Wow, You Guys are Still Around? Bringing N2H2Back to Life
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Wow, You Guys are Still Around? Bringing N2H2Back to Life

N2H2 suffered from a series of negative national news stories, a disastrous advertising campaign, the firing of several senior-level executives, and year long delay on the roll-out of its initial enterprise filtering product.

Paul Holmes

N2H2 was flying high in December 1999 until the company¡¦s stock and reputation began a steady decline that ended with a price of $.23 per share and a colossal business mess. While the dollars shrank, N2H2 suffered from a series of negative national news stories, a disastrous advertising campaign, the firing of several senior-level executives, and year long delay on the roll-out of its initial enterprise filtering product.

Plus N2H2 received the dreaded delisting letter from NASDAQ. If N2H2¡¦s share price didn¡¦t reach the minimum trading requirements, the company would be kicked off the exchange, an event that would severely jeopardize the company¡¦s future.

N2H2, known for providing Internet filtering to students, was trying to expand into the estimated $682 million enterprise filtering market to diversify its business model and become a more attractive investment.

With no recognition beyond the education market, Text 100 launched an aggressive enterprise rollout campaign to generate awareness around the N2H2 and its plans. Text 100 was able to bring N2H2 back from near death by highlighting the company¡¦s expansion into the lucrative enterprise market to introduce the company to the business community.

Throughout the course of the campaign, Text 100 fought to keep PR on N2H2¡¦s constantly scrutinized budget, working to communicate the power of PR to the decision makers. Armed with little more than tenacity, the team at Text 100 revitalized N2H2¡¦s reputation and delivered amazing results for the company.

Challenges

2001 was a difficult year, but N2H2 had problems that went far beyond a depressed economy, a deflated stock price and an initial lack of enterprise products and customers. The company had repeatedly stumbled in 2001, making a series of business bungles that amounted to an uphill battle for Text 100:
¡P ƒnFor Q1 2001, the company lost $10.9 million on revenue of just $2.5 million, making it impossible to convince the business and technology press that N2H2 had any long-term business viability.
¡P ƒnStock price as low as 23 cents a share further hindering Text 100¡¦s attempts to prove viability
¡P ƒnThrough four rounds of lay-offs, N2H2 slashed its staff from 400 employees to just 115 over a ten-month period - while still trying to claim market leadership
¡P The company¡¦s entire senior management team was replaced by May 2001, including both founders, CEO, CTO, CFO, VP of Sales, and VP or Marketing
¡P Text 100¡¦s PR contact at N2H2 changed seven times!
¡P ƒnA series of bad business decisions, resulting in costly damage control campaigns, did nothing to advance the company¡¦s business objectives
¡P No recognition outside the education press community - Text 100 had to introduce the company to the analyst, business and technology press community with little to stand on
¡P ƒnCorporate messaging was not reflective of actual business, sending audiences mixed messages
¡P ƒnN2H2¡¦s filtering product was often mislabeled or compared with the wrong competitors, confusing audiences and potential customers
¡P Lack of a legitimate enterprise filtering product to compete in the $682 million corporate filtering market meant that Text 100 had little to move forward with
¡P Few available customer references to speak to service provided in the corporate market

Research

Review existing analyst/media coverage of N2H2 to understand messaging/perception
N2H2 too narrowly defined as educational filtering provider ¡V needed to expand scope of work to include corporate and home/ISP filtering in order to compete with major filtering companies such as Websense and Surf Control.

Identify and analyze publications and writers interested in enterprise products to identify story angle opportunities

Product interest in server based filtering technology applicable for any existing corporate infrastructure, therefore awareness for N2H2 could be built around a corporate filtering product.

Understand successful repositioning tactics:
Text 100 could use N2H2¡¦s education filtering experience as a proof point for filtering success.

Understand successful corporate image tactics:
Text 100 needed to communicate future plans regarding expansion of filtering service model.

Strategy & Planning

Text 100 recommended an aggressive campaign based on one simple objective: to create a general awareness of N2H2 in the business community through any means necessary.

In short, the strategy was to deliver against a three-step plan to demonstrate to all key audiences that N2H2 was alive and kicking.

Step One: Prove to industry analysts and business press that N2H2¡¦s education filtering experience would allow the company to broaden its business to include enterprise and ISP filtering
ƒnGoal: Three analyst briefings and six pieces of coverage in the national business press

Step Two: Convince the technology press that N2H2 was a legitimate corporate filtering provider via the launch of an enterprise filtering product
Goal: Six pieces of coverage in national technology press and launch N2H2 filtering products

Step Three: demonstrate to the local/national press that N2H2 had made significant internal changes to merit a repositioning of the company
Goal: Conduct EO briefings regarding company changes and announce positive Q4 earnings

Execution/Tactics

The team had little time to save N2H2¡¦s reputation and faced a constant stream of challenges. To keep the program running as smoothly as possible, Text 100 adopted a tightly focused PR program to generate broad-based recognition of the company and its new product direction. The team followed the PR strategy closely, ensuring every action fit perfectly into the three-step plan. Activities included a constant stream of updates to the analyst community, the local press, and the national business and technology press. Text 100 ensured that all key audiences were kept abreast of the developments at N2H2 including the launch of two N2H2 filtering products catapulting them into the lucrative enterprise filtering market, management operations changes to strengthen the company and partnership announcements to demonstrate the company¡¦s strategic relationships; all of which added up to the promise of a viable revenue stream.

Evaluation of Success

Text 100 was able to bring N2H2 back from near dead after the company had all but been written off by analysts and the press. The reputation campaign not only proved that N2H2 was still in business, but also demonstrated that N2H2 had the experience, business strategy and determination to succeed in any economy.

Goal: Secure three analyst briefings and six pieces of coverage in the national business press to prove to industry analysts and business press that N2H2 had the filtering experience to succeed.
Result: Text 100 was able to communicate N2H2¡¦s business stability to analysts and the business press via briefings with five top industry analyst firms including IDC, Gartner and Frost & Sullivan and meetings with key national media outlets, resulting in coverage in Wall Street Journal, New York Times, Los Angeles Times, Dow Jones among others, plus feature broadcast coverage on Fox News and CNN. 

Goal: Secure six pieces of coverage in national technology coverage and launch N2H2 filtering products to demonstrate to the technology press that N2H2 was a legitimate corporate filtering provider.
Results: Meetings with the top-tier technology press allowed the N2H2 team to communicate how education filtering translated into enterprise filtering experience. Coverage appeared in Information Week, and Wired among others. The launch of two N2H2 filtering products via a virtual tour and the fact that N2H2 was the only filtering provider hosted at the Microsoft booth for at The National Information and Security Conference brought about more than ten press meetings.

Goal: Announce positive Q4 earnings and expansion plans plus conduct CEO briefings regarding company changes to prove that the necessary changes had been made to warrant a reputation turnaround.
Results: CEO briefings with the top three local publications and more than nine pieces of
feature coverage in the local publications proved that the local press had changed their opinion of the company.

International expansion, partnership and positive earnings announcements all were picked up by the press and proved that N2H2 had turned themselves around.

 

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