05 March 2007

Up and down...but not out. It's Claire and Mark...

So, as mentioned and by pure coincidence, we've recently been in touch with tech PR's most senior married couple, the pair that runs the country's third best small company to work for...according to the Sunday Times...Firefly Communications. Yep, it's Mark Mellor and Claire Walker...seen here in their going out gear.

Anyone who's been involved in technology PR for more than a decade has to have an interest in the Firefly story. The glory days, the boardroom revolts, the big name client losses...these two have seen the lot, and still kept plugging away.

Of course, we don't get to interview Mark and Claire in person, so our grilling is relatively mild...and will no doubt lead to accusations of TWL being in the pay of Firefly. All we can do is send over some hopefully provocative questions and cross our fingers for some honest responses. Even given the fact that they're two seasoned PR pros, I think they've done that...it's quite long, but it's worth a read...

TWL: Would it be fair to say that the last few years have been something of a roller-coaster for the two of you? How’s your current state of mind?

Claire and Mark: We wouldn't necessarily call it a roller coaster, but it’s certainly been challenging. We've ridden the dotcom boom and bust, stuck at it through an industry recession, and seen client budgets mostly halve and expectations double. At the same time we’ve rebuilt our company into a multi-specialist agency, brought new talent on board and broadened our client base beyond tech to encompass pure b2b and consumer brands.

We’re never complacent and our current state of mind - looking at our client list, people, newbiz pipeline and current business performance - is "pretty confident". We could always do better sure, but suspect many agencies could say that about themselves. Right now we’re actually doing some of the most stimulating variety of client work that we’ve ever been involved with. There’s no shortage of opportunity for those who gather the right people around them and we feel there’s still plenty of room for us and Firefly to flourish.

TWL: You were formed in 1988 and pretty much flew through the 90s and into the new century. I’d have thought that during that time you’d have had more than one offer for Firefly, or were even tempted to float the company, why did you decide to remain private and – looking at some of your peers from the time – do you have any regrets about doing so?

C & M: We've had many offers but we didn't have the appetite and desire for a sale and still don't right now. We never felt that any of the options presented so far could offer us a better future – either personally, or for the company and employees, or for our clients.

We enjoy our independence and feel young enough to continue working, enjoying what we do and steering our own course. We've never seriously considered a public listing, as having numerous external investors disconnected with a people-based business and with conflicting short-term agendas has zero appeal. Nor have we ever packaged ourselves up for sale. Many former agency owners who have sold out have privately commented that they regret doing so. They miss their days of independence, are often bored and demotivated, and aren’t rolling in money like they thought they’d be!

We certainly have no regrets about remaining independent. There’s a lot to be said for having a big say in your own destiny and being a private company – especially in this industry and especially now. So many M&As turn to nothing and result in zero net added value. We want to grow, but we’d hate to be slaves to acquisitions and answerable to an accountant in order just to fuel a gravy train for demanding external investors.

TWL: Some of the tech brands you’ve worked with have been incredible – Oracle, Dell, Motorola, HP (or was it Compaq? I can never remember…), Google to name but a few – and yet none of them remain a client today. Why is that?

C & M: I think you’d find this true of any 10-20 year old mainstream agency. 18 years in business is quite a long time and in that time many other agencies have come and gone. It’s a transient industry with in-house people moving as frequently as agency, plus the usual client M&As to cope with (especially rife in hi-tech). With the exception of Google who we worked with for most of 2005, we handled all of the above brands for over 5 years each, and a couple for nearly 9 years (counting Compaq/HP as one). We’re proud of our track record with all of them. What’s significant is that many of the client contacts who we worked with then are repeat clients today. We currently work with some incredible brands - Adobe, Alfred McAlpine, Casio, DLA Piper, Harvey Nash, Hyundai, Konica Minolta, LG, MTV, TDK and Virgin - which is by no means shabby.

TWL: So, turn of the century and you guys are rocking…PR Week Consultancy of the Year in 2000, £7.2m in fee income declared for 2001 in the ’02 PR Week Top 150, putting you in a heady 19th position and then – bang! – drops in the following years to £5.2m, £4.7m, £3.4m and then a slight recovery to £3.5m for 2005 in last year’s table. Tough times…ever felt like just jacking it all in?

C & M: Tough times indeed, but you have to look at the bigger picture – size isn’t everything. Running a successful business at any size is more important.

2000 was a great year for us and many other agencies too. We were at the peak of a 7 or 8 year market surge and dotcom boom, but on the crest of the crash. We got off pretty lightly considering. Other agencies went bust or were forced into fire sales for a pittance. Although we were one of the top dotcom agencies, it was luckily only 10% of revenue (90% of the effort though, as anyone who worked in the industry in those days will tell you!). The real fee hits came from working with clients like Enron, Andersen and HP (our largest client at the time), and other budgets generally halving. HP moved to a global agency strategy and took out £1.1m of business in one swoop, which hurt. But that was 2003 and is relegated to the archives.

Jacking it in? Never. We’re more resilient than that and have a slightly longer term perspective and vision. Our current mission is about quality and finding the right people in order to diversify and grow to 2000 scale.

TWL: In 2005, Mark, you had a fairly public spat with Check Point Software over its lack of payment (spot on too – name and shame, I say). Did you ever get the money?

M: Mutual professional respect is an important factor in client-agency relationships and we felt that being expected to fund the marketing of a multi-billion dollar listed company making huge profit margins was not a fair win-win business deal. We’re not a free banking service, so after six months when it reached six figures, we pulled the plug on their PR programme. And yes, we did get paid (a few months later!) so it was all settled fair and square back then without write-offs or lawyers. PR agencies need to become better business people if they want to become more professional and treated with respect.

TWL: OK, so last year’s PR Week Top 150 saw your fee income back on an upward trend – but then along came the Motorola loss. What will this year’s table show in terms of fee income? Up or down?

C & M: We're not entering the table this year and most people will see why. Motorola was our largest client, which meant a 20% hit on fee income, not to mention an emotional loss after 8.5 successful years. At least we only had one week ‘on the bench’ so to speak, as we finished Motorola in August and started working with competitor LG in September. Coinciding with a couple of clients being the subject of acquisition and another introducing a global agency strategy, this all put a slight dent in last year’s fee income. There seemed little point in specially re-auditing our accounts for the calendar cycle only to re-confirm publicly what is fairly obvious to anyone who reads PR Week (and TWL of course). All agencies should contingency plan for losing a major client and we did this prudently. Our business will have moved on significantly by the time the PR Week league table appears this Spring and covers events of nine months prior. We’re not hiding that income was down for 2006 over 2005 and if it weren't for Motorola we would have grown. It’s just that we’re focused on 2007 and beyond.

We may jump back in the PR Week league tables one day, but such tables don’t tell you much about the businesses behind the claimed figures and have been devalued somewhat by those hiding behind SarbOx. If TWL followers must know, we’ve had a great winter since Motorola and our current fee income is now only just below year ago levels, and we’re in profit. We’re still a great place to work (Sunday Times Best Small Companies No.3 in the UK this weekend) with the buzz and confidence to be recruiting at AD and AE levels and some great name clients and prospects to work on, so if you’re a happy team unhappy where you are…

TWL: Back in 2002 a bunch of your fellow directors tried to wrestle control of the company away from you. Well done for beating the treacherous bastards off, but when that happened, what was your overriding emotion…disappointment that people you’d employed and trusted would do such a thing or just overwhelming anger and a desire to break their kneecaps?

C & M: Betrayal and kneecaps? It was a difficult time and is ancient history. We’ve all moved on since. After a decade of success we were all hurting in 2002. We weren’t used to a rapid market decline and a shrinking fee base, so needed a new business strategy and a re-sized board. Everyone felt so passionately about Firefly but no-one really wanted to leave.

We learnt a lot about business and different people’s values. We also put our money where our mouths were and invested the cash. It took a long while to recover financially, with no outside help (no thanks to NatWest – we hope their blog monitoring is switched on!) and we personally didn’t draw salaries for three years. Most of all we’ve proved that we can build talented teams from scratch, shoulder risk and run a solid business. More recently we’ve managed to rebuild our senior management team and proved our resilience in rocky markets while maintaining a high profile reputation.

While some people choose to dwell on the past, we’re surprisingly very focused on the next five years.

TWL: What key lessons would you say you’ve learnt over the past few years?

C & M: Always have self-belief and a longer term vision that means something to everyone in the company

Surround yourselves with great people

Value trust and loyalty - from employees and clients

Appreciate what enormous efforts it takes to really engage and motivate the workforce

Dig deep, have faith and resilience

In this industry, only the future matters

…and lots more!

TWL: The two of you are married, right? I can’t think of a more senior husband/wife professional partnership, so you must be like the PR industry’s Posh & Becks. How the hell to you avoid talking shop every minute of every day, or have you given in and spend the evenings lying in bed running through PowerPoint presentations on your bedroom’s plasma?

C & M: Yes we’re married, but we’re not sure whether Posh & Becks is an improvement or a demotion on the usual Richard & Judy jibes! As for senior, you’re as old as you think you are and the people who surround you. There are other senior PR couples out there – Lansons, for example.

We actually have very different jobs at work and have different personalities, responsibilities, clients and skills. With three busy energetic kids under 10 there's little time for work chat at home and, as any parent will tell you, kids keep your feet on the ground (and also give you an unpaid part time job as a taxi driver). We have a rule of no computer screens above the ground floor and it applies to us as well as the kids. The old adage “if you want something done, give it to a busy person” definitely applies. We’re busy and are very involved in the daily (hourly) running of the business, we make the most of technology, and make the most of precious family holidays to escape the weekday frenzy.

TWL: Firefly’s nearly 20 years old now. You must be knackered. What does the future hold..?

C & M: Firefly will be 19 years old this autumn in fact, but we feel like we’ve recently rebuilt Firefly from the inside to be a much broader, interesting place. Surrounding ourselves with bright, sparky people helps keep our energy levels and motivation up. We’re proud of our client list and still feel we have loads of potential and many years to go. Our careers are important to us. It doesn't get much more exciting than launching a new business for Richard Branson aiming to open the minds of the nation and healthcare profession about the long term potential and benefits of stem cell banking, in the same month as crisis management consulting with a major corporate, devising online PR strategies for various people, launching a new range of dual-standard high def DVD players for LG, and working with MTV on its digital platforms.

Challenging consumer, b2b and corporate issues-based assignments like these are very motivating and where we score highly. We’re not actively packaging Firefly for sale and have set ourselves goals for growth, award-winning work and diversity. The immediate future holds more growth in pure b2b/corporate clients, representing the bigger and better brands in technology, winning more pure consumer brand assignments, stronger international ties, and the growth of our European offices so that we've got a stronger pan-European footing.

2007 is shaping up well from where we’re standing, as it should be for many others in the industry.

So there you have it...optimistic as ever. We're grateful for the time anyone takes in writing to little old TWL, and Claire and Mark invested quite a lot here...not only in the words, but that picture at the top came from them too.

We know that they're keen readers, so if the Q&A has sparked any qustions of your own, stick them in the comments and I'm sure they'll pop along to respond...


Anonymous said...

Hmm. I seem to remember that Firefly was famous for having annual birthday parties. Like that rag the INQUIRER. I'm still waiting for last year's fifth birthday party.

I was definitely at Firefly's first birthday party as well as many of the ones that followed. Maybe I got knocked off the invite list. Cough.

Anonymous said...

I was at Firefly's party in the autumn. Couldn't hear myself speak, which given the strength of the cocktails was probably a good thing.
No white suits.

Andrew Smith said...

"We may jump back in the PR Week league tables one day, but such tables don’t tell you much about the businesses behind the claimed figures and have been devalued somewhat by those hiding behind SarbOx."

Would Clarie and Mark agree that we need an alternative PR Week 150 - one that looks at more than just top line revenue. ie more meaningful financial and non-financial measures such as net worth. profitability, employee/customer satisfation?

Anonymous said...

Can't believe it's taken a decade for Mike Magee to realise he's been knocked off loads of agencies party lists!

Anonymous said...

For the PR Week Top 150 tables, you should either be in them completely or not at all.

PR Week should have a rule that if you don't enter because you don't want less than rosy results to appear print, you are subsequently frozen out for the next three years.

Would instantly stop agencies using it as a form of free publicity to shout about how well they are doing, rather than a realistic look at the state of the industry.

....the world's leading.... said...

Kind of agree about the in/out thing (in fact we had a dig at Lewis when it decided against appearing in last year's tables...) but PR Week league tables being "a realistic look at the state of the industry"? I'm not so sure.

As Andrew points out above, a league table based solely on fee income growth isn't necessarily a fair reflection of agency performance...after all, even the biggest agency could be making a loss.