The global advertising networks have been interested in direct
marketing for many years. Over the past decade, successful independents
across the globe have been snapped up as networks realise the importance
of offering direct marketing expertise. However, the suspicion has
remained that the direct marketers have been tucked away and ignored,
seen as ugly sisters by their more glamorous advertising siblings who
won't allow them to go to the ball.
This might just be changing. Direct marketing has moved up the agenda
both for clients and within advertising networks. And there are three
clear reasons why: clients are demanding a wider range of services;
technology is driving ever more impressive one-to-one techniques, and
growth levels and profit margins can be larger in direct marketing than
The facts are hard to ignore. In the UK, for example, recently released
IPA figures show that the two largest direct marketing agencies,
Omnicom's WWAV Rapp Collins and WPP's OgilvyOne, are the 12th and 20th
largest agencies in the UK based on income. The talent in direct
marketing agencies is also rising to the top of the networks - Shelly
Lazarus, the chief executive at Ogilvy & Mather, and John Farrell, the
global chief at D'Arcy, are both examples of direct marketing exponents
who have gone on to run ad networks.
However, the networks differ in their attitudes to their direct
marketing properties. John Shaw, the managing director of European
agencies for Havas-owned Brann, says: 'There is a big difference between
the Young & Rubicam and Havas networks. In Y&R, the ad agency managing
directors took the lead with clients. Senior people in direct marketing
were very much second best, but at Havas we're all on the same playing
Ogilvy claims that its direct marketing agency works very closely with
its advertising business. Reimer Thedens, the worldwide chairman and
chief executive of OgilvyOne, says: 'The Ogilvy strategy is 360-degree
brand building and this requires us to have close relations with other
parts of Ogilvy. Our relationships have always been close but have
become closer. We seem to be seen as equal partners.'
Thedens puts this change down to increased client spend on direct
marketing and the move upstream into the CRM arena. He says:
'Traditional direct marketing as defined by direct mail has become less
important. But building customer equity both online and offline is a
Generally, the quality of the management in direct marketing agencies is
improving and with this the reputation of the agencies is growing within
their networks. Campaign spoke to direct marketing chiefs at three
networks (Omnicom, Havas and Interpublic) and WPP's group chief
executive, Martin Sorrell, to gauge exactly how direct marketing is
viewed by the networks.
MARTIN SORRELL - WPP Group
WPP owns the world's two largest direct marketing networks, Impiric and
OgilvyOne. It also owns several other direct and promotional agencies
including Perspectives Red Cell, Promotional Campaigns Group and
Impiric is run as part of Young & Rubicam and OgilvyOne as part of
Ogilvy but both have relationships with other WPP agencies.
Sorrell has been a great advocate of non-core advertising businesses
(particularly direct marketing and PR) in building the WPP Group. He
says: 'The attraction to clients of direct marketing is that it provides
quantitative backing to activity: it is far faster than traditional
advertising in achieving results and is more international in character.
Technology has speeded its advance.'
Sorrell says that the pace of growth in direct marketing agencies has
made agency chiefs sit up and take notice: 'Growth levels of between 15
and 20 per cent are much stronger in direct and interactive than in
Specialist communications, of which direct marketing forms the major
part, contributes 25 per cent to WPP group revenue. Sorrell expects this
to continue to rise.
He says that attitudes to direct marketing have changed within WPP.
'Below the line was always seen as below-the-salt. It didn't have the
status but when there are people like Shelly Lazarus at Ogilvy, who has
a strong feel for that side of the business, then the profile is
Sorrell says that the key aspect in WPP's approach is integrating its
direct marketing activity with other disciplines. 'This is what
communications is all about. If you ignore direct marketing then there
is a risk of lack of integration.'
Martin Sorrell is WPP's group chief executive.
MICHAEL BIRKIN - Omnicom
As boss of Omnicom's Diversified Agency Services operation, Birkin has
control of more than 100 companies in the direct marketing, PR,
promotional and branding fields. These include Rapp Collins Worldwide,
Claydon Heeley Jones Mason and the US agency Direct Partners.
Birkin says: 'In Omnicom, there is no doubt that direct marketing has
grown in stature. Technology and the internet allow for targeted
approaches. This is an extremely important area of development.'
Birkin feels that the quality of creative has also helped raise
recognition of direct marketing: 'The quality of talent it attracts is
now very high and most clients see the value of a mixed-media
He feels that there is closer co-operation between traditional
advertising and direct marketing. 'In the 70s and 80s, integrated
marketing failed because advertising agencies didn't honour services
other than advertising. There was a spate of acquisitions in the 80s
that didn't work out because the ad agency was too much the focal point
and the subsidiary agencies weren't motivated.'
As direct marketing has matured so have opportunities for its key
management, Birkin argues. He says: 'There have been some incredibly
successful entrepreneurs in the past. There have been talented people
all along but ten years ago it was more difficult for them to grab
people's attention. Ad agencies also had first pick of people, but this
is all changing.'
Birkin explains the importance of direct marketing to the networks:
'Direct marketing has moved from being run by an entrepreneurial bunch
of people to an area that is at the forefront of a marketing director's
Michael Birkin is the president of DAS Worldwide.
STAN RAPP - Interpublic Group
Rapp is one of the great names in direct marketing, having founded the
Rapp Collins network, leaving in 1988 to become a consultant and author,
and then joining McCann four years ago to lead its McCann Relationship
Rapp says that during the past four years marketing services has come to
be regarded as as important as advertising within the McCann-Erickson
Customer relationship marketing is the most important of the marketing
services to the network.
He says: 'The demand is coming from our clients. This has been
responsible for the advance in information technology, opportunities
with the internet and the growth of other tools to interact with the
McCann made a decision four years ago to elevate the status of direct
marketing and other marketing services. Its then boss, John Dooner, who
now runs Interpublic, restructured the group board and introduced
'leaders' for each service: Rapp in the direct marketing field, and
others in PR and promotional marketing. The aim was to increase share of
group revenue from marketing services from 10 per cent to 50 per cent.
The balance is shifting, with 40 per cent of revenue now coming from
Rapp agrees that this has indeed elevated the status of direct
'It's no longer the case that advertising takes care of the brand and
everything else is ancillary. The clients now want to build brand
relationships and so need strong brand work and relationships with
The status of direct marketing management has increased accordingly:
'The new board of the McCann-Erickson world group has integration, or
collaboration as we call it, as its fundamental concept. This is being
pushed down through the organisation to every manager across the
Stan Rapp is the chairman and chief operating officer of MRM
JEAN-MICHEL CARLO - Havas
Carlo heads Havas' Diversified operations, which includes direct
marketing agencies such as Brann, ehsrealtime and the global network The
He says: 'Direct marketing has become more and more important in most
global organisations and is an increasingly powerful tool for big
However, he says advertising is still at the forefront of clients'
minds: 'Direct marketing is the second most important discipline after
When asked if direct marketing will overtake advertising as a
discipline, Carlo is cautious: 'I don't know. The two are different.
Advertising is so powerful for building brand awareness but direct
marketing already represents between 30 per cent and 40 per cent of some
clients' spends and this will increase.'
Carlo points out that direct marketing is used mainly in mature markets
where advertising has already been in existence for decades. He says:
'You don't need it in China because it's easier and cheaper to use
He is convinced that integration between advertising, PR and direct
marketing is key in meeting client requirements. He feels that
technology is presenting direct marketers with great opportunities: 'The
discipline is so involved with technology. Interactive TV has huge
potential and DM agencies are key players in it. Advertising people
don't really understand how to use it.'
An advertising man himself, Carlo was chairman of Y&R in Europe and
France and then BDDP in France. He has also noticed that direct
marketing has moved up the pecking order in the large networks.
'Advertising people used to be arrogant but now have to deal with direct
marketing because clients want it. If you work for a major car dealer or
a company like Tesco, then the DM agency is vitally important.'
Jean-Michel Carlo is the vice-chairman of the Diversified Agencies