During the market struggles of the second half of 2000, investors, press and analysts were quick to judge significant stock drops as dire signs of company and industry failure. B2B was declared dead and if your stock was falling, that meant disaster in the press. In this atmosphere, Schwartz Communications placed a series of stellar business press profiles of webMethods, Inc., a maker of  complex B2B integration software. Although the company had lost 80 percent of its market value following a stellar IPO (the best first day gain of 2000), Schwartz convinced media to look beyond the stock drop. webMethods was a fast-growing company that had become the backbone of B2B integration, was gaining dozens of customers every month and trimmed one year off the path to profitability. In other words, last year’s stock superstar was weathering the storm---and serving as a beacon of hope and success in a turbulent market.
Editors (honestly) were outright rejecting “positive” stories from their reporters. The story was the economic downturn and everyone was leading with the stock slump. They were telling Schwartz that “no one cares about B2B anymore” and that “we are too busy working on layoffs.” We faced the daunting challenge of changing the mindset of the media, avoiding knee-jerk stock stories and focusing their attention on the positives of a company with little help from prevailing market conditions, trends and the company’s current stock price.
Any research conducted prior to the execution, plus a description of the planning process, including a statement of objectives:
Our goal was straightforward. Convince reporters to write stories illustrating webMethods’ success with a positive spin on the current, low, stock price. To do so, we collected a vast amount of positive information on the market opportunity and webMethods’ success.
Research Results pointed to an amazingly strong company—and even greater market opportunity. Research from Jupiter showed that an estimated $350 billion would be spent on Internet infrastructure by 2003. Seventy-four (74) percent of which would be on integrating systems, the core of webMethods’ software business. webMethods also had a measurable track record of success including: beating expectations; breaking even one year ahead of schedule; and a continuous stream of new customer wins (adding several dozen a quarter). And all of this was topped off by the simple fact that a company with less than $100 million in revenues still had a $3 billion market cap after a more than 80 percent stock fall.
Preparation included thorough media coaching to prepare CEO Phillip Merrick for a whirlwind tour with key business press. Schwartz worked with Merrick on a verbal (not PowerPoint) presentation that projected a strong, visionary CEO that was keeping his company soaring during a time when most first-time CEOs were trying hard not to wet their pants. We also developed a “story sheet” that delivered the CEO key, compelling points.
Schwartz immediately put webMethods co-founder and CEO Phillip Merrick in front of key media at the most influential business publications in New York, Boston and San Francisco. Our aggressive approach tackled the stock-focused questions head on. It demonstrated that the company was not afraid of the market and that it was on strong, solid ground despite NASDAQ’s daily plunges. We were honest and quickly presented layer upon layer of evidence that pointed to webMethods as a rising star temporarily dragged down by the market woes. In this environment, we pointed to a new economy that would reward things like a solid customer base, sales size and acceleration to profitability—all positive areas for webMethods. Even if reporters focused on the nitty-gritty stock movement, we were able to point to a small stock rebound with shares holding between $70-90 a share for much of October, November and December. And it had not sunk nearly as low as competitors (and even market movers).
In late 2000, Schwartz arranged proactive in person meetings for Phillip Merrick with Business Week, Forbes, The Industry Standard, eCompany Now, Smart Money, The Economist and Line 56. Combining the messaging with a strong October earnings announcement resulted in an appearance on CNBC and coverage from CNBC, CNNfn, Fox News and Bloomberg. Print coverage included Reuters, Washington Post, CBS MarketWatch, Upside, TheStreet.com and ZDNet.
As a result of the proactive meetings, webMethods was profiled in the Business Week online “Street Wise” column titled, “A ‘Beacon’ in the B2B Wasteland.” The article reiterates much of the messaging that Schwartz developed to secure the meeting and that served as the basis for Phillip Merrick’s presentation during the interview.
Schwartz secured a second webMethods feature in the “Just Managing” column of the Industry Standard. The article, “Weathering the Storm: How has webMethods managed to survive the turbulent market? It simply followed the Golden Rule,” again clearly communicates the messaging that Schwartz leveraged in securing the interview.
A third feature in the December issue of Line 56 is titled, “Throwing Down the Gauntlet.” This piece discusses webMethods rapid rise to stardom and subsequent resiliency in the marketplace. eCompany, The Economist, Forbes, CNBC broadcast and CNBC.com are several additional outlets that are planning stories as a result of the momentum built by this campaign.
When Schwartz began the campaign in earnest surrounding the October 25 earnings announcement webMethods was trading at $85 a share. At the close of 2000 and after the affects of the campaign was apparent the company was trading in the $88-90 range, an increase of just less than 5%. Although this is not a drastic gain, in comparing the results to similarly sized companies in the same market the results were astounding. Vitria (Nasdaq: VITR, www.vitria.com), a company that announced almost identical revenues, growth and achieved break-even in late October with webMethods decreased from more than $30 per share to less than $8 a share, a decrease of 75% over the same time frame. Tibco (Nasdaq: TIBX, www.tibco.com), a much larger competitor, decreased 22% to less than $50 per share. Even perceived B2B software bellwethers Ariba and Commerce One lost more than half of their value during this same period and were trading approximately 25-40% lower than webMethods.
The campaign did not stop there. When webMethods announced that the company achieved profitability in late January and realized growth of more than 200%. Customer wins included names such as Cisco, Supervalu, Atofina, Exostar and ForestExpress. The Agency continued with the “beacon” campaign scheduling an 18 meeting, three-day tour in NY and San Francisco with outlets such as USA Today, Business Week, Money Magazine, Red Herring, Barron’s, Industry Standard, Forbes ASAP, Financial Times and theStreet.com accepting interviews with Mr. Merrick. (Wait until you see those stories next year!)