PR LEAGUE TABLES: PR makes its way to IT boardrooms - PR companies specialising in information technology have become the industry’s fastest growers yet they must not lose sight of their core activity - good press relations

Technology now touches all our lives. It has certainly touched the PR industry. For several years, information technology - broadly defined - has been the fastest-growing area in public relations, and the trend shows little sign of easing.

Technology now touches all our lives. It has certainly touched the

PR industry. For several years, information technology - broadly defined

- has been the fastest-growing area in public relations, and the trend

shows little sign of easing.



The agencies in this year’s main table claim a combined income of pounds

87m from IT clients. This is equivalent to just over a fifth of the

industry’s total income, making it the largest specialist product

sector.



A year ago, in a slightly smaller table (128 entries in total), it

accounted for pounds 68m.



There are just a few hints that the market hasn’t been quite as buoyant,

perhaps because the ultimate customers for technology have been

sidetracked by Millennium Bug concerns. Nevertheless, IT specialist

agencies such as Firefly, Text 100, Le Fevre, Fodor Wyllie and

Stewart-Muir figure among the PR industry’s fastest growers (page

37).



Little wonder, then, that the biggest and hungriest of the international

PR networks are anxious to get a slice of this business, if they don’t

have one already. Firefly director Mark Mellor says the large

international groups are the worst culprits for poaching staff, rather

than other specialists.



Adds Grace Fodor, a founding director of the comparatively small

specialist agency Fodor Wyllie: ’The big threat to us is not other

independents, but the big conglomerates, which are desperate to get into

new media.



If we can’t compete on the kind of fees being tossed around in the

marketplace, how can these big companies do it?’



Strategy building



Whatever the truth of this, Countrywide Porter Novelli is one of the

industry leaders that has chosen to avoid the stampede. Admittedly, in

Brodeur A Plus it has a sister agency specialising in high-tech work, to

which it can refer business. However, Countrywide managing director Paul

Miller says that he prefers a strategy of building on existing strengths

’rather than feeling that we have to dissipate our efforts by being in

every sector that moves’.



On one level, it is not surprising that the buoyant IT market should

remain such an avid client for public relations. Text 100’s managing

director Katie Kemp has been with her agency for nine years, and says

that in the early days PR was an activity clients undertook because it

was ’a good thing’. They gave little thought to how it might affect

their bottom line.



’What we have seen in the past three or four years is a lot of clients

launching products without any advertising support,’ she adds. ’It means

that the results are purely down to public relations. Because of that,

PR has finally entered the boardroom. Advertising is great for building

brands. But if we did not have journalists writing about technology, and

events which we create for people to learn about technology, there would

not have been anything like the uptake that we have seen.’



Big players still dominate



But Kemp also points out that one might have expected more consolidation

among high-tech companies, which in turn would have tended to lead to

the consolidation of PR accounts into fewer agencies. On the contrary,

the big players such as Microsoft, IBM, Intel and Compaq continue to

dominate, but there are literally hundreds of new entrants in the market

- some of them with lots of money sloshing around from successful

flotations, even if they are a long way from making a profit.



This tends to mean that there’s lots of work for a number of PR

companies.



Out of this year’s main table entries, 58 claim an income from IT of

pounds 400,000 or more. The comparable figure last year was 46.



And the involvement with technology goes all the way down the list. Our

table of IT specialists inevitably has to have a cut-off point

somewhere.



However, it is only fair to point out that even among the smallest

entrants, companies such as Catalyst Communications, Fox Parrack Fox,

Midnight Communications and Buffalo derive 80%-100% of their income from

IT clients. They have every right to be counted as specialists, too.



With so many agencies in the marketplace, it is not surprising that a

number of different strategies and niche positionings have evolved.



A key division is between agencies which believe the right strategy is

to concentrate 100% on the IT sector, and those which see positive

benefits in being involved in other areas.



There isn’t a correct solution here; diversity is one of the features of

marketing services, and clients will settle for the approach that suits

their individual needs.



Agencies which have successfully followed the 100% route (near enough),

include Text 100 and its offshoot, Bite, Brodeur A Plus, Firefly, Kaizo,

Lewis, AD Communications and Noiseworks.



On the other hand, Harvard director Gareth Zundel makes the case for

retaining a strong base in technology, but with knowledge of other

markets.



Although 64% of its income is IT-related, the company is also a

significant player in healthcare and leisure.



’Whether it is mobile phones, video recorders or PCs, technology that

began as business-to-business has steadily developed for use in the

home,’ he points out. ’In the business market, technology is primarily a

productivity tool, but in the home it is much more for leisure or

entertainment, competing for attention against TV or the cinema.



’Clients who started off selling to business have then had to service

consumers, where success goes to strong brands, and not necessarily to

the best technology. In fact, the way businesses currently buy

technology is also changing. With many products having similar

specifications, there is a gradual switch to non-experts making the

purchasing decisions, and strong branding again becomes more

important.’



Grant Butler Coomber has launched both a consumer division, which is

active in cause-related marketing, and a consumer technology

division.



Marketing consumer-focused technology to consumers has its own

disciplines, argues founding partner Jill Coomber. Pure IT agencies will

place too much emphasis on the technology, but the reverse is true of

consumer specialists.



Several agencies echo Zundel’s point about the growing importance of

branding, and marketing skills in general. For example, Jean Gomes,

managing director of dPa, says that clients want more strategically-led

support for brand development and competitive positioning. ’This takes

experienced people who can handle more than a discussion about the

virtues of one magazine over another.’



Wake-up call



Kaizo chief executive Crispin Manners says that technology companies,

having woken up to the power of the brand, are seeking consultancy

advice spanning marketing and sales. ’Just distributing news is a dead

duck for PR companies,’ he says.’Energising the sales process is where

it’s at today.’



Brodeur A Plus managing director Stan Woods observes that PR is

increasingly used to support organisations’ branding and, frequently,

rebranding efforts.



And Nick Band, chief executive of Band & Brown, says he seeks to

differentiate his agency from its competitors by positioning it as a

brand builder rather than as an information provider. The IT industry,

he adds, is belatedly waking up to the fact that a strong brand will

outlive any new technology.



Among other issues in the sector is the fact that IT companies and their

agencies are inevitably among the first to use new technology. Buffalo

managing director Kerry Hallard has concluded that the technology can

now get in the way of good press relations, which remains a core

activity.



’The advent of e-mail has led to a drop in personal contact between PR

people and journalists,’ she says.’And the development of services such

as The Source, which e-mails feature synopses to PR subscribers, means

that, although the service is good, everyone is responding reactively to

the same brief.’ Buffalo believes it’s time to get back to basics.



Finally, is there room for a prophet of doom? Chris Lewis, founder and

chairman of the agency Lewis, expects to see much more consolidation in

the sector, but also the fragmentation and death of agencies.



As the IT PR business becomes more international - and this is a

development most agree on - agencies which can’t provide adequate

cross-border services will be left in the cold, he argues. Moreover,

growth will inevitably taper off, and this will create problems for the

poorer players: ’Periods of growth are notorious for masking

mediocrity.



’As technologies converge and the pace of development slows, competition

for press coverage will intensify,’ says Lewis. ’Agencies with little

knowledge of journalism and poor technical expertise will be exposed.

Weak stories will fail, and so will weak agencies.’





INFORMATION TECHNOLOGY, TOP 50

Rank   Agency                                Total income        IT 1998

                                            1998 (pounds)       (pounds)

1      Text 100                                 7,729,000      7,729,000

2      Shandwick International                 25,843,000      5,944,000

3      Brodeur A Plus                           4,314,000      4,228,000

4      Firefly Communications                   4,232,000      4,020,000

5      Hill & Knowlton (UK)                    23,295,000      3,494,000

6      Weber PR Worldwide                      10,786,000      3,344,000

7      Edelman PR Worldwide                     8,934,000      2,859,000

8      Harvard Public Relations                 4,373,000      2,799,000

9      Kaizo                                    2,990,000      2,601,000

10     Citigate Dewe Rogerson                  26,533,000      1,857,000

11     Lewis                                    1,789,000      1,789,000

12     Grant Butler Coomber                     1,987,000      1,689,000

13     AD Communications                        1,681,000      1,681,000

14     Noiseworks                               1,577,000      1,577,000

15     Charles Barker/ BSMG Worldwide           9,627,000      1,540,000

16     Ketchum (including Life)                 9,608,000      1,537,000

17     Bite Communications                      1,481,000      1,481,000

18     Ogilvy PR Worldwide                      2,267,000      1,474,000

19     Berkeley PR International                1,391,000      1,391,000

20     Insight Marketing & Communications       1,510,000      1,359,000

21     Strategic Alliance International         1,355,000      1,355,000

22     Keene Communications                     1,611,000      1,321,000

23     Profile Public Relations                 1,435,000      1,292,000

24     dPa Corporate Communications             1,259,000      1,259,000

25     College Hill                             5,656,000      1,131,000

26     Grayling Group                           8,091,000      1,125,000

27     EML                                        970,000        970,000

28     Fleishman-Hillard UK                     2,212,000        929,000

29     Portfolio Communications                 1,236,000        915,000

30     Companycare Communications               1,465,000        879,000

31     Oast Communications                        865,000        865,000

32     The Red Consultancy                      3,271,000        850,000

33     CAS PR                                   2,324,000        813,000

34     Fodor Wyllie                               794,000        794,000

35     BourneRiver Public Relations               770,000        770,000

36=    Band & Brown Communications              2,181,000        763,000

36=    Le Fevre Communications                  1,272,000        763,000

38     GCI/APCO (including Focus

       Communications)                          7,422,000        742,000

39     Herald Communications                    1,223,000        734,000

40     Insight Marketing Concepts                 725,000        725,000

41     QBO - The Quentin Bell Organisation      3,492,000        663,000

42     Johnson King                               660,000        660,000

43=    MacLaurin Group                          3,129,000        657,000

43=    Roger Staton Associates                    939,000        657,000

45     The Whiteoaks Consultancy                  689,000        620,000

46     Words Etc                                  662,000        596,000

47     Key Communications                       4,919,000        590,000

48     Stewart-Muir Communications                592,000        580,000

49     Nelson Bostock Communications            1,072,000        536,000

50     Cohn & Wolfe                             5,399,000        486,000



THE INTERNET CHANGES PR FOR EVERYONE



Client companies are just starting to appreciate the real PR importance

of the internet. The idea that a web site is a convenient way to

disseminate information, or that news now crosses geographical frontiers

quicker than you can blink, are old hat.



Now there are scarier implications - such as the fact that corporate

reputations can be savaged as disgruntled customers and shareholders

swap comments on the World Wide Web. It can all happen without the

companies’ knowledge, if they are not monitoring, and contributing to,

the forums and chat rooms. And it can end up as a damaging mix of rumour

and untruths.



PR agencies that have the technical expertise are setting up monitoring

services. MacLaurin has launched a new division, POWonline, to manage

client messages and reputations on the internet. Edelman has a system

called I-Wire which monitors the internet, checking on 33,000 user

groups and bulletin boards. ’It means that if there’s ’trouble up at t’

mill’, the team can take action,’ says chief executive Tari Hibbitt.



’The internet is an explosive development in ways we hadn’t quite

expected,’ she adds.’It’s not a conventional medium. It doesn’t have

deadlines in the normal sense, because deadlines happen second by

second.’



And when a company faces a crisis, there’s never been a more powerful or

potentially more destructive tool than the internet, according to Text

100 managing director Katie Kemp: ’Once it gets on the net, you lose

control of it.’



Hibbitt adds that Edelman regularly prepares web pages for its clients

in anticipation of crises. These are then ’hidden’ on the web site,

ready to be activated if needed.



For both positive and defensive reasons, clients who would normally look

to generalist agencies are beginning to offer a slice of their work to

PR agencies with IT/internet expertise. Tesco, for example, has put some

work with Text 100, while Harper Collins awarded the account for its new

online book club, Fire and Water, to Fodor Wyllie. Stan Woods, at

Brodeur A Plus, reports a growing interest from banks, insurance

companies and retailers.



’Organisations need an IT strategy,’ he says. ’Communicating the impact

and benefits of that strategy is often a different job to bringing the

companies’ core business messages to the market.’



Also springing up are agencies specialising specifically in the internet

and new media, such as Midnight Communications and Fodor Wyllie.

Brighton-based Midnight started with a pounds 2000 overdraft four years

ago. It now employs 10 and enjoys a pounds 325,000 turnover. Midnight

claims to have developed the concept of E-mail Emily, the world’s first

online agony aunt, to help the launch of its first ever client, UK

Online. It lost the account 18 months later when UK Online was taken

over by EasyNet, but has just regained it.



’Speaking as a female anorak, I wouldn’t swap the roller-coaster ride of

the past four years for anything,’ says managing director Caraline

Brown.



Fodor Wyllie is a year older, and was born because one of the founding

directors, Grace Fodor saw ’an enormous gap in the market’. Computer

games manufacturers were frequently reviewing their agencies, she says.

They appeared to have difficulty finding PR teams who could ’dress a

technical product in consumer clothing’.



It is a niche that has served the company well, she says. But as others

have started to invade its turf, and ’consumer technology’ has become a

buzzword, Fodor Wyllie has refocused on ’consumer new media’ - the

internet, of course, DVD, interactive entertainment, and digital TV.

SkyDigital is a client.



After running several internet campaigns, the agency has set up a

specific online PR division. Like Edelman’s Hibbitt, Fodor argues that

the new medium has many distinctive features. For instance, the leading

online newspapers, such as the Evening Standard’s This Is London require

specially prepared press releases, and are starting to use video

clips.



Looking after a client on the web is a mix of ensuring its presence is

widely listed and known, and monitoring what’s being said about it.



’Press relations is the heart of traditional PR,’ says Fodor, ’but on

the internet you are truly communicating directly with the public.

People all over the world are communicating in real time. That makes it

both very dangerous and very exciting.’



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