I attended a breakfast seminar in the City yesterday morning to hear a review of the technology, media and telecoms M&A market, held by legal firm Field Fisher Waterhouse and Mantra PR-client Cobalt Corporate Finance.

Economist George King from Alliance Bernstein presented an upbeat view of the markets. He said that we’re still seeing more negative data than positive but believed that fundamentals are improving. He did, however, warn that we’re not at the bottom of the market yet.

King told the audience that investors had two possible responses: walk away; or lean into the market and take advantage of cheap asset prices.

I’m making my own personal bid to take advantage of the upturn with my £1k FTSE 100 confidence project. But here’s the issue: cash (or debt) is in short supply and so any investment at this stage in the market must be made from reserves.

There are lots of comparisons to be made between personal finance in a downturn and business investment. Market uncertainly and piss poor sentiment means that you want to hold onto your cash if you’re fortunate to have built up savings or reserves and aren’t willing to risk investing in a market that may have further to fall.

M&A in the short term has stalled. But it’s not all doom and gloom. IS Research’s Ian Spence, techMARK analyst of the year, cited plenty of opportunities for M&A, listing netbooks, IPTV and femtocell.

Cobalt’s Chris Williams added cleantech to the list while Field Fisher Waterhouse’s Neil Fisher said that the spectrum auction sales at the end of the year would create opportunity in the longer term.

Williams said that while there is a reduction in M&A activity, there will always be some.

“Unique IP, whether content or technology, will always be attractive to big corporations and I expect to see those deals continue largely unaffected by the market.

“We will inevitably see some young businesses run out of funding and the collapse of some mature businesses with weak propositions – the recession just speeds up the inevitable (just look at the collapse of businesses like Woolworths in retail)…….but that will leave the survivors in a stronger position for the recovery.”

And the prognosis for M&A in the TMT sectors? I’ll leave the last word to Williams:

“Lack of cash and debt will hold back the recovery in M&A but even then I suspect that in the second half of 2009 prices will stabilise and we could start to see defensive consolidation of good businesses in non-cash deals.”

Tags: cobalt, m&a, media, tech, telecoms, TMT

Twitter has suddenly got very busy. A bunch of celebs have signed-up and are generating huge amounts of attention that’s edging the micro-blogging platform into the mainstream.

It’s the offline PR tactic of the moment. How long before a national or celeb magazine starts publishing a list of celeb Tweets? In fact its probably already been done.

It’s an issue that I discussed with pals on Twitter this morning and tonight at the London Bloggers meet-up tonight.

Jonathan Hopkins (@jopkins) captured the mood.

Gary Andrews (@garyandrews) at the London Bloggers meet-up tonight said it’s like your favourite pub has been invaded by a bunch of trendy types and you’re trying to work out whether you should try and fit in or move on.

We’re all here to stay of course, but it’ll be interesting to see whether this is a step change for Twitter or if it will settle down after this burst of interest. My missus is yet to be convinced.

Tags: Twitter

Tonight as I passed through Newcastle on my weekly commute down to London, the local media was alive with news of plans to turn old shipyards on the Tyne into manufacturing yards to build massive offshore wind turbines.

That the news came on the same day that Corus announced the prospect of redundancies at its steel plants throughout the UK including the North East acts as a case study for the need to re-skill and recalibrate during periods of economic turmoil.

Last week Geordie cheerleader and entrepreneur Charlie Hoult noted on his blog that the high tide of economic prosperity has always reached Newcastle last and gone out first. The demise of local bank Northern Rock in September 2007 was a lousy omen.

But economic downturns and re-skilling are life experiences in which Geordies are well-versed.

When Adam Hart-Davis visited Newcastle for his upcoming programme on Sky’s History Channel (16 February) he said it was a fighting city of invention and reinvention. It’s the birthplace of the light bulb, cheap electricity, and the fastest ships in the world.

Today its wind turbines and a thriving digital community. UK Maker Faire, a practical celebration of science and invention arrives 14 to 15 March and Thinking Digital, billed as the British version of TED takes place on 14 to 15 May.

As Hoult says:

Newcastle is reinventing itself as a world city – an Ideopolis – with embedded university, airport to anywhere… still the joie de vivre of a port town with sunny weather (remember the Romans didn’t settle Manchester because it rained too much!)

Tags: charliehoult, digital, geordie, newcastle, northeast, windturbine

As CEO of RealWire, Adam Parker has built a very efficient delivery mechanism for the distribution of content from PR agencies. He’s an ex-PricewaterhouseCoopers chartered accountant and management consultant and has spent a good deal of time and effort scrutinising the make-up of the PR industry and its business model in a bid to better sell RealWire’s services as an outsourced offering.

We caught up for breakfast in Newcastle on Friday where he talked about business models, profitability and his efforts to sell to the industry. PR Week would do well to hire his skills to scrutinise its Top 150 League Table and better explore the fundamental economics of the industry.

Q. You wrote nearly 1000 words last week on how the PR industry needs to become more efficient and therefore better recession proof. Give me your pitch in a 100 words.
A. I can do it in less. In my experience other consultancy businesses such as accountants or management consultants have profits of circa 30 per cent or more. My research indicates that profits in the UK PR industry are substantially less. Yet these are the people dealing with the reputations of organisations. I think one key reason for this is that many of the functions in a PR consultancy are very admin based. They tie up valuable resource (people) when they could be automated or outsourced.

Q. Can you give me some examples?
A. I’ve spent the last three years learning about the PR industry. But in fact you don’t have to look too hard to find examples. Press release approvals could be automated using a project management platform such as Huddle. Clippings whether online or print should be delivered electronically and analytics included as standard. And of course press release distribution and coverage tracking can be outsourced to a company such as RealWire.

Q. But don’t PR consultancies outsource some functions such as press clippings, media databases and wire distribution?
A. I think there is an important distinction to make between utilising bought-in services to supplement activity and actually outsourcing delivery of particular processes and results. PR consultancies usually buy in the services you’ve mentioned as an incremental cost. For example the use of a media database can help to improve productivity of a member of staff; however the delivery of the service is still wholly the responsibility of the consultancy. In an outsourced situation this becomes effectively a partnership to deliver that element of the service.

Q. So if PR consultancies adopt RealWire they no longer need account executives?
A. No I don’t think that is the case. I think account executives should be doing work that is more valuable for both the client, and hence the consultancy, such as creating and developing relationships on behalf of clients. Would this not be more motivating and productive than photocopying press clippings, putting together clipping reports or cut and pasting press lists? A recent survey of PR consultancy staff by Aurum cited the top three reasons for job dissatisfaction as repetition, long working hours and admin.

Q. Have you any examples of agencies that are taking your medicine?
A. I don’t really want to go into detail and name names but the desk research that I have done on the PR Week Top 150 shows that there are clearly agencies that are more profitable than others. My guess would be that these agencies either have a lower cost base than average, high utilisation or low over servicing levels through tackling the very admin monster I’ve described.

Q. What’s your prognosis for the industry?
A. My recent analysis was on PR Week’s data for 2007. You can only assume that 2008 was tougher and that 2009 will be tougher still. I don’t need to tell you what the prognosis is for the industry; you and Andrew Smith have both covered this topic on your blogs. In the current economic climate PR consultancies, particularly those where margins are slim, will unfortunately be challenged by a combination of client losses, budget reductions and bad debt.

Q. How does RealWire deliver a cost-effective service profitably?
A. By striving to always find ways to be better in our specific area of expertise. The team has sought to develop efficient processes to optimise and distribute releases to relevant recipients, and then track and evaluate the coverage generated. We have invested heavily in both the technology to automate significant elements of the process, and at the same time in gaining an understanding of both the interests, and readership, of the publications and communities that we distribute to. We have done all this whilst maintaining a human approach in all we do and of course we’re based outside London and so benefit from a lower cost base.

Tags: adamparker, consultancy, profit, pr, realwire

There’s much discussion on the in blogosphere today over whether Jonathan Ross’ conversation last night with Stephen Fry about Twitter on BBC1 has tipped the micro blogging platform into the mainstream.

I measure the take-up of a technology against individuals I know and their place on the technology adoption lifecycle model developed in the 1950s.

The model splits consumers up into five groups: innovators, early adopters, early majority, late majority and laggards. I’ve long mapped myself, family and friends against these categories. Its an approach has worked for any number of technology innovations such as PCs, mobile phones, instant messaging and MP3 players. Here’s how it stacks up for Twitter.

• I’m an innovator or early adopter always keen to experiment with a new technology. I’ll play with its and don’t always expect it to work. I was slow to Twitter but usually I’m one of the first people to try out new products or applications.

• My mate and business partner Steve Earl is somewhere between the early adopter and the early majority. He’ll start to use a technology when its proposition is well defined and its value is established. He expects it to work and the engagement model must be well defined. Steve the market constituency that Geoffrey Moore wrote about in Crossing the Chasm. Convince Steve of the value of a technology and the chances are it will make it into the mainstream. In the case of Twitter, the technology life cycle model is holding up. Steve (@mynameisearl) has started using it but still questions its value in a business context.

• My wife is in the late majority. A technology must reaching maturing before she’ll buy. Form and function have equal importance. For example, she bought an iPod when the Mini was launched in pink. Twitter will almost certainly need to be integrated into other products that she uses before she’ll sign up.

• My brother is unquestionably a laggard. I can’t ever imagine him ever using Twitter. But then he rarely uses a PC and only occasionally turns his mobile phone on when he wants to make a phone call. Maybe if Twitter is built into an IPTV platform five years hence as a backchannel.

There’s plenty of other people I could add and likewise I’m sure you could plot family and friend onto the model. Its a neat way of quickly building insights into a product and starting to understand the types of PR and marketing messages required to move a product to the next constituency along the model.

Related stories:

Jonathan Ross comeback lights up Twitter – Neville Hobson
There goes the neighbourhood….. – Broadstuff
The Brits bring down Twitter for the first time. Mainstream media coverage glut surprises the tech geeks – Drew Benvie
Fry and Ross Twitter on TV – Staniforth

Tags: jonathanross, lifecycle, stephenfry, twitter

Shout out to Rainier PR’s Bryony Beynon who has teamed up with a pal to guest edit DollyMix, the Shiny Media blog for smart women (tagline: the ultimate women’s super blog, thought candy for your ladybrains).

Bryony has form. She guest edited my blog when I was on holiday last summer, resulting in a massive burst of traffic and comments for her post on the Welsh cym domain (its all in the pronunciation). She’s got another week at DollyMix so get your pitches over to her now. Her regular blog is Sceptred Youth.

Tags: bryonybeynon, dollymix, sceptredyouth

Here’s a great piece of work and a cracking example of how to present the results of a campaign from the corporate team at sister agency Mantra PR.

Race to the Top is a report by Sandra Kerr, National Director of the Race for Opportunity campaign, Business in the Community examining the lack of board representation by ethnic minorities in UK business.

Tags: BITC, campaign, mantrapr

There are always opportunities whatever the state of the economy. You don’t have to look too hard to find businesses that are performing well despite the downturn. Here are a handful of headlines that I’ve spotted in the last couple of weeks.

UK tourism
Overseas visitors to the UK are enjoying the benefit of a week pound resulting in London and the UK countryside becoming a tourism hotspot – Germans snap up UK cottage breaks as pound weakens

Meanwhile for Brits locations such as Cornwall, Lake District, London, Northumberland, Pembrokeshire, Scotland are the holiday hotspots for Brits in 2009 – UK holidays…the new attraction for hard-up Britons and 30% rise in hostel bookings

Pasties and pizzas
Pasties and pizzas are in and high priced coffee shops are out. Greggs reported growth last month – Domino’s and Greggs line up higher profits

Cinemas
Consumers are seeking to escape from the economic woe by heading to the movies. The sex industry is reporting an upturn in fortunes for the same reason – UK cinemas dodge recession

Flat screen TVs and home entertainment systems
Big TVs were one of the highlights of the Consumer Electronics Show earlier in the month. Consumers are investing in home entertainment systems as staying in becomes the new going out – TV sales boost for John Lewis

Alternative sources of debt
Social lending networks are enabling lenders to get a greater return than they’d get from a savings account and pawn brokers are enjoying a resurgence. Zopa has just reported a record month and there’s still a week to go – Perfect market for social lending networks?

Own brands and budget supermarkets
Obvious one this; consumers are trading down to supermarket own-brands and value retailers in a bid to save cost – New supermarket price war

DIY
People are doing up their houses and fixing their cars rather than moving house or buying new cars – Halfords reveals rise in sales

I’m on a mission to find growth markets in the private sector despite the economy. Any more examples?

Tag: economy, growth

There’s doom and gloom everywhere in the financial markets. It could almost get you down.

I’ve got into trouble several times for predicting the bottom of the UK market. Back in November after I spotted that the FTSE had started to fluctuate around a mean of 4,200. And again earlier this month. Almost three months on its still doing exactly the same. Today the market closed at 4,091. If this is the recovery it’s long, snakey and W-shaped.

On Monday the Government chipped in a load more of our cash to underwrite the banking markets in the UK. Some banking shares crashed and rightly so given that they are now more or less government institutions. But the UK market has held its position.

There is a very real recalibration taking place across the economy. Some very good people are losing their jobs and we are days away from the Government officially calling a recession (two quarters of negative growth). But how much more bad news will it take for the equity markets to fall further?

The last three months has seen companies go bust, miss their guidance, go backwards and make losses. We are surely at a stage where the market is saturated with gloom and has priced it into the value of shares.

The question is when will we see an upturn? No one has experienced a market like this and has the knowledge or experience to make a call. The best we can do is look to historical trends which at this stage provide little insight. For the time being the doom mongers are on a roll feeding the downward trend.

I’ve had enough of this blogging conjecture. This isn’t Armageddon. Normal business will recover. As a personal show of confidence I’m going to invest £1,000 in a FTSE tracker and report on its performance from time to time. At the end of the year I’ll invite all the doomsayers for a drink in London on the proceeds of any profit that I make.

Of course I could lose some money. Maybe in the short term I will, but in the medium to long term I doubt it. And if I do people will be too preoccupied with their own concerns and are likely to have a lot more to worry about than postings on my blog.

Tags: equity, FTSE, investment, market, turnaround

Here’s an old picture postcard of Oxford Street, London, close to Rainier PR’s offices. I found it an antiques fair over the Christmas break. I’m sending it virtually to all the people that have been good enough to link in to me over the last month or so.

Shout out to: 10Yetis, Adam Lewis, Andrei Chirica, Armand David, Brendan Cooper, Ged Carroll, Giles Shorthouse, Iain Johnston, James Gordon-MacIntosh, Jane Smith, Jed Hallam, Liberate Media, Paul Fabretti, Richard Bagnall, Tim Hoang and Will Sturgeon. Your attention and conversation is appreciated.

Tag: links, picturepostcard