DIRECT MARKETING: CHAMPIONING THE DIRECT ROUTE

Are major clients convinced by the growing number of DM agencies taking over integrated campaigns? Holly Acland investigates.

Excelling in just one discipline is rather unfashionable nowadays.

Direct marketing agencies are vaunting their brand-building credentials, advertising agencies offering DM solutions and media agencies scooping the lot, claiming the media-neutral high ground.

In some respects this is inevitable as agencies try to grapple with an increasingly complex media landscape. But there's also a commercial imperative.

Jonathan Clark, the chairman of the direct marketing agency Clark McKay & Walpole, says agencies' desires to diversify are more a bid to feed the "insatiable appetite" of their holding companies with new revenue streams.

It's a cynical view, yet one which resonates with many. But, regardless of the motivating factors, any agency attempting to offer a more integrated solution will fail unless the client genuinely buys into the skills and expertise it can offer across a range of disciplines. And in this respect, DM agencies are particularly well-placed to handle integrated campaigns.

Direct marketing agencies have always been open to working across different customer touchpoints: the phone, internet, direct mail, e-mail, or press and posters. No one channel reigns supreme. This puts a premium on ensuring a consistent brand identity and idea is translated across the channel mix.

Chris Thomas became the chief executive of Proximity London this September after 20 years in advertising, most recently as the chief executive of Lowe. He says: "My initial perspective is that they (DM agencies) are much more creatively and strategically open-minded than many traditional ad agencies."

This flexibility is appealing to clients increasingly looking for answers to business problems rather than a bog-standard implementation of a marketing plan. They are also looking to their agencies for better accountability, another strength of DM that is especially appealing in tough times like these.

This has contributed to the financial stability of below-the-line shops.

In the IPA's most recent Bellwether Report, DM budgets were revised up in quarter three of this year by an average of 5.7 per cent compared with media advertising budgets - revised down by 3.4 per cent.

The drift in spend from above- to below-the-line channels has been well documented. But that doesn't mean DM agencies are necessarily delivering integration in its fullest sense. They may be able to achieve creative and brand consistency across a certain communications mix but few would ever claim to be able to tackle the full raft of channels, including the traditional above-the-line territory of brand advertising.

In this respect, the challenge of integration resides with the advertiser.

"I am very, very cynical about the ability of any agency to deliver a holistic view," Claire Salmon, the marketing director at the AA, which works with four agencies (M&C Saatchi, EHS Brann, Rapier and Manning Gottlieb OMD) says. "I still want to buy the 'best of breed' for everything and have never seen an agency which can deliver that. Even agency groupings are very rarely able to deliver synergies across the agencies - the account management just isn't robust enough."

Salmon is not alone in her views. Many advertisers are cautious about putting all their eggs in one basket but are getting better at creating the environment in which integration between their agencies can take place.

When the AA launched its "Just AAsk" positioning in May 2002, for example, regular meetings between the different agencies ensured the creative directors agreed on how the theme would be translated across media. "The client has to retain a key role in integration. You can't rely on the agencies to figure it out," Salmon adds.

This means being very open from the outset about how the cake is being carved up between agencies; laying down ground rules to ensure agencies don't tread on each others' toes, and coming up with an idea (regardless of where it originates) strong enough to be translated consistently across media.

DM agencies are not only winning in their willingness to collaborate on an integrated brief. It's also in their ability to tackle a brief on a higher strategic and creative level. Take work from Archibald Ingall Stretton for BMW, Partners Andrews Aldridge for Lexus, Craik Jones Watson Mitchell Voelkel for Land Rover and Proximity London for Sainsbury's. All are good examples of relationships which involve collaboration but also show the role of DM agencies going beyond basic implementation to get under the skin of the brand.

Matt Button, the CRM and database marketing manager at Lexus, says of Andrews Aldridge: "We don't buy into their ability to run a campaign - which is a given - but to make a difference to the business in terms of their thinking."

In order to offer this level of advice, the planning department has a crucial role to play. This is where DM agencies have often lost out. "The challenge is whether below-the-line agencies genuinely have the strategic and creative skills to solve the big problems," Jon Ingall, the managing partner at Archibald Ingall Sretton, comments. "We've built our agency around doing exactly that, but a lot of direct agencies struggle."

Ingall would argue his agency's work for clients such as Seeboard and City & Guilds - both of which include TV activity - demonstrate its ability to bridge the gap between advertising and DM agencies. But not everyone believes a DM agency can be a credible alternative. "Below-the-line agencies will never match the media planning and brand planning skills of above-the-line agencies," Mark Leversedge, a managing partner at the recently launched below-the-line shop Elvis, says. "It's just not going to happen."

The new venture is backed by the ad agency Miles Calcraft Briginshaw Duffy and will tap into its specialist brand, media and research planning resource. "Lots of companies talk about integration and believe in it, but they can't deliver it 100 per cent. You can never be 100 per cent brilliant at everything," Leversedge adds.

Some believe DM agencies risk undermining what they stand for if they try to barge into the advertising space on their own. "If DM agencies apply the same principles this industry is founded on to tackle integrated assignments then they will not be diluting their positioning," Chris Whitson, the planning director at Clark McKay and Walpole, says. "However, if they claim to be able to develop the next global ad campaign for a FMCG conglomerate, then they probably are moving beyond their core skills in search of fame, money and glamour."

Regardless of motive, there's no doubt the distinction between above- and below-the-line agencies is blurring. This is set to continue as media fragments further and agencies of all disciplines diversify to stay in the game.

WHERE DIRECT MARKETING AND MEDIA COMBINE TO GREAT EFFECT

Industry estimates suggest that direct response communications account for 35 per cent of all UK advertising - close to £6 billion annually.

The situation has evolved slowly, but explains the increasingly close relationship between DM and media shops. There may have been a time when media specialists viewed DM budgets as too small and fragmented, but that's no longer the case.

"Something like 20 to 25 per cent of the money spent through Mediaedge:cia in London has a response mechanism,"Rob Norman, the company's UK chairman, declares. "Moreover, every client using direct response has an opportunity to grow their business if they get it right. It would be disingenuous for us not to be interested."

This is clearly true despite big differences in buying media to generate cost-effective response and buying to raise brand awareness. Differences which justified some of the larger DM agencies having their own media departments.

Critically, much response advertising is based on last-minute, discounted, "distress" campaigns. That's because a common aim is to achieve the lowest cost per response or cost per sale.

"In the past I've screamed at media agencies because no-one appeared to understand what I was saying," Sez Maxted, the managing director of Draft Worldwide (UK), admits. "Now most of them plan direct response campaigns very well. But we've had to push them."

The attractions to DM agencies of working more closely with media shops start with the latter's buying power. There's also the chance to combine complementary technology and skills. In terms of how the two sides are getting together, however, diversity rules.

In April this year, WPP's media and DM networks, MindShare and OgilvyOne, merged their digital and DM media buying interests into a new company, mOne. In June, the WPP sibling Mediaedge:cia formed a joint venture, The Platform, in London with the DM agency Harrison Troughton Wunderman. Meanwhile, Omnicom's OMD and WWAV Rapp Collins last year relaunched an existing joint venture under the new name OMD Connect.

Maxted, though, is adamant she doesn't want a joint venture. "We don't want to be media people," she says. "The way we work with media agencies varies from client to client. Why eat in the same restaurant every day?"

The same argument cuts the other way, too. Simon Foster, the managing director of PHD's direct media arm, PHD Confidential, claims he would not want too intimate a link with one DM agency, if it meant he couldn't criticise creative work when he needed to.

Even so, PHD Confidential is the "preferred partner" of one of the most creative DM shops, Craik Jones Watson Mitchell Voelkel. The managing director, David Watson, says: "You will find more agencies like us responding to the direct initiatives of media agencies. It strengthens our offering against the likes of WWAV, Proximity and EHS Brann, with their in-house media operations."

In a similar way, Tullo Marshall Warren works regularly with the media independent Brandlinks as a way to develop soundly based, media-neutral solutions.

As Norman points out, the media agencies have great expertise in analysing readership and audience figures, while the DM agencies understand the individual customer. Combining the two leads to more sophisticated segmentation. - Ken Gofton.

- O2 demands closer links between DM and media. Direct response press ads are measured by the media specialist PHD Confidential by copy, title, space size, day of week and position. "We have reduced the cost of acquiring customers through press ads by more than 50 per cent, simply by working closely with PHD Confidential on media efficiency, and establishing a strict ROI," the marketing director, Nicky Stannett, says.

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