will have more time to

train, as recruitment is no longer an issue.' However, as cost-cutting

continues, training has become an early target at some agencies

Go in-house

On the corporate side, some hi-tech companies have resorted to another

old-fashioned solution: they've moved their PR function in-house.

Steve Friedberg, director of public relations for BakBone Software, a

manufacturer of backup and restore software, says he's considering

bringing the PR function in-house because his agencies just don't

understand his company's technology.

'I can't tell you the number of reporters I talk to who bemoan that

agency people read from a press release script and can't ad lib from it

or answer questions,' says Friedberg.

He admits that the complex needs of a tech company like BakBone make it

hard to find one agency that can serve all its needs. For example, there

is an agency in Los Angeles that specializes in PR for data storage

companies, but it isn't as strong as Friedberg wants in dealing with

business media.

'We worked with them, but we're publicly traded, so we need strength in

business media,' says Friedberg. 'If we were private, I'd be back to

them in a second.'

Agency shift

So as not to lose out on clients, firms are adding to the list of

services they offer, and in turn are expanding their options while

remaining in the tech arena. Agencies have added tech practice areas in

IR, public affairs and analyst relations.

Tony Sapienza, president of Miller/Shandwick Technologies, says the boom

forced his agency to abandon its requirement that staffers have a

technology PR background. When the boom went bust, new hires with

experience in other sectors had time on their hands to create new

practice areas, which Sapienza says translated into more streams through

which client cash can flow.

'In the past couple of months, we've seen the new business environment

get a lot more competitive. As agencies have to work harder to

distinguish themselves, for us to step up to the table with these

additional services is an advantage. It catches (the clients') eye.

Rather than see the traditional PR options put on the table, we're

talking about tech public affairs and other things they don't usually

see from agencies.'

A similar broadening of practice areas has happened at Brodeur


In 1999 the tech group formed a practice focusing on healthcare. In

addition to working with b-to-b software and hardware companies

marketing to the healthcare industry, the practice also works with

companies that manufacture medical devices and diagnostics.

John Brodeur, president, says the healthcare practice is just one

example of tech PR branching out beyond hardware and software, while

still retaining a technology focus.

'Technology is pervasive,' says Brodeur. 'Because it's a ubiquitous

element in every facet of every company, we have been successful in

leveraging a tech core and expertise for a number of organizations in

the consumer, health and financial services fields.'

Tech practices also increasingly offer services to the same blue-chip

companies they scorned as Old Economy a year ago. Weber Group SVP Patty

Stone works with e-GM, the online component of General Motors. She says

the account has allowed the agency to use its tech expertise with

Fortune 500 companies.

Changing from blast faxes to targeted press calls, and from dot-coms to

tech slivers of brick and mortar companies, has allowed tech PR to prove

its value, despite media and consumer resistance. Maureen Cappon-Javey,

director of communications for Silicon Valley-based Benjamin Group/BSMG,

says tech's ducking and pirouetting response to change is the natural

result of the intersection of three trades that are by nature very

erratic: technology, PR and the media.

'Technology changes quickly, and reporters change their beats quickly,'

says Cappon-Javey. 'Trying to get a handle on where your client is

headed, where the competition is going and where the media stand isn't


At the end of the day, however, the new environment - negative and

potentially hostile - makes it incumbent upon PR practitioners to be

more informed than ever of market conditions, and of how they might

affect their clients.

For out of that knowledge, stories and ideas must surely spring.


Lesson 1

Consider corporate philanthropy

When Akamai Technologies' self-proclaimed 'King of the Internet' CEO

George Conrades realized the attitude toward start-ups was changing, he

launched the Akamai Foundation, committed to math education in grades


Initially dreamed up by employees who volunteered to work with

struggling math students, the now multimillion dollar foundation has

created an interactive Web site called 'The Magic of Math,' where kids

ask experts for help with their homework. Experts include MIT


Maria Brown, an account executive at Akamai's agency NYPR, said the

media loves the homework help angle.

'Technology companies still think about broader issues like the

community, even when market conditions are tough,' she says. 'New

technology firms increasingly look for PR firms to do it all, from

competitive research to naming companies and products.'

Lesson 2

Get employees on the same page

'Stupid Marketing Tricks for Start-ups' is the brainchild of 30-year

tech veteran Gabe d'Annunzio, strategy thaumaturge (miracle worker) at

KHJ Public Relations in Boston.

One of the things the free seminar teaches start-ups is how important it

is for every employee to agree on the company's focus.

An exercise called the 'Law of Small Rooms Trick' holds that if a

visitor asks an entire company assembled in a small room what business

they're in, that company's survival can be accurately predicted if

anything more than a single response comes from all corners of the room.

The company is not likely to survive if there is not employee consensus

on the nature of business.

The seminar also teaches a message-development process that helps

companies capture and relate their niche appeal. It can be used with or

without outside PR counsel.

KHJ in turn uses the seminar to differentiate itself in new business


According to d'Annunzio: 'We think it helps build our credibility as

strategic advisors if we teach our clients how to avoid pitfalls that

can impede their growth.'

Lesson 3

Good ideas and stories still count

Two-year-old is a b-to-b site that sells promotional

products online. The company used outside PR help, but couldn't get

coverage until an in-house team created the Brandy awards, which honor

the best giveaway of the year and were designed to elevate promotional

products in the minds of marketers. The awards garnered coverage in a

variety of media outlets, including Fortune Small Business, Internet

World and CBS News. 'We wanted people to recognize that promotional

products are cost-effective, brand-building options,' says Taj Alavi,

Branders marketing programs manager.

'How much more effective can you get than giving a reporter a pen to use

to take notes?'

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