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November 12, 1999

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Speakers Call For New Formulae In Internet Businesses

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S Mitra Kalita

Marketing and public relations are often overlooked areas in the Internet world, panelists told the TiE-NY gathering on Wednesday night.

The four panelists outlined how these two areas are integral, vital parts of any Internet start-up or technology company. There were about 250 people attending the discussion commemorating the one-year anniversary of the New York chapter of The IndUS Entrepreneurs (TiE).

Citing a Columbia University Business School study, Don Middleberg said "one article is worth 10 ads." The chairman and chief executive officer of the public relations company, Middleberg & Associates, said the "tried and trued" formulas of corporate America don't apply to the Internet. Strategic planning is outdated but strategic thinking is not, he said.

Moderated by Columbia University journalism Professor Sreenath Sreenivasan, the panel discussed how to present and package stories of interest to journalists.

Sreenivasan, co-founder of the South Asian Journalists Association, said the relationship between reporters and public relations need not be so adversarial. "We have stories we need to write," he said. "Public relations and marketing people have stories to tell."

Shirin Bhan, president of New York public relations firm KNB, was another panelist. She took the audience through a prototype company named Startup.com and outlined ways in which entrepreneurs can market the company to both the public and the media.

In Bhan's example, Startup.com's founder was a 27-year-old woman -- a fact that may make her story more newsworthy.

Like Middleberg, Bhan stressed the difference between a Fortune 500 company and an Internet start-up. Public relations may begin with founders and CEOs slapping stickers on white folders to create promotional materials and press kits, she said.

The panelists stressed the need to find out where one's competitors stand, then dominate the niche market.

Customer service has been virtually ignored on the Internet, such as how a person can return a purchased item or speak to a company representative, Middleberg said.

Advertising does not mean just banners; the Internet calls for interactive marketing, he said. Panelist Nick Pahade, co-founder and chief strategic officer of Beyond Interactive, the online advertising agency, demonstrated an ad his company had designed for Pringles potato chips. The ad enabled a user to blend the popping sounds of the can and the crunching sounds of chips to make his own music, then forward that creation to friends over email.

Going public doesn't have to be a painful process, Anna M Svaldi, vice-president and founder of Edelman Public Relations Worldwide, told the audience. In her cost-benefit analysis of going public versus staying private, she said public companies attract employees and incur lower costs, but also face greater scrutiny and shareholder risk.

Svaldi suggested that companies keep sections on their web site allowing journalists and investors to obtain information.

None of the services of an Internet or hi-tech public relations firm come cheap. Middleberg's fees range from $ 25,000 to $ 50,000 monthly.

"There's no cheap way to do PR," he said. "You get what you pay for."

Tips from panelists on marketing and public relations

The following are some of the key points that emerged at the TiE-NY event this week at the Yale Club:

  • The strategic planning you learned in business school is outdated. The tried and trued formulas don't work in the world of e-commerce. Strategic thinking, meanwhile, can really help a company take off.
  • Great content is the driving force behind a successful site.
  • Not enough people are paying attention to customer service, such as how an online consumer can return a purchased item, speak to a sales representative, etc.
  • Always find out where your competitors stand.
  • Public relations at a Fortune 500 company is different from that of a start-up. You may have to be more hands-on in terms of promotional materials.
  • Figure out who you want to reach, your niche, and why.
  • Going public doesn't have to be a painful process. Make sure you have a game plan and time frame.
  • During the process of going public, clear press releases with company counsel.
  • Have a section on your web site exclusively for the press and/or the investor.
  • Establish an email 'hotline'.
  • Size doesn't matter when it comes time to choose a public relations/marketing firm. Your ability to form a partnership, rapport and good working relationship does.
  • Follow your gut instinct with whom you can and can't work.
  • There's no cheap way to do public relations. You get what you pay for.

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