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Ad strategies differ in IPO quiet period

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Shhhhhhhhhh.

Last month, SupplierMarket.com, Burlington, Mass., filed with the Securities and Exchange Commission for an initial public offering. Since then, the b-to-b online trading exchange, which processes requests for quotes for items such as 250,000 stainless steel o-rings, has been in what's known as a "quiet period."

Most companies curtail outside external communications during the period. For instance, SupplierMarket.com declined to speak on the record for this story. But unlike many companies, it has continued its advertising program, even launching a new TV spot earlier this month.

"The message has to be limited [in the quiet period]," said Dina Lees-Addis, director of the SupplierMarket.com account for the Donovan Group, a Northborough, Mass.-based ad agency. "You can't start doing something or saying something new is the way the lawyers explained it."

The Donovan Group interprets the new TV spot to be a continuation of SupplierMarket's current campaign. It simply brings the same message to a different medium.

The TV spot, titled "Coin Office," shows a company trying to nickel and dime its employees by putting, for instance, pay phones on their desks. The spots are running on Sunday morning policy programs, PGA Tour broadcasts, and local cable TV, Lees-Addis said.

The TV spots target executives with a message that SupplierMarket.com can increase profits. The company used a similar message in radio spots and print ads, which began running in January. The print ads are appearing in Business 2.0, Fortune, the Boston Globe and other publications. Other ads, aimed at purchasing departments, debuted last September.

SupplierMarket.com believes its continued advertising doesn't violate the quiet period. It seems the SEC tends to agree.

"The quiet period is a matter of practice rather than one of regulation," said John Heine, the SEC's deputy director-office of public affairs. "There's no section of code in the federal regulations that I can point you to where it says, `This is what you can do and this is what you can't do.'|"

The quiet period practice stems, Heine said, from possible fraud litigation that may result from a failed IPO, especially one that was hyped with advertising or excessive public relations. Generally, a company seems to be safe if it doesn't change anything in the wake of filing for an IPO.

"When General Motors issues stock, it doesn't stop advertising," Heine said. "Whereas when a company that's never advertised before starts advertising around the time it's going public, that might raise some eyebrows."

The nascent Web conferencing industry shows two different approaches to the quiet period. Evoke Inc., a Louisville, Colo.-based company formerly known as VStream Inc., is taking a cautious approach. The company began advertising in January in broad business publications and trade books.

After filing to go public in February, the company, on the advice of its lawyers, scaled back its advertising to focus on trade magazines, according to Paul Marobella, chief relationship officer at Evoke's agency, New York-based Greco Ethridge Group.

On the other hand, Placeware Inc., Mountain View, Calif., which filed for its IPO in March, continued an ad campaign it launched in January. The campaign, which was created by Goldberg Moser O'Neill, San Francisco, is appearing in The Wall Street Journal, the San Jose Mercury News and other publications.

"What you can do is do business as usual," said Kathryn Romley, Placeware's senior public relations manager. "Doing business as usual means announcing new services and products without doing what [the SEC] would label as pumping up the value of stock in your company. It's a gray area." thing in the wake of filing for an IPO.

"When General Motors issues stock, it doesn't stop advertising," Heine says. "Whereas when a company that's never advertised before starts advertising around the time it's going public, that might raise some eyebrows."

The nascent Web conferencing industry shows two different approaches to the quiet period. Evoke Inc., a Louisville, Colo.-based company formerly known as VStream Inc., is taking a cautious approach. The company began advertising in January in broad business publications and trade books.

After filing to go public in February, the company, on the advice of its lawyers, has scaled back its advertising to focus on trade magazines, according to Paul Marobella, chief relationship officer at Evoke's agency, New York-based Greco Ethridge Group.

On the other hand, Placeware Inc., Mountain View, Calif., which filed for its IPO in March, has continued an ad campaign it launched in January. The campaign, which was created by Goldberg Moser O'Neill, San Francisco, is appearing in The Wall Street Journal, the San Jose Mercury News and other publications.

"What you can do is do business as usual," says Kathryn Romley, Placeware's senior public relations manager. "Doing business as usual means announcing new services and products without doing what [the SEC] would label as pumping up the value of stock in your company. It's a gray area."

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