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1455A Seller's Market for PR?

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  • Jim Rink
    Nov 3, 2000
      (From PRForum):




      (box) Often, monthly fees of $20,000 to $40,000, depending on the level of

      (box) An ability to explain what they do, and how it's different from what
      others do

      (box) Realistic expectations about how much press a developing company will

      (box) A promising business plan and the potential to be a leader in their


      (box) Ink! Publicity in top business and trade publications

      (box) An understanding of the company, the industry it's in, and what makes
      it different from its competitors

      (box) Enthusiasm, responsiveness and good writing skills

      (box) A sense that the firm has a short- and long-term PR plan for the

      AFTER money, the thing newly minted companies want most for their companies
      is publicity -- the more the better.

      ''People want press, they want ink,'' said Judie Hayes, vice president of
      corporate communications at Critical Path Inc., an Internet messaging
      infrastructure company. ''You need to build your customer base, influence
      your community, shareholders, investors -- and instill the ability to
      partner'' with other companies. ''PR is one of the best ways to do all of
      those things,'' she said.

      But these days, securing top-quality help from public-relations firms is
      proving as difficult as finding a strong venture backer, lawyer or
      headhunter. Companies shopping for PR report that monthly fees for even
      mid-tier firms have soared in many cases to well over $20,000. Rather than
      the PR firm pitching its services, companies have to pitch themselves,
      explaining why they will be a promising client. Some companies, especially
      those who haven't had a high-profile venture-capital infusion, can't even
      get PR firms to return their calls.

      ''We hired a Web-design house, a creative-design team and engaged some
      consulting people. PR was much harder,'' said Thomas Byrne, vice president
      of product marketing at InfoCanvas Software, which recently hired a firm
      after a lengthy search. ''Each one of them wanted to find a market leader''
      for a client, he said.

      Firms have been trying to keep up with the demand. According to the Council
      of Public Relations Firms, PR houses added more than 1,000 new employees in
      1999, increasing revenues by 30.5 percent for the year, with
      technology-oriented firms doing even better, at 47 percent revenue growth.
      But it doesn't seem to have eased the tight market for top PR help.

      ''Companies like us have to search hard, wide and deep,'' said Steve Oakley,
      the chief executive of CommerceScout. He said he only recently found a firm
      he considers promising after essentially giving up hope a year ago, at the
      height of the dot-com craze. In many cases, he said, ''I was not impressed''
      with the level of technological know-how or dedication offered.

      Even those who score a coveted spot at a top firm may find that the heavy
      hitters brought in to pitch their account aren't the ones who handle the
      business. Because many such firms have added staff to keep up with the huge
      demand, new clients sometimes get assigned a rep who is dismayingly green,
      with either poor writing skills or little knowledge of a company's industry.

      Binay Cahn said when she headed internal PR for now-defunct Petstore.com,
      she grew dismayed with the PR firm the company was using, which she wouldn't
      name. She cited certain poorly written press releases, missed deadlines and
      calls to executives at the firm that went unreturned. She later switched to
      marchFIRST Inc., and said she was much happier with the level of attention.

      Jon Higgins, a partner at Ketchum, which is identified in past press
      releases as the firm that formerly represented Petstore.com, disputes Cahn's
      summary of their representation, saying ''that's not how we do business.''
      He added that Ketchum has won many PR-industry awards and even got a
      published ''thank you'' from client Visa U.S.A. in a PR trade publication.

      For their part, PR firms and account representatives report feeling
      besieged. ''I've had people cry, yell, and send me two dozen roses to get a
      meeting,'' said Holly McArthur, executive vice president for Northern
      California at Magnet Communications. ''We turn away dozens of companies
      every week'' because ''we can't possibly add staff or find staff to service
      them.'' Likewise, Alexander Ogilvy PR, one of the largest firms, had 1,600
      unsolicited incoming new-business inquiries, and signed only 15 new clients
      in 1999, according to Holland Carney, president for the U.S. Western Region.

      For emerging companies, PR firms are a link to getting all-important press
      coverage in industry, business or general magazines, or in any of the
      proliferating online sites. ''It's the third-party endorsement; it's
      somebody else'' validating your product or service, explained Hayes of
      Critical Path.

      Companies expect, sometimes unrealistically, that their PR firm will get so
      excited about their product or service that they will hound reporters to
      cover them as an important trend. ''It's often hard to get them to
      understand that, while we realize it's important to them, it's not the same
      value to the market at large,'' said McArthur.

      Cahn, who is now a consultant to companies on media and PR, said she
      sometimes has to explain the harsh realities. ''Can I force a reporter to
      cover the story? Absolutely not.''

      Industry experts say the problem of unrelenting demand is being exacerbated
      by a limited pool of PR talent. ''I'm not saying we haven't had quality
      problems. Our CEOs are very concerned about that,'' said Jack Bergen,
      president of New York-based Council of Public Relations Firms. The council
      is recruiting for new PR hires among lawyers, writers and other non-PR

      But such explanations don't satisfy the companies, many of whom devoutly
      believe their company can make headlines, and can't see why PR firms aren't
      getting them there. Said Jim Zemlin, vice at Covalent Technologies Inc.,
      ''You want a PR agency to be thinking about you in the shower.''


      Jim Rink
      AAA Michigan
      1 Auto Club Drive, Dearborn, Mich. 48072
      voice 313.336.1513 fax 313.336.0986