Should direct media go solo?
By by Alasdair Reid, campaignlive.co.uk, Friday, 22 July 2005 07:00AM
Should media specialists have separate direct media divisions, Alasdair Reid asks.
Until relatively recently, direct media was something of a grey area for the majority of media specialists around town. True, there are a handful of acknowledged experts able to offer a first-rate service but, down the years, many have paid no more than lip service to the skills needed to buy media for direct clients. It is not good enough, the real specialists argued, to base your credentials on the fact that you buy the occasional one-off DRTV campaign.
This arguably didn't matter so much in the old days, when it was far easier to pigeonhole clients. The big direct clients went with the best direct media buyers. But the digital media revolution is changing all that and most major advertisers, even the big packaged-goods multinationals, now need significant amounts of direct expertise.
They are all out there, gathering data on the customers via direct response mechanisms of one sort or another and they use increasingly sophisticated techniques to communicate with their customer base. Whichever way you look at it, direct marketing techniques are now central to the communications strategies of many advertisers.
So, in some respects it is not entirely surprising when even a relatively small specialist such as BLM Media serves notice that it is not only beefing up its skills in this area, but is launching a specialist division. BLM Future Direct will be headed by Karen Mayer, who was the commercial director of the group's digital interactive arm, Quantum.
Are we going to see a lot more agencies such as BLM not just reconfiguring and beefing up their direct expertise but giving it strong branding by hiving it off into a separate division?
Martin Troughton, the UK chairman of Red Cell Response, isn't so sure.
He says there is enough fragmentation in the marketing services sector already and also implies that it could be a risky strategy if you don't have the complete direct media skill-set. He states: "I'm not sure they have enough database expertise. Too often, direct media is talked about in terms of cost per (customer) acquisition rather than in terms of the value of that acquisition.
A fundamental element in determining that is database analysis - that's how you understand how campaigns affect existing customer behaviour. But it's certainly true that digital is an important factor here. When it first came along, people treated it like a conventional medium. Now we know it's not a conventional medium and things such as search optimisation and pay-per-performance need to be monitored and modified. Anyone who wants to keep a hold of their clients' business has to offer those sorts of skills."
Andy Sloan, the managing director of All Response Media, says you can't put clients in shoe boxes any more - the way technology is moving, that can't be the case - and clients will increasingly expect full-service agencies to be able to offer more. He comments: "There's a greater ability to capture data and increasingly sophisticated means of processing it. So if you are sitting in a media agency, you're going to want to have a long-term strategy for managing all aspects of that relationship."
Jed Glanvill, the managing director of MindShare, argues that any media specialist worth its salt will already have considerable direct media skills and resource integrated into the fabric of the agency. He states: "It's not necessarily about different channels, it's about different ways of thinking. For an FMCG advertiser, it might be about one-to-one and CRM - understanding the behaviour of certain types of customer. For a financial services company or a utility, it's more about phone numbers, DRTV and e-commerce. You have to reflect the market you are in."
Arguably the group with the most successful specialist unit is MediaCom.
David Kyffin, the managing director of Direct MediaCom, says in general there's more than a little "woolly thinking" in this area; agencies trying to tack all sorts of less-than-rigorous response metrics on to brand campaigns.
He also argues there has been too much of a focus on digital. Interestingly, the MediaCom group has continued to house its digital offering under a separate branding, Media.Com, though Kyffin says the two units can and do work closely together. He concludes: "It means we can still keep the specialisms without watering down their offering. If you present your company as an amalgamation of direct marketing and digital, I think it sends the wrong signal to the marketplace."
NO - Martin Troughton, UK chairman, Red Cell Response
"Most media agencies would say they don't feel the need to split direct media off. Almost every client wants both direct and traditional media skills but they won't go to two different places to get them."
MAYBE - Andy Sloan, managing director, All Response Media
"Many media agencies might admit they struggle to compete with the real experts but it depends on where the primary relationship exists. These days some advertisers have their main strategic relationship with a media agency."
NO - Jed Glanvill, managing director, MindShare
"You can't be a top agency without a whole range of those skills. It's an attitude that has to run through the whole business. So I'm not sure about the wisdom of putting this expertise out there in a separate unit."
YES - David Kyffin, managing director, Direct MediaCom
"People look at digital as the way to future-proof their offering but many clients still think of direct in terms other than digital. In direct marketing terms, the real opportunity is to help advertisers open up multiple routes to market."
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This article was first published on campaignlive.co.uk