10th anniversary: technology analysis

Tech PR's story over the past 10 years is defined by tales of hype, fallout, and ultimate maturation - the parabolic boom and bust known to all.

Tech PR's story over the past 10 years is defined by tales of hype, fallout, and ultimate maturation – the parabolic boom and bust known to all.

Today the industry is structured and solid, marked by a dedication to measurement and helping clients realize sound business goals. But the industry barely survived the cataclysm in 2001.

PRWeek's 2000 hi-tech rankings issue stands as an artifact to the spectacle. Fleishman-Hillard – number two in the 1999 hi-tech rankings – jumped to number one after its hi-tech fees increased from about $27 million to about $66 million – or 142% – in one year. Hill & Knowlton, which acquired tech specialty shop Blanc & Otus in 1999, increased its unaudited PR revenues from about $3 million to about $25 million, an increase of 691%. Only three of the top 25 agencies in that list saw their hi-tech revenues grow less than 20%.

“Silicon Valley is a crazy place anyway, but if you combine that with the dot-com energy – the entire PR industry was on fire,” says Aedhmar Hynes, CEO of Text100. “It was hard to tell what was symptomatic of Silicon Valley and what was symptomatic of that period of time.”

“You never knew what the strategy was going to be or what the CEO would want to measure the next quarter,” adds Josh Reynolds, global tech practice director at Hill & Knowlton.

It was also a boom time for tech PR acquisitions. Ogilvy acquired Alexander PR in 1998, and on July 30, 2000, Incepta Group acquired Cunningham Communications for a reported $75 million. Euro RSCG acquired Middleberg in that same year.

In 1999, Omnicom was folding Copithorne & Bellows, which it acquired in 1995, into sister agency Porter Novelli. Rich Moore, a founder of C&B who is now principal at New Venture Communications, says acquisition was an attractive outlet for boutiques whose clients were rapidly growing.

“We were predominantly a b-to-b tech agency with just domestic offices,” Moore recalls. “So [through the acquisition] we could address consumer marketing needs and offer international support.”

Susan Butenhoff, founder of Access Communications, says she did not sell her agency amid the M&A frenzy because the acquired technology firms lost much of their identity.

“At the end of the day, they didn't get anything but an early retirement,” she notes. “But I don't know if that's what their intention was.” (Ketchum bought Access in October 2008.)

As everyone recalls, the party suddenly ended with a chilling tragedy in New York and seemingly bottomless fallout in Silicon Valley.

“If you talk to the clients they'd say [the bottom fell out] a lot sooner than 2001,” says Tim Dyson, CEO of Next15. “But they took [9/11] as a chance to finally say, ‘OK, the world has changed and we don't need to pretend anymore.'”

Highly touted startups like Webvan.com and Pets.com flamed out by 2001, and those companies that survived went from spendthrift to frugal marketing budgets seemingly overnight.

PRWeek's 2002 hi-tech rankings issue, which looked at revenues from 2001, tells the story. Top tech firm Weber Shandwick's hi-tech revenues dropped 27%, Fleishman-Hillard's dropped 20%, and Ogilvy PR fell 50%. When tech powerhouse Niehaus Ryan Wong closed its doors in 2002, the future of tech PR seemed in peril.

But by 2003, the sector was limping its way back. Tech company mergers – like Oracle's hostile takeover of PeopleSoft – made it clear that Silicon Valley needed savvy communications tactics. Steve Swasey, now VP of corporate communications at Netflix, was director of PR at PeopleSoft during the takeover.

“It was 18 months of hand-to-hand combat,” he says. “It was very much like a campaign – each party tried to get as much into the news cycle as they could, and Oracle prevailed. I think it elevated the tech world [in the eyes of] mainstream media.”

Scandal rocked the tech world in 2006 when Hewlett-Packard chairman Patricia Dunn was involved in an initiative to root out leaks in the company's board. The effort ultimately led to third-party spying on the board and journalists, about which Dunn has denied knowledge.

Ryan Donovan, now senior director of corporate communications at SanDisk, was director of media relations at HP during the incident.

“There was this perception that there were 30 people inside HP working on that crisis but it was just three of us,” he recalls. “We didn't just get calls from one beat reporter; it was, like, 15 re-porters at [The Wall Street Journal], then, like, 12 from [The New York Times].”

By 2007, there was no denying that tech had fundamentally altered PR. David Krane, director of corporate communications at Google, observes, “The rise of online news has also brought new mechanisms that enable readers to respond and ‘speak back' to news articles in essentially real time.”

Tech PR has become a prominent industrywide revenue and growth driver. In 2008, as the economy deals with a financial crisis, PR pros may worry about tech's immediate stability, but not its future prospects.

“Who knows what we're in store for,” says Sabrina Horn, founder of the Horn Group. “No doubt it will be serious, but I think [PR] learned [its] lessons from last time. Maybe this time, technology will help rebuild the economy.”

Looking back
2000 - Y2K
The industry banded together to prepare for the anticipated crisis communications situation that never arose

2001 - Launch of iPod
It's hard to believe today, but Apple was a languishing company before it launched the digital music player that changed its fortunes

2002 - Niehaus Ryan Wong closes its doors
When the agency that built its brand on the dot-com wave called it quits, even the most optimistic knew the party was over… until it wasn't again

2006 - Hewlett-Packard “pretexting” scandal
Hewlett-Packard overstepped brand reputation management when it hired a contractor to root out boardroom leaks

2006 - Google buys YouTube
Speculation of another bubble surfaced when Google paid $1.65 billion for YouTube. It hasn't burst… yet

Five technology companies excelling at PR
When Apple unveiled the iMac in 1998, it was already on the road to an impressive comeback. In an era of calls for more transparency, the company has nonetheless managed to delight fans with its drawn-out product unveils.

In 1998 Google was still a startup barely making waves outside Silicon Valley. Ten years later it's the biggest name in tech. Google's success has allowed it deep leverage on how it works with long-lead publications, where the company pushes its reputation as a socially-conscious company and market leader.

Facebook's staggering momentum has turned it into the biggest success story of Web 2.0. It made some major PR gaffes with its advertising model, but it regained its footing and this year it dethroned MySpace as the largest global social network.

Some say the days of "rock star CEOs" are over, but Salesforce.com has successfully led a personality-based PR strategy by showcasing charismatic CEO Marc Benioff.

Sun Microsystems
Sun Microsystem's CEO, Jonathan Schwartz, is considered one of the most influential and relevant CEO bloggers. Schwartz has long been an advocate for using blogs to disclose financials and communicate about a company.

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