Founded in 1976, Middleberg & Associates (now, following its acquisition by Havas, Middleberg Euro RSCG) had grown to about 20 people and $2 million in fees by its 20th anniversary. Over the next five years, however, Middleberg was the fastest growing public relations firm in the United States, and after another year of dramatic growth in 2000—up 90 percent—the firm broke through the $20 million barrier for the first time, established as the undisputed public relations leader of the dot-com revolution. New business successes included top-of-the-line dot-coms such as Hoover’s Online, Kozmo.com, IPO.com, and Britannica.com, and the online ventures of blue-chip brands including PricewaterhouseCoopers, United Airlines, HBO, and Reuters.
Middleberg doesn’t have the blanket coverage of the other major agencies, but it does have significant presence in the three major Internet capitals: New York, San Francisco, and Boston. The New York headquarters office is clearly its strongest, but the other two offices have strong leadership: the firm seconded Jenny Lee from New York to head its new Boston office and added Lisa Rhorer Schmidt, formerly, of Oracle as director of online marketing in San Francisco and Justin Chernow, most recently with GCI Group, as director of its new media group. With its cutting-edge Internet technology, Middleberg is confident it can serve clients anywhere in the country.
Its acquisition by French advertising giant Havas ought to give Middleberg easy access to European markets: the Euro RSCG network, of which Middleberg is a part, has offices in 25 countries and is ranked number three in Europe, including Biss Lancaster in the U.K. But Havas has always been more of a loose confederation of agencies than a cohesive global offering, so it remains to be seen how much of an advantage Middleberg will reap from its new ownership. In the meantime, the firm has been focusing its own attention on Latin America, adding clients such as Mercado Libre and Devorame.com.
While Middleberg is focused primarily on the Internet, the fact that almost every major corporation in America has an Internet presence (or is using the Internet as a communications medium) means the firm represents clients from a wide spectrum of industries in a wide range of practice areas. It has impressive technology, entertainment and healthcare portfolios, for example, and a healthy investor relations practice that handled a dozen IPOs last year. The acquisition of Hayes & Associates strengthened the firm’s online marketing division, and the launch of Middleberg 1.2.1 gave it a unique direct marketing capability. Other specialist services include crisis and issues management—counseling clients on the right way to respond to rogue websites and Internet rumors—as well as online marketing and media relations. The “competitive strategies” group provides online image and issues research, competitive analysis, and benchmarking; while the online marketing practice offers online community building, viral marketing, e-mail campaigns, and online contests and sweepstakes.
One is immediately struck by the youth of Middleberg’s senior management team, which (with the exception of Don Middleberg himself) consists of individuals who have come of age in the Internet era: chief client services offer Bethany Sherman, a seven-year veteran of the agency; creative director Curtis Hougland, who joined three years ago from Ruder Finn; group director Neil Vineberg, formerly of Golin/Harris; managing director of competitive strategies Amy Jackson. Key hires last year included Jim Lombard, who joined the 1.2.1 group from Influence in St. Louis; Brodeur’s Barbara Kohn, who joined the San Francisco office; and Rosemary Ostmann as director of the technology group. The only significant loss was Robert Argento, who left for a digital media firm.
In Middleberg’s milieu, speed of response is the critical difference between success and failure, so the agency’s culture stresses entrepreneurship and flexibility, the ability to provide strategic planning and implementation simultaneously, and the need for brands to be adaptive—the make subtle changes in their positioning and messaging as the environment shifts. The other significant distinguishing characteristic is an unusually flat structure, with each of five principals reporting for president Don Middleberg.
In 1994, when most public relations professionals took the Internet only slightly more seriously than CB radio, Don Middleberg was sitting down with a journalism professor at Columbia University to conduct the first serious study of the ways in which journalists were using new media. That study, repeated annually since, has established Middleberg & Associates as the thought leader in new media. Other efforts position the agency as a player in the Internet age, rather than a spectator: its involvement in New York Governor George Pataki’s task force on the digital economy, its network of venture capital, analysts, academic and assorted digerati partners. And late in 2000, Middleberg published his book, Winning PR in the Wired World, which quickly established itself among Amazon’s public relations best-sellers.
Middleberg’s clients include some of the hottest (and most solid) Internet businesses, such as Kozmo.com, e-businesses such as Britannica.com and Hoovers Online, and the online ventures of some blue-chip brands, from American Express to The Walt Disney Company to IBM to United Airlines to Bristol Myers-Squibb. Middleberg & Associates was tapped two years ago to raise awareness for Britannica.com, a new Web portal site from the publisher of the eponymous encyclopedia. The agency developed a distinctive positioning, identified industry issues and helped Brtiannica take ownership of them, and promoted the site as an online meeting place for smart people. (It also helped handle a potential crisis, when too much traffic crashed the site soon after launch.) Using its hybrid of media relations and online marketing, Middleberg helped the site attract 12 million visitors in a single day. The firm was also assigned to promote CVS as the first truly integrated online and offline pharmacy.
Middleberg has done an outstanding job of establishing its name as synonymous with the Internet revolution. Middleberg himself is a tireless marketer on the firm’s behalf—using the Media in Cyberspace research for publicity process and authoring his own book on how the Internet changed the public relations world. But the decision to add the Euro RSCG brand was puzzling—the equivalent to a U.S. holding company buying one of the top independent PR firms in Paris and then insisting that it add “American” to its name.
Middleberg was able to ride the dot-com boom to phenomenal success, achieving impressive growth and an enviable market position. It remains to be seen what the dot-com bust will mean, but it seems unlikely that the agency will be able to duplicate the phenomenal performance of the past three years over the course of its earn-out from Havas. Of course, the acquisition gives it new strengths, and access to capital to make more acquisitions, so it may continue its expansion by other means. The key to the future is whether Havas is able to leverage Middleberg’s expertise across its network, capitalizing on its unique strengths and feeding business from other agencies.