Waggener Edstrom

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Waggener Edstrom

3 Centerpointe Drive, Suite 300
Lake Oswego, Oregon 97035
U.S.A.
Telephone: (503) 443-7000
Fax: (503) 443-7001
Web site: http://www.wagged.com

Private Company
Incorporated: 1983 as The Waggener Group
Employees: 454
Sales: $57.2 million (2000)
NAIC: 54182 Public Relations Agencies

Waggener Edstrom is one of the world’s leading strategic public relations agencies, specializing in offering high-tech clients public relations services, including brand development, corporate communications, media relations, and consulting. Its interactive services group provides web site design and CD-ROM publishing. The agency, one of the Portland area’s first generation of homegrown high-tech public relations firms, has offices in Oregon, Washington, California, and Texas, as well as one in Heidelberg, Germany, and another in London. Its clients have included Amazon.com, Microsoft, GTE Super-pages, and SAP—entrepreneurs who create computers and software, and high-growth scientific companies on the cutting edge of computer, medical, and research technology.

Company Origins

Waggener Edstrom’s story begins in the mid-1970s at Tektronix Inc. At the time, Regis McKenna handled public relations for most of the high-tech firms in the United States. It was at Tektronix that Melissa Waggener and Pam Edstrom became acquainted while working in the marketing and public relations department. Pam Edstrom was director of public relations at Tektronix for Microsoft. Waggener, then 30, had a reputation for being bright, aggressive, and entrepreneurial; she had worked previously in Regis’s Portland office for two years where she headed the Microsoft account.

By 1983, Waggener had developed a business plan for a new public relations firm with an emphasis on teamwork. She approached Pam Edstrom and Tektronix veterans Jody Peake and Julie McHenry with her idea. Julie McHenry also had worked with Waggener at Regis. In 1983, Waggener struck out on her own and founded The Waggener Group. Peake and Edstrom joined her a few months later. The new group shared a top floor office with a view of the Willamette River.

The company’s first client was Mindset Corp., a Sunnyvale, California personal computer manufacturer. The Waggener Group’s results were notable: in an industry where very little set one firm apart from another, the group achieved outstanding media coverage that included the covers of two industry magazines and big spreads in several others. “We helped them clear the PC noise,” Waggener explained to Charles Humble of the Oregonian, who opined that “the results were impressive … in the wake of the cacophony over the Apple Macintosh.” There was a half-day event in the Bay Area at which Bill Gates spoke, promising to write software for Mindset, and where Time Arts, another software firm, demonstrated Mindset’s graphic capabilities.

Waggener’s efforts were successful, as she explained it, because her group had “been to the opinion leaders with the right message before.” Her company operated “on the premise that there are certain key people in the business of high technology that the media trusts as knowledgeable, unbiased sources of information. [T]hese are the people they ask about new trends, products and companies.” In lieu of approaching the media on a client’s behalf, she explained, her staff approached the people the media approaches. In the early 1980s, a time when computer industry news cycles were primarily product-driven, The Waggener Group began the practice of peppering reporters with product information. They also developed the practice of “overhang,” announcing products before they were ready for release in order to slow the adoption of competitors’ offerings.

Five months after becoming The Waggener Group, the firm agreed in 1985 to represent then new Microsoft as its client. Almost immediately thereafter, in a winning move that would set the course of its development, the small company was instrumental in getting Gates’s photo on the cover of Time magazine. By the end of its first year in business, The Waggener Group’s client list included high-tech powerhouses Mentor Graphics Corp. and Sequent Computer Systems Inc. in addition to Microsoft Corporation and Mindset “Back then, our challenge was to convince the technical press that our clients were real,” recalled Jim Buchanan, who joined the company in 1984 as general manager, in a 1994 Portland Business Journal article. In its first year, the new company’s projected revenues exceeded estimates by at least 25 percent.

Prominence and Further Growth: Mid-1980s Through the 1990s

Microsoft’s success spirited The Waggener Group into the public relations spotlight. As the manufacturing side of the PC industry grew, so did the public relations segment of the business. By the early 1990s, public interest in high-tech had blossomed with the introduction of personal computers. In 1990, with annual revenues of more than $5 million, The Waggener Group changed its name to Waggener Edstrom and founded Waggener Worldwide, a new organization whose mission was to establish a framework for future growth while allowing Waggener Edstrom to focus on technology and science-based account service. Pam Edstrom, who took the lead in representing Microsoft, became senior vice-president of Waggener Edstrom; Melissa Waggener remained president and chief executive officer. Jim Buchanan became chief operating officer, and Vice-President Jody Peake assumed responsibility for a comprehensive agency training program.

Waggener Edstrom kept growing in revenues, client base, and employees throughout the 1990s. When Regis McKenna closed its Portland office in 1991, the firm had only one local competitor—Hastings, Humble, Giardini & Freeman, which later became InSync Communications. In 1992, it added four major clients: Shapeware Corp. of Seattle, McCaw Cellular Communications Inc. of Kirkland, Interactive Home Systems Inc. of Redmond, and Starwave Corp. of Bellevue, which was the new company of Microsoft cofounder Paul Allen. Waggener’s 1993 gross billings were $11 million. In 1994, ten years after opening, the firm had three offices, brought in $14 million, and numbered 140 employees. By 1995, it employed 186 and had billings of $27 million.

According to some, Waggener Edstrom mirrored the culture of Microsoft—“combative and intellectually ferocious,” as one former employee described it in PC Week in 1997. But after more than a dozen years of monopolizing Microsoft’s Interactive Media

Group (IMG) account, the firm made the decision to resign it because Microsoft was growing so quickly that Waggener could no longer keep up with the software giant. Waggener Edstrom continued to service more than 30 other Microsoft products, however, including the company’s client and server operating systems, Internet platforms and tools, and other products from the company’s desktop applications division.

Anticipating Continued Growth into the 21st Century

By 1998, Waggener Edstrom, with 370 employees and billings of $47 million, also represented software giant SAP, Amazon.com, and graphic software firm Visio, although 60 to 65 percent of its total revenues came from Microsoft. It had offices in Washington, California, and Germany, in addition to Portland. In the second half of 1998, it acquired InSync, 75 percent of whose total revenues derived from Microsoft. After a period of turnover in the late 1990s, the firm reorganized its human relations department and, according to Waggener in Your Company, it “started to get more creative with benefits packages, recruiting, retention, and the other HR functions.” The company also conducted a survey of its employees, which revealed that staff was feeling disconnected from the mission of the company. In response, leadership began a series of small staff meetings to explain Waggener Edstrom’s vision and goals and followed up with companywide leadership training.

When Microsoft was investigated by federal antitrust lawyers in 1998 and 1999, Waggener Edstrom came under scrutiny for allegedly destroying documents and e-mail regarding Microsoft’s efforts to undercut its competitors. Waggener denied that it had done so, and although Microsoft’s public image clearly took a nose dive during and after its trial, Waggener Edstrom appeared not to suffer by virtue of its close association with the software giant.

Meanwhile, Portland was seeing a remarkable boom in its high-tech public relations industry. Four agencies opened their doors in Portland in 1998 alone. Within three years, ten new agencies had opened in Portland, focusing on clients ranging from software companies to dot-coms. A generation of public relations practitioners schooled by Waggener Edstrom, InSync, and rival KVO was striking out on its own. National agencies were opening branch offices in the city as well.

In 1999, high-tech accounts made up more than a quarter of the income generated by the nation’s leading public relations agencies. Firms that specialized in serving high-tech clients experienced double-digit growth and had more business than they could handle. Such spectacular growth continued with the development of e-commerce on the business-to-business side. Waggener Edstrom easily topped the high-tech public relations field with almost double the income of its nearest rival. It launched Waggener Edstrom Interactive to extend its core set of public relations and marketing communications services to the Web and formed a strategic relationship with Net Perceptions, Inc. In the wake of this development, Microsoft shifted most of the public relations for its MSN-branded Internet businesses back to Waggener Edstrom.

Company Perspectives:

Cutting edge interactive solutions combined with industry-leading high-technology public relations and marketing communications ensure that messages are conveyed to customers clearly and powerfully. The Waggener mission is to invent and deliver the best communications counsel and services, in partnership with businesses that are either in the technology industry or are selling their products via technology such as the Internet .

In anticipation of continued growth, Waggener Edstrom undertook organizational change in 2000, hiring six new vice-presidents to broaden its senior leadership team. It also moved and expanded its four-person office in Germany and opened a new office in Austin, Texas. The company, which was 15th in billings among worldwide public relations companies in 2000, was ranked by Working Woman as among the top 500 women-owned businesses in the United States. It was named repeatedly as one of the best companies to work for in Washington and Oregon by Washington CEO and Oregon Business .

Early in 2001, Waggener Edstrom acquired pr.com, a Kirk-land, Washington-based public relations agency that focused on wireless and wireless Internet communications technology clients, and made it a subsidiary. With high-tech poised for a possible dip in income in coming years, Waggener targeted the telecommunications hardware, biotech, and science and technology sectors to diversify its client base. One of the last independents among the nation’s top 20 public relations firms, Waggener Edstrom opened a new office in London and moved to new offices in Washington state.

Principal Subsidiaries

pr.com.

Principal Competitors

atomic PR; BSMG; Brodeur Porter Novelli Convergence Group; Fleishman-Hillard Public Relations (parent of KVO) ; Omnicom Group; Shandrick; True North Communications Inc.; Weber PR.

Key Dates:

1983:: Melissa Waggener founds The Waggener Group; Pam Edstrom, Jim Buchanan, and Jody Peake join the company a few months after its opening.
1985:: Waggener takes on Microsoft as its client.
1990:: Company changes its name to Waggener Edstrom.
1998:: Company acquires InSync Communications.
1999:: Waggener Edstrom launches Waggener Edstrom Interactive to further extend its online services.
2000:: Company opens a new office in Austin, Texas.
2001:: Company acquires pr.com and opens a new office in London.