Catapult convincing tech firms value of good PR

BOULDER — During the past two years, many high-tech companies have cut back spending on such extras as advertising to remain profitable. In light of these cutbacks, however, some companies continue to consider one form of marketing as a necessity, and a Boulder-based public relations firm is benefiting from this perception.

This fall, Catapult PR-IR, a public and investor relations firm specializing in technology companies, marked its fourth profitable year since its inception in 1999. Although revenue has dipped to $750,000 for 2003 from a high of $913,000 in 2001, co-founders Guy Murrel and Terri Douglas have been able to keep the company operating in the black by remaining small and focused.

“We never tried to grow too quickly,” Murrel said. “Some other firms were too ambitious during the high-tech heyday.”

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Murrel and Douglas merged their independent firms to form Catapult in 1999. Backed by five existing clients, first-year revenue totaled $600,000. During its second year, Catapult grew to $800,000 in revenue and four full-time employees. In 2001, the firm ballooned to a staff of seven before decreasing to five employees in 2003.

Weathering difficult economic conditions, Murrel and Douglas have seen high-tech companies pull back on advertising and trade shows but agreed that public relations has fared better than other forms of marketing. A trend that Murrel, said, in part, was because regardless of market conditions, “people still need to be able to tell their stories and get news out about their company.”

With technology — perhaps more so than any other industry — public relations can play a pivotal role in a company’s success, they said. A company’s ability to gain third-party reviews of products and services and exposure to potential users is critical, Douglas added, as today’s consumers are more prone to scrutinize claims and companies remain cautious about investing.

“Results (from public relations campaigns) aren’t measured just in terms of sales leads per se,” she said. “Sales leads can take six to 12 months to develop. And if people don’t know a company, it can take even longer.”

Through public relations, Catapult works with clients to achieve set objectives such as developing top-tier relationships with analysts and editors or positioning the company as a leader in terms of meeting customer needs. Yet, as high-tech publications have decreased in page numbers, the challenge of acquiring coverage for clients has become increasingly tricky.

“You look at high-tech trade publications, and they are very thin due to the pullback in advertising,” Murrel said. “There are less publications to get coverage in. Computerworld and InformationWeek are a fraction of their traditional size. They have less space for editorial so we have to work harder for clients to get placements, and we must develop solid relationships with editors and analysts to provide credibility for our clients.”

To date, Catapult has six clients, including local company Breakthrough Systems of Layfayette. Other clients include Sonic Foundry, Delphi Technologies, Connexn, Sybase and Colorado CustomWare.

Douglas and Murrel contend their results-based approach toward public relations sets them apart from other firms.

For a previous local client, Benchmark Storage Innovations of Boulder, for example, Catapult conducted an audit of industry analysts and editors to identify market perceptions about the company. After launching an awareness campaign, Catapult surveyed again and found that Benchmark had become considered a leader and a viable contender for gaining market share. They believe this perception shift helped make Quantum Corp. of San Jose, Calif. consider acquiring Benchmark — a deal that was completed in late 2002.

“We often conduct analysis up front so we can understand perceptions that the client is encountering,” Douglas said. “We then help shape and mold messages through press releases, article development, and speaking development and survey again six to 12 months later to see if we are moving the perception needle.”

Although Catapult’s revenue has remained static from 2002 to 2003, Douglas said they hope to expand with two to three more clients over the next year, and acquire staff accordingly. For retainer clients, Catapult seeks to maintain about a one-to-one ratio.

“In the next couple years, we hope to have 10 to 12 people on staff to handle a growing number of clients. That will be as big as we want to get. We want to remain smaller and focused,” Douglas explained.

In recent months, the increased activity in technology spells good news for Catapult, as Murrel said they see more high-tech companies interested in marketing as well.

“There is only so much cutting of expenses that companies can do,´ said Murrel about the trend among high-tech consumers. “A lot of companies need to support their infrastructure and find ways to increase efficiencies, which will drive the need for technology and will drive more success on the part of our clients.”