About.com recently sent out a press release proudly trumpeting the company's third consecutive quarter of "narrowing losses." It's ironic to think that investors riding out the
country's greatest economic boom of all time might revel in this sort of air-spun proclamation. But such is the new economic order, in which PR practitioners regularly are called
on to position start-ups to be bought out on the strength of ethereal concepts, not old-fashioned products, services and earnings.
Public relations for this high-tech set ain't what it used to be.
"Obviously there's an incredible pressure on speed - being first to market, getting your name out there first, getting traction in the market," says Steve O'Keeffe, president
of O'Keeffe and Co., a McLean, Va.-based agency. "But in many circumstances, we've seen companies try to go out too quickly with ideas that aren't fully baked. We have a
responsibility to the editorial community, so we spend a lot of time putting the brakes on [high-tech CEOs who want media attention]. And a lot of time, those people don't
understand."
Start-up corporations and dotcom businesses can't be blamed for their eagerness to plug their product concepts into the veins of public discourse. After all, new economy
business owners often have goals that aren't in line with what they teach at PR school.
"There's a trend, especially among pre-IPO companies and dotcoms, where businesses have absolutely no interest in building a brand or developing a strategic media relations or
investor relations campaign. They might not even have any plans to offer a product or service," says Jessica Blue, associate VP for Raleigh, N.C.-based Richard French &
Associates. "Some just want to get the attention of investors for an IPO or to get on the radar screen so someone can buy them out... There's definitely the potential for PR
practitioners to lose credibility working for a client that never intends to build a brand. If the point is to raise venture capital or to get bought, that changes the role of
what PR is designed to do."
This trend poses a renewed challenge for an industry still reeling from its former rap as a profession of mercenary spindoctors. Flacks peddling Web miracles that will
eventually dissipate into thin air are quickly becoming the snake oil salesmen of the new economy.
Although the short-sighted PR approach has helped mint more than a few millionaires, dotcoms that have invested more heavily in their brand image than their IPO price tag are
racking up more long-term successes - and are churning out multimillionaires.
Big Brand, Bigger Bucks
Consider Priceline, which launched in April of 1998. At the time, no one was doing e-commerce brand recognition studies - giving a sense of how little branding figured into
the equation for this new breed of companies. Instead of falling into the get-rich-quick trap, Priceline went with a get-known-quick plan with its approach to building a brand as
quickly as possible.
"We had no thought of going in for the quick buck, and I think that mindset helped us tremendously," says Brian Ek, VP of communications at Priceline.com. Armed with an
intriguing value proposition for customers and a highly recognizable spokesman in William Shatner, the company worked to build a positive and powerful name for itself. Priceline's
tracking (performed by Princeton, N.J.-based Opinion Research) showed that in the fourth quarter of 1999, about 40 percent of those who were familiar with Priceline first heard
about it through PR efforts, not ads.
With extensive media coverage, Priceline was the second most recognizable e-commerce name after Amazon.com only six months after launching, according to one of the first e-
commerce brand recognition studies, which was sponsored by Priceline.
"In theory, there is no difference [between high-tech and old economy PR], because the techniques are essentially the same and the goals should be the same," says Ek. "The idea
still is to get out there and develop a brand and relationships."
Following the old economy model - albeit at a much faster pace - Priceline has had eight consecutive quarters of increased revenue and decreased losses, and analysts predict it
will actually turn a profit by the end of this year or early next year. According to its most recent study, Priceline is in a statistical dead heat with Amazon for online brand
recognition supremacy.
"There's two to three times more clutter in the e-commerce space than there is among smokestack companies, so you have to be smarter and more creative in your approach. Plus
it's considerably faster paced," Ek says. "High-tech PR is just like standard PR, just more so." Which means old school branding rules still apply. Believe in the brand you
represent, or stakeholders may stop believing in you.
(Blue, 919/832-6300; Ek, 203/299-8167; O'Keeffe, 703/883-9000)
Princes of Branding, Kings of the Web
What makes an e-superbrand? Connectivity and category domination, according to the Y&R brand consultancy Landor Associates. "Connectors" such as AOL are sites users pass
through every time they log on. "Category definers," such as Amazon, eBay, MP3 and Linux, have won accolades for changing the playing field in their markets while making
themselves essential to consumers' every day experiences.
|
Top 25 Technology/Telecom Firms as
ranked by the Council of PR Firms |
|
|
Company
|
1999 Rev. (high-tech)
|
| 1 Fleishman-Hillard |
70,408,000
|
| 2 Waggener Edstrom |
49,372,000
|
| 3 Ogilvy Public Relations Worldwide |
44,502,700
|
| 4 Shandwick International |
43,782,329
|
| 5 Edelman Public Relations Worldwide |
43,212,696
|
| 6 Brodeur Worldwide |
42,400,000
|
| 7 Burson-Marsteller |
39,939,000
|
| 8 Porter Novelli |
37,903,000
|
| 9 Weber Public Relations Worldwide |
33,322,654
|
| 10 BSMG Worldwide |
28,756,000
|
| 11 Hill and Knowlton |
25,300,000
|
| 12 Ketchum |
25,200,000
|
| 13 Cunningham Communication |
23,379,560
|
| 14 Schwartz Communications |
21,043,233
|
| 15 Manning, Selvage & Lee |
18,788,400
|
| 16 Ruder Finn |
18,071,000
|
| 17 Lois Paul & Partners |
16,243,872
|
| 18 TSI Communications Worldwide |
15,099,219
|
| 19 Fitzgerald Communications |
13,441,001
|
| 20 Golin/Harris International |
13,175,000
|
| 21 The MWW Group |
13,011,720
|
| 22 GCI Group/APCO Associates |
10,291,592
|
| 23 Neale-May & Partners |
8,951,918
|
| 24 Wilson McHenry Company |
7,800,000
|
| 25 The Hoffman Agency |
7,800,000
|