Magazine article Marketing

Financial PR Deals with Times of Crisis: As an Economic Slowdown Looms Large, Financial Firms Are Relying on PR Agencies to Smooth over Troubled Times. (Public Relations)

Magazine article Marketing

Financial PR Deals with Times of Crisis: As an Economic Slowdown Looms Large, Financial Firms Are Relying on PR Agencies to Smooth over Troubled Times. (Public Relations)

Article excerpt

While many still struggle to comprehend the human cost of the terrorist attacks on the US, September 11 also marked a black day for the financial markets. With billions of pounds wiped off the FTSE 100 Index overnight, London's financial PR communitywas left stunned.

Barclay's Stockbrokers decided to cease all media comment for the first 24 hours after the attacks. "It was not just the scale of the disaster and the confusion. We felt there was no appropriate comment we could make. It was not until the Wednesday morning that we were prepared to speak to the media," says Hilary Cook, director of investment strategy for the financial services provider.

Some of the shine had already gone from the City before the events in the US. With economic downturn in the air, inevitably the number of share offerings, mergers and acquisitions had fallen throughout 2001.

But the US tragedy and the resultant threat of global warfare had small investors panic-selling, while the big players slammed the brakes on their top-end deals.

In the immediate aftermath, Fidelity Investments, which manages [pound sterling]l6bn of private savings in the UK, made concerted efforts to encourage institutional and retail customers to think long term. On the telephone, in prepared statements, customer letters and ads, the fund managers drew parallels with the Gulf War and produced diagrams showing how the financial markets survive global wars.

"We took a careful tone, as we didn't want to assume that everyone was simply thinking about their money. But we didn't want people to overreact and wreck their long-term future by selling out, going to cash and sticking it under the bed," says Paul Kafka, Fidelity's executive director in charge of corporate communications.

But while the markets have now steadied, many feel financial PR is a changed world.

Relying on technology

With some analysts, investors and journalists nervous of stepping onto an aircraft or into tall buildings such as Canary Wharf, the events have accelerated the financial PR sector's adoption of web-based communications. For example, companies such as Orange and British Airways, are providing simultaneous webcasts and real-time information on their investor relations web sites.

The US tragedy has also brought communications issues to the fore, including those of corporate responsibility and corporate governance. "If you look at firms that had problems with mismanagement before September 11, once economic difficulties kicked in, everything happened much faster," says Stephen Benzikie, director of financial communications at Edelman PR Worldwide.

Certainly, some in the airline industry were swift to crumble and troubled telecoms equipment giant Marconi plunged from disastrous to worse, following the September crisis in the markets.

Indeed, Marconi provided a salutary lesson on how to get financial PR completely wrong. With a baffling saga of false confidence, suspended shares, ill-timed profit warnings and management departures, Marconi squandered shareholder value from 1250p in 2000, to below 29p come September 6, 2001.

International PR networks gamely suggest they are riding out this economic storm by looking beyond financial calendar management and chief executive positioning. But cutbacks in the City have also been matched by a large number of redundancies Even Brunswick, which according to online merger and acquisition intelligence tool, tops the City PR cross-border deals rankings for EMEA, recently axed five client-facing employees. …

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