FOCUS: HI-TECH PR - Keeping a safe internal distance/Good hi-tech PR specialists are always in demand, so what is an agency to do when it’s being sought by rival companies? John-Pierre Joyce examines the issue of client conflict in the technology

When software company Compuware dropped Firefly in September just two weeks after appointing it, the agency’s competitors allowed themselves a wry smile. History, its seemed, was repeating itself.

When software company Compuware dropped Firefly in September just

two weeks after appointing it, the agency’s competitors allowed

themselves a wry smile. History, its seemed, was repeating itself.



The episode was prompted by the almost simultaneous hiring of Firefly by

Informix Software, the data management firm, which had earlier parted

company with Band and Brown Communications. Compuware argued that the

double hiring posed a market risk because both Informix and Compuware

faced head-to-head competition with their respective development tool

products: Uniface and New Era.



Only 18 months before Firefly had faced a quandary when Compaq offered

the agency its PR account while it was still working for Apple

Computer.



The offer was made after Compaq’s previous agency A Plus switched to

arch rival IBM. In the end Firefly opted for the Compaq account and

Apple lodged with Bite, the second string agency set up by Text 100.

Text could not itself take on the business because of existing

commitments to Microsoft.



Both episodes highlight the difficulties faced by hi-tech agencies in a

booming market. As the demand from IT companies for PR services grows,

specialist agencies are increasingly having to dodge the inevitable

conflicts.



As Bill Penn, managing director of Spec Communications, points out, the

problem arises from the increasing diversity of the technology

sector.



Big hardware companies in particular are branching out into software,

Internet and Intranet services and competing with established firms

within those niche areas. ’What you have to watch theses days is where

your client might go,’ says Penn. ’Suddenly a conflict may arise, even

if there wasn’t one before.’



EMC managing director Richard Price agrees: ’There are so many strategic

alliances that if a company asks you to pitch sometimes you don’t know

whether to say yes or no. Equally your clients may not object initially

but they may later on.’



At the same time, the number of reputable hi-tech agencies remains

small, leading to demand overload from potential clients. ’When clients

look for an agency they want expertise, experience and good contacts,’

says Fodor Wyllie director Grace Fodor. ’But there are only a few

agencies that offer that, and if you are good you’ll get more than one

company asking for you. At the end of the day it comes down to

professionalism and integrity. If confidential information about one

company slips to another that you are handling you won’t get very far in

this industry.’



Head on conflict is rare and companies are usually careful to guard

against it before signing up an agency. A Plus, for example, is

contractually bound by IBM not to work for its five biggest competitors:

Compaq, Microsoft, Oracle, EDS and Hewlett-Packard. More usually,

clients will overlap in a few areas only. A Plus, for instance, happily

accommodates Pyramid Technology and Silicon Graphics, which, together

with IBM, manufacture servers.



When competitors do collide, most agencies choose to erect ’Chinese

walls’ to safeguard client confidentiality. Firefly, for example, gave

assurances to Compuware that it would use separate account teams in

different parts of the building to avoid any clash with Informix. In

addition, it has the facility to restrict access to parts of its own

server system and exclude unauthorised users. Yet Compuware remained

unconvinced.



’All leading IT agencies are bound to have some crossover and I accept

that, but (the launch of Uniface) was spearheading our drive into the

client server market,’ argues Compuware marketing manager Andrea Cross,

who took the decision to jettison Firefly. ’Chinese walls weren’t enough

in this instance. It is difficult for Compuware because we straddle so

many different product areas and we are going to compete with other

clients.



At the end of the day it all boils down to the individual

situation.’



Firefly director Mark Mellor accepts that the client’s say is final, but

thinks that distrust of Chinese walls ignores the internal dynamics of

consultancy work. This, he argues, can provide strong security against

information leaks: ’In reality we could handle more competing business

because the teams work for themselves and they want the credit for what

they do for their clients.’



Jonathan Simnett, director of A Plus, agrees. ’Within our internal

structure we have business unit teams which only work on those units, so

they are effectively sealed,’ he says. ’People are also remunerated

according to the work they do and are motivated to work their best for

their clients.’



GBC director Jill Coomber even thinks that housing competing companies

under one roof can be an advantage. In addition to the depth of

experience accrued, the agency also has a better chance of getting media

exposure for more its clients at the same time. ’If a journalist is

writing a feature on a particular sector, for example, they are more

likely to approach an agency that handles several clients in that area,’

she says.



Perhaps the most effective, if extreme, solution to the client conflict

issue is to set up a second string agency.



Firefly was the first hi-tech consultancy to adopt this approach when it

established Buffalo Communications in August 1994. Now a fully

independent company under managing director Nick Horley, Buffalo was

specifically set up to handle conflicting accounts and to enable both

parties to pursue potentially conflicting new business opportunities.

Although Firefly has no immediate plans to form another second string

agency, Mellor doesn’t rule out the possibility.



Similarly, Text 100 launched Bite in April 1995 to handle Apple. In

October last year Bite also picked up major accounts from Oracle. Text’s

work for Microsoft would have barred it from the business.



Although Text holds the majority shareholding in the agency, both sides

insist that Bite is a separate entity and has carved out its own

consumer-tech niche. ’It’s a subsidiary with separate accounts,

locations and staff,’ says Text director Andy West. ’We actually see it

as a competitor and have come up against them in pitches.’



Bite’s managing director Matthew Ravden, who is also a Text director, is

equally adamant that Bite is more than just an off-site office for Text.

’Setting up Bite wasn’t a fudge,’ he argues. ’We didn’t just move to a

different floor, and I would be surprised if some of the junior staff at

Text even know there is a link with Bite. It’s a friendly, rather than a

cosy, relationship.’



The Argyll Consultancies, meanwhile, splits technology clients between

Arrow PR and Abacus. Bracknell-based Arrow operates primarily in the

technical and business to business areas while Camberley-based Abacus

concentrates on branding and corporate work.



But as the number of hi-tech agencies grows steadily and companies face

up to the inevitable, the client conflict issue looks set to

subside.



’A lot of companies are turning a blind eye,’ says Bill Penn. ’People

expect that if you go to a specialist agency you are going to get a

level of conflict. But you can easily get by with confidentiality

agreements and applying them firmly in the agency.’



CASE STUDY: BT - ENJOYING A SMORGASBORD OF PR IDEAS



When it comes to calling on external PR advice, BT thinks it is good to

talk to as many agencies as it needs.



The telecommunications giant retains a roster of ten agencies, most of

which are involved in hi-tech and business-to-business campaigns. They

are: Profile PR, Spreckley Pittham, Scope Ketchum Communications, Spec

Communications, Jenny Bailey Associates, Sinclair Mason, Quentin Bell

Organisation, Band and Brown Communications, Penn Communications and

Burson-Marsteller.



As Christine King, BT’s marketing public relations manager, points out,

the company’s business activities are so vast - ranging from

residential, business and mobile telephone services to video

conferencing, managed networks, on-line services, data systems and

broadcast services - that it would be impossible to use a single

consultancy. ’No one agency could manage that amount of work and no

agency would want to because it would take up all their time,’ says

King.



Using a roster also spares a single retained agency from conflict with

any other potential clients operating in one or more of BT’s

markets.



All ten agencies liaise regularly with in-house campaign managers as

well as King and fellow marketing PR manager Karen Fenn. They also meet

every six weeks at the BT centre in Newgate Street, London. Each agency

discusses its campaign plans and there is the opportunity to exploit

crossovers and share ideas. ’We really do encourage communication,’ says

King, ’and you have so much creativity at your fingertips, that it’s an

advantage to BT. It also leads to a better service, for example, they

can suggest to each other which journalists to approach for a story or

feature. They are always swapping information and it creates an

environment that lets agencies work together and follow things

through.’



Although most of BT’s PR advisers would normally be fierce competitors

in the wider PR market, King finds that they work well together when

working for a single client. ’They really are grown up enough to realise

that there is enough work to go round,’ she says. ’When you pool them

together on a campaign they work as a team and communicate with each

other very well.



’There is no encroachment on each other’s patch and when we have a new

piece of business that comes up for pitch they know they can go for

it.



It’s the ones with the fresh ideas that will get the account. It’s a

good example of how we have managed conflict between agencies.’



CASE STUDY: WORKING WITH POTENTIAL CONFLICT



One of the fastest growing PR agencies in the hi-tech sector, Grant

Butler Coomber has had its fair share of client conflict headaches. But

companies such as software house Computer Associates are happy to retain

the agency while it also acts for competitors like The Dodge Group and

Centura Software.



GBC scooped the Computer Associates account in February 1995, while

Dodge Group was still a client. Over a year later the agency was hired

by Centura.



Dodge Group specialises in client server-based financial accounting

systems while Centura produces application development tools and desktop

database technology. Although they do not conflict directly, both

companies compete in their respective markets against Computer

Associates. The client server market represents around 20 per cent of

Computer Associates’ revenue while financial products account for rather

less.



Still, Computer Associates’ marketing director Jay Huff is comfortable

about GBC’s role. ’If (Dodge Group and Centura) were head to head

competitors that would change things,’ he admits. ’But they address

slightly different markets and we have a larger product portfolio. Had

they been different names - like Oracle, Informix or Sybase on the

database side and IBM for systems management - then my feelings would be

different.



’If you want an agency that isn’t working for any competitor you just

won’t find one. We could use another agency but our marketing department

is very small and it’s much easier to deal with just the one. I see it

as a liability that you have to manage. But GBC is very good about

telling us what they are doing and who they are working for.’



According to Amanda Hassall, senior account director at the agency, GBC

is careful to consider client sensitivities. ’If a client comes to us

which potentially conflicts with another we always speak to both

sides.



If they object we respect that and we have sometimes not taken on

business because of it.’



GBC also erects its own Chinese walls, although Hassall thinks that

safeguarding client confidentiality is really down to the

professionalism of PR practitioners.



’We have different account teams and the staff don’t cross over,’ she

says. ’But we don’t work in isolation either and will share information,

for example, if there are relevant features being planned. It’s more of

a trust thing. We encourage open communication here and it only helps

our agency if we can get publicity for all our clients.’



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