| Many companies are now paying the price for | | | | maneuver? |
| following bad counsel during the 1999-2000 tech gold | | | | In adapting to market changes, smaller clients are again |
| rush. While entrepreneurs and VCs vaguely | | | | desirable as alternative marcom providers find ways |
| understood that a strong marketing communications | | | | to profitably service them and produce a desirable |
| (marcom) and PR campaign is needed to create | | | | return in the capital invested in marcom. Embracing the |
| awareness, build brands, and drive sales, too many | | | | free agent economy, senior marcom practitioners living |
| were ignorant when it came to deciding how to select | | | | in the suburbs (better schools and affordable housing) |
| the right agency to help maximize the return in | | | | are starting to "just say no" to adding two hours of |
| investment. | | | | daily commute time -- departing downtown agencies |
| Using a rationale that paralleled the old adage, "nobody | | | | (or being let go in favor of cheaper, junior staff) to |
| ever got fired for picking IBM," companies were often | | | | work for their own clients and smaller agencies closer |
| advised by VCs and investors to retain a large, "brand | | | | to home. This is creating more affordable, |
| name" PR agency with a posh downtown address. | | | | project-based PR/marcom options for many tech |
| These agencies often came with a premium price and | | | | companies with refined, controlled budgets. |
| inexperienced junior staffs. There was no emphasis on | | | | For many clients, outsourced and project-based |
| value. Of course many of these larger agencies were | | | | marketing communications has an economic rationale |
| often "friends" of the VCs, with referrals and finders | | | | that works even in a strong economy, leading VCs to |
| fees - often a conflict of interest -- being the rule | | | | rethink their original big agency bias. It makes sense to |
| rather than the exception. | | | | find a marcom outsource that will work on a project |
| Despite the current recession economy, massive | | | | basis, or adapt to a flexible, needs-based budget that |
| layoffs, and dismal earnings announcements, many | | | | allows clients to pay for resources and counsel on an |
| tech companies are remaining in business, doing their | | | | "as-used" basis. It allows companies to do more |
| best within a labor market where top producers are | | | | short-term activities without a large commitment. If a |
| still in demand. Because they have been reluctant to | | | | project proves successful, they certainly can lead to |
| cut highly sought technical personnel, their public | | | | longer-term relationships. Projects are a great "test |
| relations and marketing departments are often the first | | | | drive" for both the agency and the client - a way to |
| to be downsized or last to be built up, often to the | | | | see if they enjoy working together. |
| point of counter-productivity. | | | | Advice for companies looking to outsource marketing |
| Some companies cutting back or just starting to build | | | | communications: |
| their marcom efforts have begun looking outside their | | | | * Location, location, location - NOT! A prestigious |
| organizations and "outside the box" for value from PR | | | | address does not make an agency do better work or |
| and other marcom services. They are learning that | | | | increase the chances of media coverage. Are you |
| they can get more for less, particularly in tough times. | | | | paying for the view from your agency's conference |
| It's a new concept to VCs. | | | | room instead of results? |
| As funding has dried up, companies have cut their PR | | | | * Agencies love to drop names of contacts, but these |
| and marketing communications budgets. These | | | | may not be the right reporters, editors, and analysts for |
| companies -- along with the VCs and investors -- are | | | | your company. Experienced pros develop new |
| becoming better-educated buyers of marcom | | | | relationships as needed. |
| services. The same marcom/PR agencies that once | | | | * Look at their clip book, but don't be too impressed, |
| commanded a monthly retainer of $30,000 are | | | | especially by clips for big name clients. See what |
| suddenly offering the same services for much less. | | | | they've accomplished for clients that are about your |
| They've also been downsizing, and staff turnover may | | | | size and budget. The people showing you past results |
| lead to new, inexperienced members of the account | | | | should be the same people who will do the actual |
| team. While the investors and tech companies are still | | | | work on your account. |
| scratching their heads trying to figure out what all the | | | | * Your needs and budget may vary from month to |
| extra costs were for, they're finding that traditional | | | | month. Your agency should be able to work with a |
| tech PR agencies still insist upon selling more services | | | | flexible budget. Many agencies now require |
| than necessary, and require retainers in excess of | | | | prepayment of fees. All time spent ramping up for a |
| $15,000 per month. This is frequently beyond what a | | | | project is considered billable time. |
| pared-down budget can afford, especially when a | | | | * Make sure that your agency has a conceptual |
| company is simply looking to maintain visibility or beef | | | | understanding of your company, the technology, and |
| up its own efforts. | | | | your marketplace. Have them visit your Web site on |
| Whether downsizing or ramping up responsibly, | | | | their own time before the first meeting. |
| economically-astute investors and companies are | | | | * You can find a marcom alternatives through |
| discovering the option of outsourcing marketing | | | | networking, referrals, online searches (use key words |
| communications and PR to providers who can pick up | | | | such as PR, tech PR, outsourced PR, marcom, etc.), or |
| the slack and provide services on a smaller, flexible | | | | look at press releases from similar-sized tech |
| scale, often on a project-basis. Smaller ("boutique") | | | | companies in industries related to yours. Agencies that |
| agencies, virtual PR teams, and individual practitioners | | | | advertise or attend trade association meetings will |
| are a growing alternative for companies of all sizes, | | | | recoup those costs in their fees. |
| particularly those with monthly marcom budgets well | | | | * Pay attention to the "structure" of the first meeting. |
| under $10,000. Like their clients, these alternatives have | | | | Does the agency listen to you, or are they in "sell" |
| to work smarter, faster, and cheaper in a slowing | | | | mode? If they don't listen, can they really understand |
| economy. | | | | and meet your needs? |
| Working on a project basis usually goes against the | | | | * Outsourced providers are a limited resource, often |
| grain of the business models of larger agencies. | | | | working simultaneously for several clients. Make sure |
| Downtown offices with skyline views, employee | | | | they have the bandwidth to take on additional work for |
| salaries, benefits, and equipment are all overhead costs | | | | your account and can meet your deadlines. |
| that must be passed along to the client. Large | | | | * Chemistry counts - you'll have regular contact with |
| agencies need steady retainers to make sure financial | | | | your agency. Nobody will ever provide a bad |
| goals and obligations are met. They may offer | | | | reference, so trust your gut instinct. Marketing |
| prestigious addresses and a recognizable CEO, but | | | | communications is an investment. Selecting a source |
| who is the day to day contact performing the actual | | | | that matches your company's culture/personality is |
| account work? Is retaining the services of a large | | | | likely to give you the best return. |
| agency really a prudent investment or just a "C.Y.A." | | | | |