CLOSE UP: DIRECT MARKETING ISSUE/CONSOLIDATION BELOW THE LINE - Mosaic’s link-up with other shops proves there’s safety in numbers

There were the big children in the playground who could look after themselves perfectly well. Then there were the smaller ones, who were either too different and weird to get noticed or they had a big brother to ’get you’. Finally, there were the average-looking, unremarkable children who, in order to get noticed, ganged up together and strode, slightly shambolically, around the playground with linked arms.

There were the big children in the playground who could look after

themselves perfectly well. Then there were the smaller ones, who were

either too different and weird to get noticed or they had a big brother

to ’get you’. Finally, there were the average-looking, unremarkable

children who, in order to get noticed, ganged up together and strode,

slightly shambolically, around the playground with linked arms.



Which is how there is going to be a new ’top five’ direct marketing

agency. The four UK agencies owned by the highly acquisitive Canadian

network Mosaic are linking arms: the creatively focused direct marketing

agency Stretch the Horizon; the sales promotion agency ZGC; its direct

marketing sister Dialogue ZGC and the brand extension outfit Creative

IQ. None of the four were going anywhere near the top ten on their own,

yet none quite had the oomph that a small agency has to have to be one

of the nicely weird children. It’s a shame to waste a client list

boasting Renault, Coca-Cola and Hewlett-Packard on itty-bitty outfits.

As the large agencies get larger, if you can’t beat them, you have to

join them. Medium-sized is so 90s.



It was some years ago that advertising and media agencies (or their

owners) realised that the globalisation and consolidation of their

clients’ business meant that they had to provide a consistent service

across major markets.



But direct marketing lagged behind. The intimate nature of one-to-one

communications clouded the issue - how can you provide economies of

scale on an international campaign when not only does your marketing

activity vary from country to country but also from customer to

customer?



It’s not a marketing question, however, but a business one. As clients

shift more of their budgets below the line, it is less cost-effective to

have a diverse roster of direct marketing agencies. Clients want to buy

their direct marketing in bulk and let the local agencies sort out a

domestic slant on a worldwide masterplan.



So to get this kind of global buying power, the local markets need to

get leaner. Myriad consolidations and mergers on the UK direct marketing

scene (Tequila with Payne Stracey; Grey Direct with Grey Integrated;

Jones Mason Barton Antenen with Claydon Heeley to name recent ones) have

been at least partly to do with beefing up for a global presence.



And the knock-on trend for bigger UK agencies is largely a healthy

one.



It brings them into line with the advertising agencies and provides more

choice for clients wanting a shop of a certain size. They help nurture

talent and ambition, vital for creating entrepreneurs to set up small,

creative agencies. And they force the often complacent medium-sized

agencies to work harder to provide a point of difference.



The smaller agencies do defend their positions. They say that clients

have regular access to senior people and that the agencies have unique

personalities. But do the small agencies want to stay small? There is no

small direct marketing agency around that thinks it can stay that way.

The question is not whether to merge, acquire or be acquired. It’s when.



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