When marcoms group Loewy decided this March to merge five of its PR businesses to form Speed Communications, it turned to one of the industry’s most outspoken and talented duos to steer the multi-sector agency through the merger and beyond.
Stephen Waddington and Steve Earl have a successful 15-year business partnership and their appointment as co-MDs of the newest agency on the block was the culmination of a journey which started as two account managers who thought they could do it better than their boss. As well as their extensive industry experience, the pair have earned a reputation for their forthright, no-holds-barred opinions through their involvement in the Jackenhacks, the irreverent alternative PR awards for the technology industry, which this year have ruffled more than a few feathers. Catching up with the Steves over breakfast six months post-merger, they are in expansive moods, keen to talk about repositioning the business to make the most of emerging digital comms, the "snake oil social media salesmen", their fear of "digital ghettos", PRs who can’t write and which agencies are getting it right. Breakfast is going to be lively...
The pair, both former journos, started their PR careers during the heady days of the hi-tech boom in the early 90s when the UK tech PR scene was dominated by three main players, Text 100 (now owned by Bite), the still independent Firefly, and A Plus, one of the forerunners of today’s KetchumPleon. They met in 1995 at A Plus, where they did some of the early PR for Cisco in the UK, as well as IBM, and a stint at Weber, now Weber Shandwick, soon followed. It was while working in a big agency framework that they thought they had what it took to start their own PR business.
"It was a time when the dot com business was booming and we were looking at our boss and thought ‘we could do that’,"recalls Steve Earl, the more softly spoken of the two.
So while in their mid-20s they jumped on a plane and set off on a capital raising mission to the States seeking out agencies without a London office and offering to do their PR. Ballsy? Not according to Stephen W. "No it wasn’t. We thought it was completely de-risking what we were doing because we were creating a channel – like Weber was doing at the time of the dot com boom – of new business straight from the States."
While they wanted to emulate the Weber new business model, they turned their back on the traditional big agency modus operandi – "rent three times as much space as you need" – and a modest Rainier PR opened its doors on September 1, 1998. The Steves had found a US-based backer willing to "put up a chunk of money" to get the business off the ground and they were away. The tech-focussed agency broke even in its first year, made a profit in the second and by the third year the duo started buying out the majority stakeholders. They admit they made a lot of mistakes over the following years but they had a plan: "Grow to at least £2 million in fees and a 25% margin."
The dot com boom had triggered the launch of many more tech-based PR agencies but Rainier’s growth wasn’t as fast as some of its counterparts during the boom years. "It took us two years longer than we wanted" because of 9/11, the inevitable dot com crash but also because they refused to adopt the ruthless short-term attitude favoured by other agencies. They turned their back on big accounts "£25,000 a month and the like" which refused to sign a contract.
"We could see it would all be going to pot in six months but we’d have taken on three new people and then in six months we’d have to let them go. Our reputation would have been in tatters."
It was a good decision. "We came out of it stronger. We didn’t have any debt, we were still profitable and we were still doing 20% margins."
Loewy came knocking in October 2006 when they had built Rainier’s turnover to £2.5 million, and in the final year of a three-year earn out deal the pair was asked to head up Speed, the company formed from the merger of Rainier, Custard, Lighthouse, BMA Communications and Mantra. The 40-strong Speed business, based in new offices in Leicester Square, has an annual fee income of £5 million and clients include The Economist, ntl:Telewest Business, Tesco, Toshiba and Wickes. The agency has four practices: consumer, tech, business comms and corporate.
While life post-merger is sweet: "we’ve got a very supportive and understanding board...we feel incredibly fortunate," both are have a sense of dot com déjà vu with the frenzy of activity around social media.
Stephen W explains: "What we’re seeing is companies building an audience without thinking about the intrinsic business model in the same way that companies were during the dot com era. We’ve got businesses coming to us saying ‘we want to build an audience’ but we say to them ‘how are you going to monetise that?’ and they haven’t thought about it. So you start to talk to them about affiliate marketing and about building an ad network and they just haven’t begun to think about it."
They have also been approached by social media businesses offering payment through equity rather than fees. "What’s different this time is there isn’t a wall of equity to support people so you’ve got to have an incredibly good management team or you’ve got to have access to money. A lot of people are just getting in on the exuberance of it."
Stephen W says agencies are doing one of three things to get on the social media bandwagon: either hiring a social media guru, "they’re like gold dust", forming a specialist social media team or, as Speed is doing, training up staff.
With Stephen W at the helm, Speed has invested heavily in social media via a "ruthless bootcamp" to embed digital skills across the agency and ensure all Speed consultants are up with the latest in social media. Everyone in the agency has a Twitter account and all consultants must post a blog at least once a week – "and they’re KPIed on it".
"Make no mistake 40% of our business is digital now – you have to have a digital solution for every brief. Almost everything we do for The Economist is digital. The whole industry is going to go this way...and in five years’ time social media will account for 80% of our business.
"It’s where the future is – we’ve come from zero to having fairly good expertise across the business. You can’t just have a bunch of geeks in the corner, however nice they might be."
But they don’t have a lot of time for those in the industry who think the social media solution is to recruit a 25-year-old figurehead and call them head of social media. Steve E says: "It’s starting to become a digital ghetto. They’re never really going to develop the rounded counselling skills they need for clients."
The pair are big fans of newcomers Diffusion PR and Wolfstar who they say have "reinvented the way PR is delivered and rethought the service model", while at the other end of the scale are businesses who have the "digital figurehead" but don’t know what else to do.
They are also agreed on the future of print media and an increasingly fragmented market. Steve E says: "Some clients want the glory piece they can put on the wall but a piece in the paper is not always going to be read – influence can be halved if it’s a horrible, windy rainy day and people on their way into work are more interested in the drips on their umbrella than reading the FT. The next day there might be delays and they read the paper cover to cover. You can’t account for it and you can’t really measure it.
"When it’s online...you take it and you forward it and it has a shelf life. People can dismiss today’s scandal as tomorrow’s fish and chip paper but online it’s still valid and still has that trail. I still pull up and read articles that are seven years old."
Steve E says it is crucial for PRs in the new world of social media to be able to write.
"Fundamentally to do digital well you’ve got to be able to write. It used to be in PR that you could get by without too much writing – you could get on the phone and blag it to sell in a story – but now you’ve got to be able to write attractive copy."
Measurement and evaluation is another issue close to their heart. Both agree that PR is becoming more of a science and Speed has invested at least £5000 developing a Speed Scorecard evaluation model spearheaded by Steve E. "The problem with the fragmentation of the media is that it’s easier to get higher volume press coverage but the difficulty is getting the right quality and the right audience. So we’ve come up with a formula based on inclusion in key titles, potency of headline, position on page, who wrote it, that sort of thing. We have a standard scorecard system where you plot it in and come up with a score. You’ve agreed what score you want to achieve in advance and you measure against that. It works really well when you’re doing international work – you set scores for each country."
As well as crunching the numbers Steve thinks agencies have to get better at actually communicating to clients what they have achieved – "not just posters and coverage montages but videos explaining it so clients can send it around internally".
Speed also has a "digital dashboard – like a Facebook scrapbook" that clients can access at any time to check on what coverage their company has received, what is being said about them on social media channels and what their competitors are saying.
As the interview draws to a close I have to ask what skills each brings to the partnership as every business book tells you that for a successful business partnership to work the partners need different but complementary skills. Steve E quickly quips: "Who’s the dog and who’s the tail?" The reality is that both share strategic and creative streaks but Steve is primarily focussed on client service while Stephen is the face of Speed. Both still spend half their time on client work - "the right 50%" – and, true to their journo roots, still like to roll up their sleeves and get involved in media relations and story development.
Finally no meeting with the two Steves would be complete without asking them about the Jackenhacks (formerly the Flackenhacks but renamed this year out of respect for Michael Jackson), the tongue-in-cheek tech industry awards which they sponsor and front as their alter-egos Tarquin and Hugo
"All we’ll say is that this year the industry has lost its sense of humour."
www.speedcommunications.com
Stephen W and Steve E were speaking to Celina Maguire, GorkanaPR Consumer Editor. Login to view entire article