PR professionals who are willing to roll the dice with startup clients seeking to establish a leading brand in the explosive Internet marketplace can reap exciting profits - financially and professionally.
This philosophy made Melody Haller, president of the Antenna Group in San Francisco, a millionaire with considerable Web PR clout.
Since 1994, Haller has been taking the Internet gamble, taking up to a third of her compensation from company stock options. IPO success stories like Yahoo and Onsale are among the clients in which she has a sizable financial stake.
This partnership approach underscores the Antenna Group's corporate vision for developing client business and motivating its 19 employees to be passionate about the labor-intensive work required to launch successful campaigns, she says.
Its client list includes established and enterprising technology firms, including Bluestone Software, a Web application server company; Business Bots, a multi-agent system manufacturer that is years away from production; and Kana Communications, a unique customer messaging system developer.
In this exclusive interview, Haller identifies Internet PR opportunities and explains how to manage the often unreal exposure expectations of startup clients.
PRN: Where are the biggest Internet PR opportunities?
MH: There's a lot of very subtle integration of systems and infrastructure taking place in people's Internet habits. So Internet convergence is a huge area of opportunity for businesses to take advantage of the Internet as a customer distribution channel. We're within a year or two of these kinds of quantum expansions for crossover business.
But there's a tremendous tendency to overestimate the speed of adoption, and underestimate the speed of actual change. So, I'm patient and I encourage my clients to be patient.
PRN: Why do you become so involved in client business to the point of accepting stock options as compensation?
MH: It started at my former company, Niehaus Ryan Haller Public Relations, where I launched the electronic publishing practice. We were constantly being faced with startups that were cash-strapped. Taking equity was appealing to them. Some of our clients became vastly profitable [like Yahoo and Onsale] and we shared in that success.
PRN: It's quite a gamble, isn't it?
MH: It wasn't that hard for me to envision these clients as successful and to be able to see the factors that might lead to that success. In Yahoo's case, I would say that I even underestimated how successful they would be.
We decided to take no more than a third in equity from a client. Theoretically, the agency could still break even collectively. There were times when things looked very tight. Taking so much equity can keep short-term profit down and it can be a bit sobering.
But at the same time a couple of clients I have equity in have already doubled in value and they're not even public yet.
At Antenna, I have equity in six clients. I look for a company that has a very reputable venture capitalist. That reduces some risk. I'll only take equity for about six months, so I end up with about 25 to 100,000 shares. I don't think people realize the kind of multiples that happen in this industry.
In order for this approach to work, you also have to have someone who's good at internal management of PR campaigns and prioritizing employee time. My director Darcy Provo is especially astute at handling this aspect of the business while I concentrate on client and external business strategy.
PRN: How does this approach impact employee morale?
MH: There's a feeling that we're all in this together and we're all going to prosper. I think we've established a work environment people really enjoy.
I'm setting up a structure that when all of the equity becomes liquid it will go to Antenna employees in the form of bonuses, rather than me personally. My goal is for all of the account executives to be able to have a down payment for a house. I think that's great incentive for a young person, it gives them a sense of empowerment.
PRN: How does Internet PR compare to traditional PR?
MH: Encouraging people to suspend disbelief long enough to give something new a chance to take root is quite different from being a propaganda machine.
This is a great field for the talented liberal arts major who's a little bit of a technology voyeur. There is as much demand for someone who knows PR in this Internet technology arena as there is for top-level programmers.
The pay may not be commensurate at the early stages, but it gets pretty darn good when you've been there for a while.
PRN: How do you educate startup clients on the PR process?
MH: The educational process is usually saying you're not going to get a Yahoo launch in three months. It's going to take a while to build the value. There's tremendous noise and competition for media attention from startups, clients have to earn that media credibility.
Clients often think that by hiring a PR agency, they are buying media favors. That's simply not reality and it would be an insult to journalists.
Haller can be reached at 415/977-1910. The company Web site is http://www.antennapr.com.