PALO ALTO, April 2—KVO Public Relations, a unit of Fleishman-Hillard, and Citigate Cunningham are the big winners following a review of about $10-15 million of Sun Microsystems business. The biggest loser is Burson-Marsteller, which will see its six-year relationship with the network computing leader come to an end as Sun bucks the prevailing trend in technology PR, dividing up its public relations account at a time when most others are consolidating their business with a single global agency.
KVO, headquartered in Portland, has picked up the lion’s share of the business—believed to be worth around $4 million—including the software business. Cunningham, meanwhile, will handle corporate and international public relations, including corporate media relations and executive communications—valued at about a quarter of Sun’s total spending with PR agencies.
Other winners were the technology practice of Ogilvy Public Relations Worldwide, Alexander Ogilvy, which will handle customer, industry, and partner communications and where the account will be led by Hani Durzy; and Eastwick Communications, a Redwood City technology specialist that has worked with Sun in the past, and which will help the company with its enterprise business.
The other loser is Ketchum, which had been handling about $1 million worth of the company’s server business.
For Cunningham, the win vindicates a risky decision: when it realized it had a good shot at picking up the Sun account, the agency terminated its relationship with Hewlett-Packard, which would have been a conflict.
The firm will handle the international portion of the account through the Citigate Global Technology practice put together by parent company Incepta. Executives from the London and Hong Kong offices helped pitch the account, which is the first major win for the global practice since Incepta acquired Cunningham last fall.
“We will have some programs where we will work with other local agencies,” says Cunningham COO Joe Hamilton. “But for the most part we will work through our own network, using an extranet we have developed to stay on top of news and events in different markets. But the account will be spearheaded in the U.S.”
The account leader will be Joan Stone, a senior vice president and 11-year Cunningham veteran who has worked on Cisco and Motorola. She will report to Beth Pampaloni of Sun’s corporate PR department. Also playing a leading role on the account will be Karen Hodskins, also senior VP. Agency president Andy Cunningham will also be involved.
As for Burson-Marsteller, while executives admit the loss of Sun is a blow, the agency’s leadership expresses confidence in the tech practice as a whole. “We’re very positive about our technology practice,” says agency president Chris Komisarjevsky. “We have been picking up quite a bit of new business in that area and in other areas.”
B-M had about 40 staffers working on the Sun account, and most of those will be reassigned to other accounts within the agency, Komisarjevsky says. Pat Riley, who headed the account, is already working on the Xerox business and on a “confidential crisis assignment.” According to B-M technology practice leader Heidi Sinclair, “We had great people working on the account, so it has been easy to reassign them elsewhere.”
She says the firm has brought in several major pieces of business in the past six months, including Peregrine Systems, a San Diego-based help desk software company that also works with B-M sister companies Landor Associates and Marsteller Advertising; telecom company Switch & Data; Fujitsu for its application server software; and two other project clients that may turn into longer-term relationship. They join major clients such as Qualcomm, Accenture, 3Com, and Alcatel.
“We have added $6 million in new business in the first three months of 2001,” says Sinclair, who nevertheless admits that the loss of the Sun business hurts. “We have been climbing steadily in the first part of the year. This loss means the hill is a little steeper.”
Sinclair brought in the Sun business six and half years ago and worked on the account for two years before leaving Burson—she returned late last year. “Sun’s value has risen 1000 percent since we started working with them,” she says. “In that time, Sun went from being a workstation vendor to repositioning itself as a major player in network computing and in the network enterprise business. We helped them launch Java, one of the most talked-about technologies of recent years.
“It’s a great disappointment, because we did great work for them and we had very good relationships with our clients inside the company.”