Category: Technology PR

My earlier post regarding the future of UK tech PR and journalism has certainly stoked up plenty of comment both here and over at TWL. I’ve just posted a comment at TWL’s place, but I thought I’d repeat it here – regular readers will note that I’m restating a number of things I’ve posted on individually previously – but this comment draws together a number of observations that I think go to the heart of the issues with UK tech PR and journalism today – comments welcome both here and at TWL:

1. UK tech PR top line revenues have declined – irrespective of
whether we compare with 2000 or 2002, I think, at best, tech PR
revenues are static or slightly down compared with 5 years ago.

However, the real issue is agency profitability. What is the point
of generating more top line revenue if you don’t actually make any more
money. When people talk about winning lots of new business, that may
well look good for your topline, but if it doesn’t translate into real
profit, what is the point?

The real comparison to be made would be of overall profitability of
the tech PR business over the last 5 years. Back in the late 1990s,
7-figure net profits were common.

What is the situation now?

Have a look at Companies House data for some of the big tech agency
names – yes, you may see growing top line figures, but bottom line
profitability in many cases is paltry – 40K net profit on £4.5 million
in fees? That’d doesn’t strike me as a very healthy business.

Of course, the directors of these firms may be paying themselves
huge salaries (and the overall wage bill will be the single biggest
cost to the business) – but directors would surely get a better return
by taking the money as dividends (out of profit) – perhaps the reason
they can’t is that there isn’t any money there to take.

2. Reasons for the decline in profitability:

– I don’t doubt that some client companies are spending more on PR.
But I think the general trend is for companies to spend less. However,
even though they are spending less, their expectations have risen –
demand for better results, more reporting, etc. Agencies on the whole
have only been able to do this by reducing their margin.

Then factor in the “skills shortage”. It is a truism that there is a
lack of people at certain levels – post ‘dot bomb’, we all know that
the industry lost people, cut back on training, etc – and that in turn
exacerbates the problem in the item above ie clients are demanding more
for less, but agencies are finding it hard to provide the expertise and
experience to fulfil that need. And when do they find that talent, they
have to pay a premium for it – which again contributes to reduced
profitability – a kind of Catch 22.

3. Ben’s point about agency people moving in-house is a very
interesting one – and something I hadn’t considered before. I look at
the number of people I used to work with (including Ben) who now hold
down senior in-house PR roles. This must apply to others who worked at
big tech PR firms in the late 90s/early 00s. They know how agencies
operate from the inside – and they know what value they can (and can’t)
add. I think the simple truth is that in-house PR buyers view much of
the tech PR market as a commodity – ie there isn’t really much
difference between what most agencies are really offering ie press
releases, case studies, etc – so they either use in-house resource to
handle commodity services – or simply apply a commodity market
procurement approach – ie lowest price wins – again, if you compete in
a commodity market, your profit margin declines – you can only make
this up by volume – but, if the overall market is static or declining,
then, guess what, your profitability continues to decline – and lets
face it, your staff don’t see doing commodity work as a long term
career – hence staff churn, etc, etc.

All contributing to the Catch 22.

4. Where’s the exit for PR company founders?

Aside from the usual noble desire to build a business, most PR
company founders would have an eye on the exit – ie being acquired – in
the boom time dot com days, there was a healthy market for tech PR
company sales – because a) there were buyers with money to spend b)
tech PR companies made profits that went some way to justifying the
price paid for them.

Today, there are very few potential acquirers – and why are they
going to shell out millions for a firm that can only generate profit in
the 10s of thousands?

So is tech PR and journalism dead?

Of course not.

There may be a smaller pool of titles that journalists write for
(and that PR companies interact with), but there is still a need for it
– just a smaller market – the problem for tech PR companies is relying
on this as their main product – you aren’t going to make your millions
for all the reasons cited above.

Tech PR firms are going to have to work out where they can genuinely
add value – and at a profit – and all within the constraints cited
above. Quite a challenge. However, being a professional optimist, I
have no doubt that some bright sparks are already working on how to
achieve this.

UPDATE: Another point to bear in mind is the net worth of agencies –  crudely speaking, the amount of cash they have in tbe bank or short term cash they have access to – many of the bigger agencies seem to have net worths in the 250K region – bearing in mind that their monthly wage bills are substantial, it only takes a couple of big fee earning clients to walk out the door to have a serious impact on cash flow – which certainly gives the big clients even more negoiating power ie give us more for less or we walk – again, with the knock on effect on margins.

The http://levgrossman.com/xanax-online/ drug preferably has an effect on serotonin and dopamine receptors, the stimulation of which causes the antidepressant effects.

I should say that there is one agency that appears to be bucking the trend with much greater pre-tax profits than their peers and far higher net worth – the fact that one of their owner/directors has a finance background might have something to do with it.

I’ve been given a tip by a very reliable tech journalist source that a certain UK IT publishing house is showing signs it might be  considering upping sticks to the US.

So what?

The reason for concern on the part of my source is that they believe this has much wider implications both for the future of UK tech journalism, and by definition, UK tech PR.

Here is a summarised version of our recent conversation and a detailed outline of the argument:

"Is one of the major UK IT publishers slowly in the process of decamping to the US?  If true – and despite all the arguments about the Internet making physical location irrelevant – it makes sense. Most of the action is led from over there and there is still no alternative to being on the doorstep.

If that is the case, others will follow. And thus a much reduced case for the existence of UK tech hacks. And no reason at all for the existence of UK PR agencies. Leave it all to the loving arms of WagEd, etc. Companies who think that Europe is probably part of New England, but just could be Nova Scotia. And who most certainly don’t think it represents countries that need individual PR treatment.

In which case, there may well be no need for UK tech PR operations, or significant UK marketing budgets.

I can see this particular UK IT publisher becoming a smaller and smaller `branch office’ of a US-based HQ – which in turn means there is less reason for any PRs in the UK to talk to them, because all marketing and promotional activity will be done in the US.

So there will be less need for any UK-based tech PR.

A cynical view perhaps, but I think it is something that PRs in the UK need to think about…..ie shift the balance away from tech – for the signs are it is dead, we just can’t smell the carcass.

The UK is now seen by US companies as a satellite (in business terms) where investment in PR is (or very soon will be) no longer necessary. Let the US PR companies run it. And the evidence is they don’t actually understand that different countries outside the US have different cultures, different needs and are not all clamouring to be 51st, 52nd or 53rd State."

Strong stuff.

I’d welcome comments on this issue before I add my own ten pence worth.

PR Week’s Hannah Marriott  is writing a feature based on a survey the magazine commissioned into clients’ levels of satisfaction with their PR agencies. And apparently they unearthed some common complaints.

According to Hannah’s Response Source enquiry (*): "The most common grumble was about lack of transparency in billing, with scores of respondents saying they wished PR agencies would provide them
with more detailed timesheets.  Other complaints included a perception that agency PROs lacked business
knowledge, were not proactive and that the senior staff who pitched for the
business rarely worked on the account."

Would seem PR Week is devoting two pages to agency PRO’s responses to these points.

Hannah has kindly provided all the questions PR Week want us agency folk to respond to – in the spirit of public service, why not drop her a line here if, as she says: "you have any very specific, interesting
examples covering any of the following points – on or off the record – and I’’ll give you a call back."

Deadline is 4pm tomorrow – so get your skates on.

Hannah’s questions:

Do you feel that some clients do not understand what their agency can do
for them? Why?

Can personal relationships sour an otherwise successful account? How?

Have you ever dumped a client? Why?

Are some clients totally unrealistic?   

Are some of the things they complain about unavoidable?

Do some clients lack the nous/vision/balls to do something different and
daring?

Are some clients a nightmare to work with for other reasons?

Also, why does the pitch team sometimes have to differ from the account
team?

(*) Yes, I got this via Response Source – and I realise that these enquiries are the copyright of Daryl Willcox Publishing. However, as I’m hardly guilty of persistent forwarding of
these enquiries and breaching of copyright, I’m hoping Daryl will forgive me this once.

Every year, former employees of my old PR shop Brodeur (A Plus) gather for a drink and a general catching up session. The 2007 event is due to be held in a few weeks time. Naturally, we have a Facebook group.

Looking at the member list, I’m reminded what a tremendous training ground Brodeur was back in the 1990s – the roll call of former employees now in top in-house PR and marketing positions reads like a who’s who list of the IT industry: Accenture, AMD, Apple, BT, Cisco, Intel, Nortel, Oracle, Skype, Vodaphone, etc.

Not forgetting those who went off and set up their own PR businesses eg Rainier, Prompt Communications, etc.

Looking forward to hearing what the great and good of UK tech PR have to say on August 29th.

Dave Winer is getting excited about the increasing use of RSS feeds from within Facebook. As others have pointed out, these feeds have already been in place for a little while now.

So what’s all the fuss?

As far as I can tell, it’s yet another indicator of the portal like nature of Facebook. Let’s take a couple of examples. Everyone is now familiar with FB status updates – if you have an FB browser plug in, these status updates pop up automatically on screen, so you don’t need to be on the Facebook site to see who is doing what. However, you can get status updates via an RSS feed. So all your friends status updates can be viewed whenever you feel like it in, say, Google Reader.

The Notes function allows you to import your own blog posts automatically into Facebook. The RSS feeds here work in two ways – people can get a feed of your blog posts specifically – or you can have a feed that captures all of your friends posts. What’s neat about this is that rather than having to subscribe individually to each blog, all blog posts are delivered via one feed.

"Posted items" are web pages, news stories, videos, etc that can displayed on your FB profile (and using the Share On Facebook toolbar browser plug-in, it is a very simple process to add things) – again, rather than have to check an individual profile page, you can simply receive all these items via RSS.

And if you use Google Reader, you can share stories you think are interesting – using the FB Google Shared items app, these stories are automatically shared with Friends – more generally you can see which stories are getting the most "shares".

In short, simply using Google Reader and FB, it is becoming possible to share interesting info with other people in a very easy way and get all the info you might want in one place.

Interesting times.

That’s what my friend Fiona Campbell-Howes described me as on a recent Facebook wall post.

She was referring to the the number of news links I post on my Facebook profile. It actually doesn’t take long to do – a combination of Google Reader and  the Firefox/Facebook share toolbar utility means you can find and post within seconds. 

Along with another Facebook app – Google Reader Shared Items – it is very easy to get a quick handle on the things that are interesting people at a given point.

The portal like nature of Facebook grows by the day.

TWL has a new home.

Very shiny – comments currently unmoderated it would seem – though I’m sure that will change shortly.

The latest issue of Peter Kirwan’s FullRun newsletter is bursting at the seams with good material.

However, his piece on the audience breakdown of leading UK national newspaper websites really does have some big implications  for PR (sub required – so get one).

The thrust of the argument is that the unique readerships of most of the top UK national newspaper websites are actually less than their print equivalents.  In other words, print isn’t dead by a long shot – and everyone questioning whether print media is still worth targetting ought to think again.

I hope Peter doesn’t mind me quoting the following at length – this is something that deserves to be discussed far and wide.

"Neil Thurman of City University has tapped up NielsenNetRatings for data on how many US readers visit the major UK nationals’ sites each month as a proportion of total unique users. Here’s
what he found:
* Independent.co.uk: 73%
* TheSun.co.uk: 42%
* TimesOnline.co.uk: 41%
* FT.com: 39%
* Guardian.co.uk: 39%
* ThisIsLondon.co.uk: 33%
* Telegraph.co.uk: 28%
* DailyMail.co.uk: 11%

It seems fairly clear that most of the UK nationals receive between 30% and 40% of their unique visits from the US.

That’s higher than the numbers revealed by the Times and the Sunday Times
nearly a decade ago. Factor in traffic from the Rest Of The World, and the
proportion of non-UK traffic arriving at UK news sites on a regular basis
could be as high as 60%-70% of unique visitors.

In the case of tech-focused sites, which carry a large amount of what
might be described as globalized news, the proportion could be even
higher.

For PRs based in the UK, the implications are interesting. To tease them
out, it’s worth taking a look at a recent column written for Press Gazette
by John Duncan, a former managing editor of the Observer.
Duncan argues that "every single British national newspaper website still
has a lower audience in the UK than the newspaper it is supposedly
killing".

The claim will sound discordant to anyone who has bought into web
triumphalism. But in the case of the Guardian — the UK’s best-trafficked
newspaper site — Duncan is able to demonstrate it convincingly.
Duncan argues that only 34% of the unique users who visit Guardian
Unlimited originate in the UK — a figure that sits well with Neil
Thurman’s data.

On this basis, he suggests, Guardian Unlimited attracts 270,576 UK-based
unique users on a daily basis. By contrast, the Guardian’s print edition
sells 20,000 copies *more* than that on an average day.
If you take print readership — not just circulation — into account, the
disparity grows even larger. According to the National Readership Survey,
the Guardian’s print edition attracts an average daily readership of
986,586. That’s almost four times the size of what we might describe as
Guardian Unlimited’s audience of UK-based unique users.

The dynamics won’t be different for any of the Guardian’s rivals. And it
seems reasonable to suggest that similar principles apply to UK-based B2B
and consumer tech publications.

These days, it’s becoming fashionable for tech PR agencies to quietly
criticize clients who display a continuing preference for print-based
coverage. But if Thurman and Duncan are correct, it’s hard to criticize
anyone who thinks that print still plays a major role in influencing
buyers and significant others.

The bottom line is that PR professionals working in the UK are paid to get
their messages in front of a UK-based target audience. In many cases, print
remains a highly efficient way of doing just that.

Having just installed the new Documents app on Facebook, I was reminded that this kind of collaborative doc sharing has been around for a while ie Google Docs. On the surface, you’d have thought it is the kind of thing that PR companies might make routine use of for drafting and approving releases. Perhaps they do, but I haven’t heard much talk about it.

However, given the general downer that journalists have on press releases, it occurred to me that some entrepreneurial hacks could offer to edit, advise, etc on draft press releases – for a fee of course (or for free in they are feeling charitable). And all this could be achieved in a confidential way as only specific people can have access to the documents. PRs would learn how to write better releases as well as get feedback on whether their stories are any good.

Dunno – maybe it’s a stupid idea – then again…….

 

Saul Hansell at the New York Times has this to say about dealing with PR people on Facebook:

"I don’t accept friend invitations from most people in the public
relations business, especially at agencies. I feel guilty about this,
as many of them are quite friendly and nice people. But the
relationship is too complex and mostly works better at arms length. It
is their business to sell clients on their special relationship with
reporters, and it makes me uncomfortable to facilitate that."

Once again, the topic of PRs "special relationship" with journalists rears its ugly head. And in one sense, Hansell is absolutely correct. Every PR agency makes claims about the strengths of their relationships with journalists – and attempts to use this as part of their sales pitch to clients.

Of course, agencies don’t have relationships with journalists – people have relationships with people – as I’ve discussed previously, there is no real objective measure of these relationships – or rather, no one has yet attempted to put in place a system for measuring it. Perhaps it could be done. On a qualitative level, journalists could be asked to rank agencies and individuals as to their value to them. Of course, this presupposes that these agencies have a reason to be in regular contact with these journalists. The old adage of "if I have to choose between my journalist relationship and a good story, I’ll take the good story" still applies."

Which is why Facebook could be a way for journalists to demonstrate a relationship – and provide a level playing field for those times when PRs with no relationship with a specific journalist feel they have a good enough story.

Note that Hansell says he doesn’t accept friend invitations from "most" PR people – so by definition, he does accept some. Perhaps unwittingly, he is already showing which PRs he trusts more than others. Also, just because he has a PR on his friends list, it doesn’t automatically mean he will give more credence to a story pitched by one of these people – it simply means he would be more inclined to give the story a hearing – he ultimately is the arbiter of what he writes about.  As ever, there are no guarantees.

From my own experience, a goodly proportion of my 200+ Facebook friends are journalists – virtually all have been happy to add me as a friend – they all have the choice of "un-friending" me should they choose. I’m not saying it’s perfect, but at least this is a step in the right direction for providing some kind of transparency to the process.