Below is the original column from Aaron Lazenby of TheStandard.com, and then INFLUENTIAL's response, which was excerpted in the following week's e-newsletter.

Marketing Muse: Going Back to Basics
by Aaron Lazenby

Article from TheStandard.com's "Net Persuasion" newsletter, March 21, 2001

As the noise of the Net boom dies down, the PR industry shows signs of returning to tradition.

At the Internet World conference last week in Los Angeles, an unusually low-key mood prevailed among a crowd that one might expect to be filled with some of the most animated PR-minded hipsters in the business. Apparently, market forces have placed even the noise machine on pause.

While many have pointed fingers at the public-relations industry in recent months for inflating the new economy bubble, some clients are saying they expected too much of their PR agencies - despite their hefty monthly retainers.

Steven Yampolsky, general manager for online encyclopedia site TheVinesNetwork.com, signed his company with a midsized Internet-savvy agency after spending months searching for a PR firm. But after realizing that the modest monthly retainer would buy his company access only to the PR firm's junior staff members, he discontinued the relationship. "The whole experience left a slightly bad taste in my mouth," Yampolsky says, adding that many of his colleagues at other companies had similar experiences. "The only people I know who were happy were those who were spending $80,000 a month on PR."

But to say the PR industry should be blamed for gorging itself on the fat of the new economy is to miss the point. Public relations is a reasonably young industry, and the Internet accelerated its growth just as it was coming to terms with its own success. As the Internet grew, the PR industry - once focused solely on media relations - was suddenly asked to answer difficult questions about running a business. Which new technologies would best spread a client's message? How should a CEO change a company's business model so that it could stand up to the scrutiny of the media and the analyst community?

Providing answers to those questions requires a level of involvement with a client's business that is not for the inexperienced. Brenda Lynch of the PR giant Manning, Selvage and Lee says one of the reasons that companies were unhappy with their PR firms is that many experienced firms placed a moratorium on new business during the Internet boom. "It's a bandwidth issue," she says. "That left companies who wanted public relations representation and couldn't get their first, second or even third choice to find alternatives." And those alternatives included retaining freelancers or hiring extremely young publicists to run PR internally.

Now that the noise is muted a bit, Lynch says she believes experience is once again the industry's most valuable commodity. "The fact is, gray hair is in fashion again," she says. "It's great when pros can go out and say, 'I've seen this before.' "Even Yampolsky, whose company hired an internal PR person after severing ties with its agency, still says he understands the value of retaining an experienced agency. Now that there are fewer companies vying to sign with the top PR firms, potential clients are in a better position to fully research an agency - not just be thankful for what they get. Yampolsky says the firms that once turned his company down have not only approached him recently, they've lowered their rates. "The Internet companies that are still around are not going to blow cash on stuff anymore," he said. "But we will look for PR again."

INFLUENTIAL's Response

Appeared in TheStandard.com's "Net Persuasion" newsletter, March 28, 2001

Aaron:
As a corporate communications consultant, I read your article "Going Back to Basics" with much interest. Many of the points you make about the return to sanity our entire industry is experiencing are well taken. Yet your take on PR's adjustment to new market realities included many misguided assumptions.

Pointing the finger at PR is always easy, the profession by definition puts itself on the front lines. But PR was not alone in inflating the Internet Bubble, it had the press, venture capital community and individual investors marching right in step.

You state that PR is a "young industry." I would like to remind you that PR as we know it today was practiced first by Edward L. Bernays in the 1920s, which ranks it older than the computer age, TV, and most media companies. By your timeline, we would have to rank new economy journalism as younger still.

As you rightly point out, the shortage of qualified PR people hit all technology-centric agencies hard. Many seasoned pros chose to leave and strike out on their own. Indeed the boutique agencies they are founding today will become the mid-sized agencies of tomorrow.

You imply that the "return to tradition" PR is witnessing is tantamount to a dumbing down of its role and its goals. PR at its best has always been strategic, the first line of offense in outbound marketing. Media relations is merely the means of building a company's image and should never be the only activity, or even worse, the end in itself. Sadly, when PR is locked out of the smoke-filled room, it is often the client's choice to in effect decrease its value.

The PR industry is indeed in a period of retrenchment and reassessment. As goes the industry, so goes PR. But I venture to say that as soon as marketing budgets increase once again, the perceived value of PR will be the first beneficiary.

Signed,
Michael Teeling
INFLUENTIAL

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