SILICON VALLEY, CA: Fortune 50 companies eBay and Cisco are currently among the throng of Bay Area companies looking for new agencies, demonstrating that business continues to grow robustly on the once-moribund region.
For the first time, eBay is hiring a corporate AOR rather than just piecing off various parts of its business to different agencies. Cisco has consolidated its corporate communications department and is looking for strategic direction in the next phase of its growth, said Terry Anderson, senior director of Cisco PR.
While contending agencies are taciturn when asked what business they're pitching or what else is out there, they have no trouble throwing out figures in the millions of business on the table; however, PRWeek could not comfortably verify a figure.
Cisco, specifically, is looking to build upon its momentum. Anderson said the company has embarked on the next phase of its growth, moving into new markets, and telling the story of the power of networking and what it calls "the Human Network."
"Cisco has taken steps to make its communications even more strategic," she said.
Weber Shandwick, the incumbent for Cisco, did not return calls for comment as to whether it will defend the account.
Ebay works with a handful of firms on different aspects of its business: Access Communications for Shopping.com and part of PayPal; Text 100 for computer services; and Kaplow PR, among others. "Their business is not at risk," said Hani Durzy, director of corporate communications for eBay.
Cisco said its decision was imminent, while eBay planned to pick a winner in late February. McAfee, the anti-virus software maker, also issued an RFP for a new global agency in 2006.
While it's not uncommon for a few of the area's major corporations to be reviewing, there are also a multitude of start-ups searching the Bay Area for PR representation.
"I'm as swamped as I've ever been," said Linda Clark, EVP of Eastwick Communications. "We have an incredibly long list of large to small companies calling - and not just from the Bay Area."
"There is a good deal of business floating around," said Bob Angus, president of A&R Edelman. "It's not like the old days, the 1999 days, when things were more freewheeling. It's more measured."
While the market is strong, Burghardt Tenderich, GM of North America for Bite Communications, said the accounts up for grabs could be indicative of the new year and business cycle because changing agencies has a degree of seasonality.
Tenderich said he saw a lot of new-business inquiries in Q3 and Q4 2006, and in general the Bay Area is exiting its slump. "It's been growing gradually," he said.
It's been eight years since the height of dot-com craziness in San Francisco and the Silicon Valley. Those days are over, and experts say the area is older and wiser.
"Clients are more cautious about the way they are doing things," Angus said, "but it is reasonable. There is a tremendous amount of business, and I am hoping it is not so much that it will stimulate agencies to employ the turn-and-burn from a while back, when they will hire anybody to get the available business, whether qualified or not. That certainly is a bad thing for the profession in general. It puts junior people in the line of fire and inflates the salary range."
Cycles aside, the area does have its recent success story, which proved the world of start-ups could again produce viable, profit-turning businesses. Google snapped up online video site YouTube last October for $1.65 billion, becoming the largest purchase Google's ever made.
The tiny San Bruno, CA-based company with 67 employees had been started by two 20-something men and quickly took over the Internet as the top destination for video uploading, with 19.1 million visitors in August 2006.
"This is the next step in the evolution of the Internet," Google CEO Eric Schmidt said at the time.
"We're getting a lot of leads. Business is booming," said Giovanni Rodriguez, principal of HubbubPR, which opened last October. "More and more global companies are going to the Valley looking for talent. It's a steady stream of leads."
And like most veterans of the Gold Rush-like dot-com days, he is cautious.
"I wonder if it will succeed to the end of the year," he said.