PUBLIC RELATIONS: Getting dotcoms’ message across - Internet firms are fuelling a boom for both general and specialist PR agencies

The dotcom revolution may have spawned a generation of spotty-faced millionaires, but these young entrepreneurs aren’t the only ones to have benefited from it. In fact, while new media companies are just as likely to go belly-up as float successfully, the lawyers, bankers and marketers who advise them are also benefiting from dotcom explosion.

The dotcom revolution may have spawned a generation of spotty-faced

millionaires, but these young entrepreneurs aren’t the only ones to have

benefited from it. In fact, while new media companies are just as likely

to go belly-up as float successfully, the lawyers, bankers and marketers

who advise them are also benefiting from dotcom explosion.

PR agencies in particular have seen business boom. Even those that don’t

specialise in technology clients are reporting three or four new

business calls a day from internet start-ups looking for help with a


When they are ready to market themselves, dotcom companies often turn to

PR first. It is a lot cheaper than advertising and some say it is better

equipped to communicate the complex messages needed to coax consumers

into cyberspace.

Dotcom businesses are so abundant that there is now a clutch of

specialist new media PR agencies.

Midnight Communications and Montgomery-Baird, which focus on

business-to-business PR, both launched five years ago. In Scotland, The

Value Innovators launched as a new media PR business in February 1999.

In October 1999, Lisa Hulme left Virgin, where she was head of new media

and internet PR across the group, to set up, and in

February this year two Brunswick consultants set up Mantra.

’It is the first marketing discipline any of them think about,’ says

Mantra co-founder Lawrence Dore. ’When dotcoms start fundraising,

venture capitalists ask to see their press cuttings, because it is an

indication of potential press coverage.’

Internet spread

But those managing internet start-ups have not turned exclusively to PR

agencies specialising in dotcom clients. Almost all PR agencies have at

least one dotcom on their books.

For some, such as consumer and corporate consultancy Band & Brown,

companies riding the internet boom account for half of all income.

Twelve months ago, Band & Brown had one dotcom client, the internet

currency company

Since then, it has worked with, and,

among others.

So which agencies should internet entrepreneurs be looking to help

launch and raise the profile of their company - the dotcom specialist or

the general agency?

August.One is a general agency, but it was created last year by a

transfer of staff and clients from established technology specialist

Text 100.

The logic was that IT has by now become so mainstream that it could be

represented in the same way as any other industry. Six months ago, the

agency started picking up dotcom clients and it now represents firms

such as Scoot, which has an online directory, Planet Recruit, a

recruitment web site, and, an online lettings agent.

Tariq Khwadja, August.One managing director, says that specialist

agencies can suffer from what he calls the ’blinker factor’.

’Probably the greatest advantage of hiring a PR consultancy is

objectivity: the ability to think like the end customer. Nowhere is this

more necessary than in the internet world, where the job is to demystify

e-commerce and coax non-technology literate customers to browse,

subscribe and shop online.

But specialising heavily in dotcoms carries the danger of getting too

close to the market and its terminology,’ says Khwadja.

Consumer understanding

Matt Peacock, corporate communications director at AOL in the UK, agrees

with Khwadja. He retains Joe Public Relations, a consumer PR agency and,

like August.One, a spin-off from Text 100.

Peacock says: ’My view is very much that the most useful PR support I

can have is people who understand the consumer mindset and apply the

same skills to the online consumer sector as they would to traditional

FMCG brands.’

Adrian Brady, joint-managing director at Eulogy, whose clients have

included News International’s and, the

auction site, says PR agencies shoot themselves in the foot by choosing

to specialise in different sectors.

’Have you ever heard of an ad agency that specialises in auto-motive?’

he asks. ’A dotcom specialist doesn’t mean anything, because they are

completely different businesses. The internet is just a route to


However, Mark Desvaux, founder and managing director of online estate

agent Houseweb, which retains Band & Brown, warns that not all general

agencies are up to the job. ’There are very few agencies that have

indepth experience of how to handle dotcoms,’ he says. ’Many are moving

into it because it is lucrative but they don’t have the experience. In

20 years it will be a natural part of our lives, but we’re not there


Business knowledge

Lisa Hulme, joint managing director of dotcom specialist agency, which represents Virgin Radio and Virgin Mobile’s online

divisions, as well as Ginger Online, says having a feel for the dotcom

industry is indispensable when selling your client’s story.

’It’s understanding why their great new piece of technology is going to

change usage of the internet or excite people and unless you know the

business you can’t do that.’

Her role is not only to publicise clients in the media, but to put them

in touch with technology analysts at investors such as Jupiter,

Durlacher and Forrester, which all produce reports that influence other


To speak to them, she says it is better to hire a specialist.

One of the big problems for agencies wanting to represent new media

clients is finding staff with the experience to do it. Hulme says it can

take five or six months to recruit the right person and she argues that

anyone with a passion for new technology will join a specialist agency

like hers.

’We all play computer games, we’ve all got Palm Pilots, we use them to

check our mothers’ birthdays, we use them at weekends; we’ve all got

friends in other internet companies, we all go to net nights.’

Yet new media agencies are often small whereas larger agencies argue

that they can act quickly when they need to, because staff can be

co-opted from less busy clients. And, with dotcoms, speed is of the

utmost importance.

As soon as the initial funding is in place, companies need to get their

product to the market before a rival does. Eulogy’s Brady says it is not

uncommon for a potential client to call up on a Monday wanting to

appoint an agency by the Friday.

But with clients in traditional industries, the gap between initial

phone call and appointment usually spans a month or two.

Mantra’s Dore says larger agencies often don’t invest seriously in their

dotcom clients, because the fees they pay are not big enough.

Specialist range

For an agency like Brunswick, the UK’s most established financial PR

business, the pounds 5000-pounds 12,000 a month fees dotcoms can afford

to pay are paltry compared with the millions that can be earned handling

a successful real-world company.

Although most general agencies offer a range of PR disciplines, such as

financial communications, consumer or business-to-business PR, most are

particularly strong in one or two areas. Dore believes that dotcom

managers do not want to deal with a roster of two or three agencies,

each with their particular specialism.

Despite this being considered best practice in FTSE companies, Dore says

dotcom executives don’t have the time to co-ordinate a roster,

preferring to deal solely with one agency that specialises in PR for


Midnight and Band & Brown claim 60% of their dotcom clients not only

retain them as their sole PR adviser, but their sole marketing


There is little doubt that the PR needs of dotcoms are different to

those of traditional companies. As Peacock at AOL warns, the reputation

of an online company counts for more than that of a traditional one.

’On the internet we have brands that are virtual, we have no tangible

associations whatsoever. What the consumer reads in offline media is the

sole brand equity that you will ever have in an internet company.’

Dore says the difference can be explained by the accelerated life-cycles

of these new businesses. While traditional companies can take years to

mature, and partnership deals or flotation are not things they need to

consider from launch, dotcoms can mature in nine months to two


Shandwick International, a general agency and one of the largest in the

UK, has identified three key stages in the life of a dotcom, each

requiring an array of PR services.

In Shandwick’s scenario, the ’emerging’ dotcom has just received

first-round funding and is beginning to trade. At this stage Shandwick

offers analyst relations, investor relations, help with the launch,

defining the brand, and with public affairs where necessary.

The ’established’ dotcom is pre-IPO and needs to establish itself as a

brand. It will need ongoing financial media and investor relations, and

PR aimed at other businesses, the trade, lifestyle and consumer

technology press. It may want to consider tar-geting the online

community, par-ticularly venture capitalists, by communicating over the


The ’branded’ dotcom is post-IPO and its needs are the same as any other

listed company. It should use the full gamut of PR services,

particularly strategic marketing advice and help with raising the

profile of its executives.

Unreal expectations

Dore agrees, saying that before a PR agency and dotcom start working

together, the most important thing is to sit down and draw up a route

map for the coming year or so, and set targets for what the agency will

be expected to achieve.

The setting of performance targets is particularly important because the

management teams in these new companies, bursting with energy and

enthusiasm about their product, can have unrealistic expectations of

what PR is able to achieve. Not every new company will have the profile

of, or even want it.

At launch stage, Dore advises taking things slowly. He prefers to go for

a ’soft’ launch, where the site is tested with a select group of end

users and journalists before going live to the rest of the world.’s shaky start, where an ad campaign had to be postponed because

of problems accessing and using the site, is by now legendary.

Following launch, dotcoms that have attracted first-stage funding are

under pressure to attract and invest more money as quickly as


Desvaux at Houseweb says dotcom start-ups often rush into big marketing

campaigns before they are ready, because of what he calls the Brewster’s

Millions syndrome.

’Nine out of ten campaigns don’t work because dotcoms have to spend the

money so quickly, they don’t have time to plan it properly,’ says


He adds that many of them believe the best way to promote themselves is

to get your name out there, and use your marketing budget to make as big

a bang as possible.

Name changes

But rushing into an ad campaign means that there is not enough time to

properly research the brand. A number of companies have gone through the

fanfare of launching only to change their name and logo a few months


Online mortgage broker the Loan Hub, for example, decided after its

launch to change its name to Fred Finds.

Maurice Smith, co-founder of Scottish new media agency The Value

Innovators (TVI), whose clients include home delivery service

and agricultural trading and information platform,

says in the current shaky climate, dotcoms are better off spending their

money on fulfilment than on advertising.

’There is no doubt that you need a clever marketing campaign to drive

people to your site, but it’s not the be all and end all,’ says


Both dotcom specialists and general agencies have good and bad points to

offer dotcoms. So what kind can best serve internet start-ups is a

question for individual dotcoms.

But perhaps the answer for PR agencies is that they should approach

potential dotcom clients in the same way that they approach any other

new business, by thoroughly researching the vertical market in which the

company operates and the channels to market that it relies upon.


The Net Imperative, an online news and information service for the

internet community, has worked with new media specialist Midnight

Communications since mid-December 1999.

Midnight saw the company through its launch in February and, just as

vitally, through its liquidation and subsequent rescue at the end of


Davina Lines, commercial director at The Net Imperative, says she opted

for Midnight’s specialist knowledge after asking them to pitch against a

mix of agencies with no particular focus on the dotcom area.

’With the type of service we were launching, aimed at the internet

industry itself, we needed an agency that understood how to reach them,’

explains Lines.

The company’s founders already knew their audience well. Before setting

up her own business, Lines oversaw the launch of internet industry

magazine New Media Age, as commercial director.

’We had a lot of in-house knowledge of the trade press but Midnight had

time to ensure that everyone had all the information they required at

the time they needed it,’ says Lines. ’It took a lot of pressure away

from us.’

Midnight ensured a regular flow of information to the trade press about

new deals and new recruits, such as the chairman and the management


And when The Independent ran the first story on The Net Imperative’s

funding problems on its front page on 20 May, it was to Midnight founder

and managing director Caraline Brown that Lines turned to for


From 11am on the Saturday, when Brown rang to tell them that the bad

news had leaked out, Net Imperative staff were instructed to refer all

press calls to Midnight. This gave the management team time to consider

what they would say to journalists once they were ready to speak to


Brown went on call round the clock. She advised on how to tell the press

as much as possible without compromising the company’s legal position or

its management. The Net Imperative covered its own liquidation and the

subsequent rescue package, agreed on 26 May, on its own web site, and

believes that its decision to be open with the press turned a negative

situation into a positive one.

The Financial Times even praised the ’gallows humour’ with which the

company’s staff reported its problems.

Lines says that having Brown on call to bounce ideas off and handle the

initial avalanche of calls allowed the management team to distance

itself from the situation and avoid a knee-jerk reaction.



- Ensure the site is ready at official launch. A ’soft’ launch to a

small select audience is preferable while you iron out any faults.

- Make as much noise about the fact that you have lots of money in the

bank as possible.

- Focus on the stories which affect everyday people’s lives, not the


- Designate and train one member of your management team to talk about

the technology and one to talk about the core business.

- Build your brand. Don’t focus on column inches alone, make sure you

are using the media to reach the right people with the right



- Ask more than three or four PR agencies to pitch for your account.

Pick a handful based on recommendations.

- Market the business as a dotcom. The internet is just a route to

market, it is not the be all and end all of the company, and dotcom

fatigue is rife.

- Over-promise. If you over-hype the site or service it will loose


- Invite the media to your launch and expect them to turn up. Work hard

on the story because there are plenty of other new companies making

demands on their time.

- Rush into a big publicity campaign only to change your name and logo a

few months later.


Peter Hamilton Group managing director,The Communication Group When I

started in PR, the world was a lot simpler. The speed of events was

leisurely, decision-making almost ponderous and PR was a relatively

placid world in which few understood the concept of stress.

It’s a stark contrast with today. We practise PR in an environment that

changes both rapidly and unpredictably. But have PR professionals

adapted sufficiently to these pressures? In truth, not yet. We need to

consider the new factors shaping business - and its relationships with

the public - in an age of almost limitless communication.

Stakeholders used to take what they were given, but digital

communication is giving them new power. These people are at ease with

new technology.

They’re educated, articulate, financially sophisticated and socially


As consumers, they are an attractive market. Through digital media you

can reach them one to one and they will dictate the design and purpose

of the products you produce.

The internet is their forum for trade, debate, cultural and political

discourse, and for driving change.

Reputations that take years to build can crumble in days on the net.

The linkage between corporate and product reputation is getting


While digital technology presents huge opportunities to target

consumers, there’s a big potential downside. Poor products and services

can find their way into public debate on the internet and eventually

into wider view via the media.

This instantaneous ripple effect can cause huge damage to your

reputation - not least because it can gather momentum before you’re

aware of it.

In PR today, promotion and selling are the easy bits. Managing mistakes,

disappointment or disaster is how you really earn your corn. What makes

the 21st century different is the sheer scale and speed of


For PR, it will not be enough to recognise the issues of speed, free

access, global scope, consumer power, privacy and confidentiality. We’ve

already begun to establish virtual press offices, workshops, debating

forums, web conferences, online presentations and systematic


We know that a considerable amount of misinformation finds its way onto

the net. Arguably, the best way to counter false stories is by sheer

weight of facts.

We need to communicate speedily, simply, sympathetically and


Trumpet our triumphs but also own up to failures and be seen to put them


In the digital age, PR practitioners must take responsibility for what

their name implies: relationships with the public. We need to understand

the public better, so that we can help the public understand business


If we succeed, we’ll find the whole world is listening.


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