COMMENT: Editorial - New stock rules require IR caution

In a dramatic about-face, the National Investor Relations Institute (NIRI) last week decreed that it’s now OK for PR firms to accept stock from dot-coms in exchange for services, reversing a position it has long held.

In a dramatic about-face, the National Investor Relations Institute (NIRI) last week decreed that it’s now OK for PR firms to accept stock from dot-coms in exchange for services, reversing a position it has long held.

In a dramatic about-face, the National Investor Relations Institute

(NIRI) last week decreed that it’s now OK for PR firms to accept stock

from dot-coms in exchange for services, reversing a position it has long

held.



The first thought is that NIRI is leveling the playing field: a number

of highly respected agencies have taken stock in their clients, and the

ruling ensures that NIRI members don’t lose out on the windfalls now

available. It also helps NIRI agencies retain staff by offering an

attractive alternative to the lure of a stock-offering dot-com.



Still, was the timing of the announcement merely ironic (given that many

dot-com stocks are almost worthless now, and agencies are successfully

wooing pros back) or was it actually deliberate?



By making the switch, NIRI showed that it is moving with the times. But

it also demonstrated once again that it is focused on the interests of

its member companies. NIRI had found that the restrictive policy was in

some cases encouraging companies to go to stock promoters flying under

an IR banner - simple hucksters - and it felt this could actually damage

the reputation of the IR profession. Or as NIRI president Louis Thompson

tactfully said, ’Companies were not availing themselves of legitimate,

sound IR consulting.’



Nonetheless, it will take some careful monitoring to ensure IR

professionals do not themselves morph, subliminally, into simple ’stock

promoters.’ In IR, as in all aspects of PR, there is a fine line when

representing the interests of a client. (If you’re not trying to nurture

the stock price, what are you being paid for?) The inclusion of cash in

that equation complicates matters even further.





Hi-tech PR ain’t what it used to be



Remember Grumpy Old Man, the character played to perfection by Saturday

Night Live’s Dana Carvey? One can easily see the old codger looking at

our hi-tech rankings (p26) in disgust, saying, ’Phooey! In my day,

technology PR didn’t include investor relations, or public affairs, or

even that change management malarkey. We did product launches and trade

shows and we liked it!’



He’s got a point. These days, just about anything can be construed as

’hi-tech PR,’ and it usually is. Taking a retailer online? That’s

hi-tech.



Dealing with Wall Street analysts or Beltway regulators? That’s

hi-tech.



Or is it really?



Put it all together, and hi-tech PR rose a whopping 57% last year and

now accounts for 39% of total agency revenues, up from 32% in 1998.

Driving the growth are the global giants: Fleishman-Hillard’s hi-tech

operations constituted 36% of its PR income in 1999, up from 20% in

1998; at Burson, it tripled from 8% to 24%; and Hill & Knowlton’s

hi-tech share increased sixfold.



This is all well and good, but how much of the growth is coming from the

bread-and-butter work that created so many industry giants and is

responsible for the prominent role of PR in the technology world

today?



Put another way: Are agencies reclassifying consumer/corporate/financial

PR work as hi-tech to goose their numbers? Some agencies reported

revenue growth that was beyond impressive - it was ludicrous. Which begs

the question: what is hi-tech PR? One thing’s for sure - it ain’t what

it used to be.



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