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
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 Big-mouths.com, 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.’
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 Beenz.com.
Since then, it has worked with Ihavemoved.com, easyshop.com and qxl.com,
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
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 Froglet.com, 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.
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
Adrian Brady, joint-managing director at Eulogy, whose clients have
included News International’s Currantbun.com and FiredUp.com, 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
Lisa Hulme, joint managing director of dotcom specialist agency
Big-mouths.com, 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
’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
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.
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.
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 Lastminute.com, 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.
Boo.com’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
’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.
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 in60.com
and agricultural trading and information platform Globalfarmers.com,
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.
UPS AND DOWNS OF DOTCOM COVERAGE
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,’
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
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.
THE TEN DOTCOMMANDMENTS
- 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.
PR IN THE DIGITAL AGE
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
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.