The New View From Object Towers

Top UK PR agencies caught editing client entries on Wikipedia

Front page piece from today's PR Week which claims that: "PR agencies are flouting Wikipedia rules demanding they do not edit the site. At least six of the PRWeek top ten UK agencies have edited the site in the past year, according to WikiScanner, a new programme that tracks the IP addresses of computers editing the online encyclopaedia.

FD is the biggest offender, filing 25 edits, primarily concerning clients Russ DeLeon and Ruth Parasol – founders of the online gambling company PartyGaming."

I've always thought the blanket ban on PR agencies editing a bit draconian - surely there would be no issue for PR companies to do this providing it was done transparently ie their interest was declared and they could back up the rationale for the suggested changes.

Then again, its Wikipedia's show - so if PR agencies knowingly flout its rules - and get caught - only themselves to blame.

Still - not just PR agencies doing this kind of thing - as this piece  shows, everyone from the BBC, the CIA and the office of the Australian Prime Minister are at it.....still, kudos to the BBC for running such a story and helpfully including a link to the Wikipedia Scanner.

Farewell UK tech PR and journalism - the debate

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.

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.

Astronaut, not PR, number 2 choice of career for UK jobseekers

It (sort of) says here.

In fact, PR doesn't appear anywhere in the list of 10 ten jobs.

Running your own business is number one.

Least favourite jobs were politicians, plumbers and dentistry.

In addition, the Reed Employment sponsored survey found that: "despite the increased pressures upon companies to improve their brand image and act in a social responsibility (tut, tut, where was the proof reader) way, corporate reputation has very little influence over a job seeker. Just 6% of respondents would select a company because of its corporate social responsibility programmes and only 2% stated they would be swayed by an employer’s brand image."

Perhaps all those references to PR supporting brand building for recruitment purposes need to removed from agency credentials?

90pc of PRs say online coverage has become more important in the last 12 months

Says a new survey from Webitpr.

But more important than what? Print media?

As we've said before, some semblance of balance needs to be maintained on the online vs offline press coverage debate.

Happy birthday CD - the format that killed the music industry

The BBC runs a piece today about the 25th anniversary of the CD, saying "it remains the dominant format in spite of the growth in digital downloads."

How much longer it remains dominant is a moot point. Robert Sandall has written a very good article in the latest issue of Prospect magazine about the economics of the music industry - and it is plain to see why the business is in such a blue funk.

For example: "Although Britons still buy more CDs per head than anyone else—2.7 in 2006—the market for recorded music is in rapid decline. In the first quarter of 2007, the market for the top-selling 200 CDs in Britain shrank by 20 per cent compared to the same period in 2006. In the US, CD sales in 2007 are down by 15 per cent, in France 25 per cent, in Canada 35 per cent. The German market, once the largest in Europe, is now no bigger than that of the Netherlands."

Sandall argues persuasively  that the CD actually contained the seeds of its own downfall - and that some in the industry were well aware of this when it was first introduced.

"One of the few industry moguls to raise his voice against the digital format in its early days was the late Maurice Oberstein, an American who was latterly head of the Polygram UK (later Universal) label. "Do you realise we are giving away our master tapes here?" he asked at an industry event. At the time, everybody was too busy counting the cash to listen. But as the advent of recordable CDs kickstarted a black economy in counterfeits in the 1990s, Oberstein was proved right."

In short, the numbers just don't add up for the recording industry.

"Far better to download songs; at the iTunes music store, tracks retail for 99 cents in America and 79p here. In Britain, at the end of the 1990s, CD singles sold for £4. Of that, the artist received about 50p, while the record company took as much as £1. Under the new web-style arrangement, the artist is lucky to get 10p, and the company might gross 30p.

This destruction of the value of individual recordings explains why, even if we were to carry on buying recorded music in the quantity we did at the end of the last century, the prospects for suppliers would still be bleak. However high the record companies worldwide pile their audio products in future, the only way they will be able to sell them is cheap. In Britain, the 10 per cent of singles still sold on CD now retail for just £1.49.

Record company insiders are aghast at the demise of what was, for the last two decades of the 20th century, their golden goose. And some of them know that they were partly responsible for killing it."

The unexpected punchline in Sandall's piece is that live music is seeing a resurgence:

"A rediscovery, or a renewed appreciation, of the communal source of music-making—and listening— must lie near the root of this upending of the music business. As personal stereos and MP3 players have grown in popularity, so has an appreciation that music isn't just something that goes on between your ears. The guitarist of the American hardcore band Anthrax expressed this rather neatly: "Our album is the menu," he explained. "The concert is the meal."

In his book e-Topia, William Mitchell relates the increasing value of shared experience to the isolating nature of electronic or online virtual worlds. "In conducting our daily transactions, we will find ourselves constantly considering the benefits of the different grades of presence that are now available to us, and weighing these against the costs," he writes. Being in the same place at the same time as a live performance, music fans appear to have decided, is the rarest and most precious presence of all."

So - happy 25th birthday, CD. However, perhaps you won't be getting as many music biz execs attending the party as you might once have.

Farewell UK tech journalism and PR?

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 gives agencies a chance to defend themselves: you have until 4pm tomorrow

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.

The PR power of the Brodeur A Plus alumni

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.

Facebook opens up with more RSS

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.

Self-facilitating media node

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.