PREVIEW AND REVIEW
PR Execs Look at Strategy in a Tough Market; Better Times Seen Ahead
Orange County’s public relations companies battened down the hatches once again this past year.
Clients scrutinized public relations and marketing efforts and cut costs.
As budgets shrank, some area shops felt the pinch, either laying off workers or holding off on filling open positions. Many relied on freelancers.
Despite early optimism that the economy would soon rebound, things remained tough. The U.S.-led war in Iraq created uncertainty, and the economy’s struggles persisted longer than expected. Consumer confidence was shaky.
The tough business climate of this past year forced OC’s public relations companies to really focus on their business strategies.
Some fared better than others. Nearly all made changes.
Business Journal staff reporter Jennifer Bellantonio talked to executives about changes they made this past year, what major industry trends played out and how they expect the rest of 2003 to unfold.
Lisa Zwick
Senior vice president and general manager
Benjamin/A Weber Shandwick Co., Irvine
Changes: We’ve re-examined our account structures to make them more flexible and in-line with clients’ budgets and business objectives.
We’ve also established a practice group approach that focuses on specific needs of particular market segments. This allows us to allocate the right resources to each client, leverage opportunities and maximize budgets.
Trends: We’re seeing a stronger focus on crisis communications because the business climate has dramatically changed in the past year.
Even if companies weren’t directly affected by a crisis, executives have a better understanding of their need to have solid programs in place prior to a potential event.
We’re also seeing a return to the fundamentals. While tactics haven’t changed, companies are becoming much more focused on their markets and how to effectively reach them.
Outlook: It’s still going to be tight through the end of the year.
The good news is that we’re starting to see an uptick in new business activity overall, particularly from deep-technology and semiconductor companies.
This is a positive sign, since these companies can generally be a leading indicator for the rest of the technology sector.
David Paine
President
PainePR Inc., Irvine
Changes: We’ve been very careful about our costs, staying true to our budgets and not exceeding them even when business has been good.
We’ve stepped up our aggressiveness in pursuing new opportunities, expanded into new practice areas and continued to work hard to retain our people and reward them for their hard work.
Trends: We’re seeing public relations agencies going out of business or restructuring,bigger agencies are competing for small projects they never used to care about.
Outlook: All firms are vulnerable to a sudden downturn in business if they lose major clients because opportunities to replace them are more limited.
We’ve been very fortunate to have growth this year, but we remain cautious.
Jessica Spaulding
Vice president
Amies Communications, Irvine
Changes: While we haven’t made any significant changes, we’ve continued to invest our time and efforts into remaining a full-service agency.
That way, we’re diverse enough to meet a greater variety of needs, whether it’s Web site strategy, brand development or media relations.
That’s important when you have limited budgets. We can work with clients to focus money and time where it will be noticed by their primary audience.
Trends: Three things stand out as trends.
Web sites are important on all levels. Web site strategies can address a great deal, including internal employee relations, client relations and brand development.
Brand strategy, creating a value promise for your business, has become critical, and not just from a “marketing” perspective.
At the end of the day, it’s more than tag lines and logos. Companies realize that they have to talk the talk and walk the walk if they really want to have a strong company brand.
Media and community relations are important parts of fulfilling a company, product or project’s brand promise.
We’ve all seen companies that have a huge disconnect between who they really are and what they say, especially in the media. A company executive must clearly articulate his brand promise and offer the evidence to support it.
Finally, we’re focusing on how we “spread the word” using community relations, coalition building or one-to-one programs that identify and encourage key customers and influencers to help tell the story.
Outlook: There are a number of factors that will impact the balance of the year.
Since we’re involved in real estate and economic development, we’re closely watching the state budget issues and general climate in California for business.
However, for our agency right now, the rest of the year looks good. We’ve got a good base of clients, many of which have been with us for five to 10 years and more.
We’ll stay focused on service and good creative strategies. Branding is going to remain an important strategy.
Companies will continue to look at how they are perceived in the market. Dollars will continue to be spent on a diversity of tools because companies can’t rely on one method of marketing and outreach.
Ralph Rodheim
President
Rodheim Marketing, Costa Mesa
Changes: We’ve expanded by adding a New York office and consultant, Mary McGeachy.
As the firm’s client roster grows, we have a continued need for local, national and international exposure, and many key outlets are based in New York.
Trends: With the tight economy, we found clients have not increased advertising budgets and have placed a larger emphasis on public relations and relationship marketing,special events and community relations.
Clients are realizing the value of third-party objective reports and getting in front of their target markets face-to-face.
Outlook: 2003 has been the best year in the firm’s 18-year history. Because of the vibrancy of the Orange County economy, we also project an increase in clients seeking domestic and international exposure.
Hilary Kaye
President
Hilary Kaye Associates Inc., Tustin
Changes: We have made a few changes that address the new business climate.
I think one significant change was our decision to address impatient clients (those wanting immediate results) by providing shorter campaigns with more narrow focus, in some instances.
While a six-month or one-year campaign with a broader focus would provide the most benefit to the client, in some cases we have agreed to halve the campaign and front-load activities designed to “stir up the pot” quickly.
In some cases, this has worked great and we have continued to execute campaigns of normal length and normal success. In other cases, the new “mini” campaigns were too quick with too few hours allocated to create the needed results.
In the past year, we have tried to identify which clients would benefit and gain good results with this approach.
One more change was to become much more diversified in our client list.
For many years Hilary Kaye Associates was eclectic as far as clients. Then we had several years with a strong focus on emerging technology companies.
Now we are diverse again,maintaining our interest and capabilities in emerging technology but embracing many different industries that require assistance more than ever in today’s economy.
Trends: We have also found ourselves providing more integrated programs to complement our focused media relations programs.
While in past years many companies hired us for our media relations expertise and that was our primary responsibility, this past year we have been doing more integrated programs in which media relations is just one facet.
We have further developed our outside alliances,to supplement our in-house staff,to be able to provide the breadth and depth of work required by our clients this past year.
Outlook: I think the rest of 2003 will be stronger than the first half.
Already, the second quarter was much better than the first. We keep seeing new clients, receiving new referrals and doing good work.
The biggest difference is that the size of the clients and the budgets they bring to us remain smaller than we are used to.
I think that as the economy stabilizes and companies become more confident, we will once again see companies understanding the importance of public relations,and media relations in particular,as they try to build credibility and differentiate their companies.
Erika Price Schulte
Public relations director
RiechesBaird Advertising, Irvine
Changes: I wouldn’t characterize our efforts as “changes,” but I would say that our focus on branding has intensified.
Our priority for each client is to ensure that the public relations messages support the marketing messages. What is being said to the media should be consistent with what the sales force is telling its customers, what the direct marketing and advertising efforts are telling the marketplace and what the chief executive is telling the stakeholders.
Anything less means confusion and a lack of credibility that can be difficult and expensive to overcome.
Trends: In the current climate of corporate accountability, smart companies are preparing their spokespeople well and allowing the media access to senior level executives in order to instill or further a sense of trust and credibility.
A number of our clients are leaders in their industries, and we are encouraging them to embrace that role.
Make bold statements if you can support them. Defend your turf.
This gives confidence to your sales force and your customers and raises the morale of your entire team.
Outlook: Generally, we are feeling very positive about the start this year.
A year ago, we were seeing early signs that things were stabilizing, and now, six months into 2003, we’re seeing the effects,real improvement.
Our most successful clients are committed to a long-term public relations strategy, incorporating PR into their branding and using it to lead brand-adoption programs with their employees, partners and customers.
We’ve seen a definite move from reactive to proactive. Many companies have good news to share and want their audiences to know it.
We are also seeing quite a bit of activity on the new business front from legitimate prospects that recognize that they need a public voice in order to remain competitive and gain an edge.
Christopher Perez
Senior vice president
Magnet Communications LLC, Corona
Changes: In 2002-03, we were far more creative with staffing than we have been in the past, allowing for more part-time and freelance relationships than before.
This allows Magnet to retain the expertise necessary for specific accounts but without the burden of a full-time payroll.
Trends: We continue to see much more attention made to Hispanic audiences, as clients begin to wake up to the fact that there is tremendous buying potential from this segment.
We recently published two white papers on marketing to Hispanics.
The brand manager for one of our clients decided to wholesale move her public relations budget from the general market to the Hispanic market.
Outlook: “Steady as she goes” is what we are hoping.
We had a solid first half, and if we can continue this trend, we should have an up year overall.
Jennifer McLean
Vice president, director of public relations
O’Leary and Partners, Irvine
Changes: No major changes, just more targeted new business outreach versus mass mailings. We also target our new business efforts a little more regionally.
Trends: The enterprise technology sector has been a public relations challenge.
Many of the first-tier enterprise publications were focusing editorial pages on the top-20 tech companies.
Our strategies to overcome this were to focus on thought leadership programs and to create a forum for our client spokespersons to be seen as industry leaders available to editors for breaking news and industry trends.
The top-20 company focus may be shifting, but our honed thought leadership programs are valuable tools for all future outreach.
Another trend is the focus on event marketing; our clients are showing an increased interest in reaching customers this way.
Outlook: A good year so far. We are seeing new business opportunities opening up in the next six to nine months.
And O’Leary and Partners has the advantage of being a full-service advertising and public relations firm.
Many of the potential business opportunities are companies looking for a full service partner to do an integrated marketing approach.
We have been able to grow the business from within by expanding advertising and public relations programs for existing clients.
