Chicago PR feels the pinch as the tech market slumps

CHICAGO: A tech wreck has hit Windy City PR. One firm is pulling out of the tech PR business, another is merging and others are saying clients are cutting budgets or dropping PR completely.

CHICAGO: A tech wreck has hit Windy City PR. One firm is pulling out of the tech PR business, another is merging and others are saying clients are cutting budgets or dropping PR completely.

CHICAGO: A tech wreck has hit Windy City PR. One firm is pulling out of the tech PR business, another is merging and others are saying clients are cutting budgets or dropping PR completely.

'I think any agency that hasn't been affected is lying to you,' said Howard Solomon, MD with Ruder Finn's Chicago office.

KemperLesnick Communications is shutting its tech PR practice and, as a result, laying off five PR people. President Hud Englehart admitted his firm was late into the tech PR game and, as a result, took on start-ups and early-stage clients that left him with unpaid bills.

'We have some receivable issues,' he said, but would not comment on how much the agency is owed. Jim Martinez quit as president of the firm's PR unit last November, reportedly because of problems with tech clients.

Buzz msp, a firm started by Web incubator Divine InterVentures, is merging with two of Divine's sister firms to form an as yet unnamed new company to lessen its reliance upon tech clients. 'We were looking to strengthen the breadth of services that Buzz offers,' said Dave Onak, VP of PR.

While Buzz initially did PR work for other Divine companies, it has been trying to diversify. By the end of 2000 it was getting 75% of its business from non-Divine companies. But a slowdown in the Chicago tech world has hurt. 'That's been a challenge for us like it has for everybody else,' Onak said.

Buzz is not ruling out future mergers or even a sale of the company.

Meanwhile, the head of Ogilvy's Chicago tech practice has left, but Brad Wilks, managing director of the Chicago operation, denied any connection between the departure and a slowdown in tech business.

PR21 Chicago EVP and general manager Paul Battaglia called the climate 'volatile,' with some clients cutting PR budgets and others outside PR work.

Well-publicized financial and business problems at firms such as Divine, at long-time corporate icon Motorola, and at Web consultant Marchfirst - which this week laid off 550 additional employees after the initial 1,000 last fall - has cast a pall over the Chicago tech scene.

Solomon's solution has been to look outside Chicago for new tech business.

'There's definitely some pessimism that's pervading the Chicago tech community,' he said.



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