DM Essays - Simon Calvert on DM and media
campaignlive.co.uk, Friday, 02 July 2004 07:00AM
As direct marketing and media intertwine, what are the benefits for agencies? Will media and direct agencies merge in future? asks Simon Calvert, the planning director at Proximity London.
Have you ever tried to complete a jigsaw puzzle using only half the pieces in the box? No? Well, let me begin...
The marketing communication industry is made up of a number of silos, each with a defining set of specialist skills and characteristics. These silos exist at a company level, for example, direct media, advertising and PR. They also exist at an employee level -- planners, client service, finance, data specialists and so on.
This essay looks specifically at taking two of the company-level silos -- media and direct -- and asks a fundamental question about the benefits of merging them.
Where to start? The carefully crafted works of self-promotion that are the websites for some of the UK's biggest media and direct agencies seem like a good place. Sift through the mass of content that these companies serve up and four themes emerge.
One, they share a claim around offering a direct response channel selection and procurement service. Two, they share claims around the use of data and high levels of accountability. Three, they are divided by the fact the media agencies don't offer a direct response creative service. And four, they are further divided by the fact that direct agencies don't offer a brand-building media planning and buying service.
So, at first glance, there are some obvious areas of overlap. But does this provide sufficient grounds to justify a full-on merger? For if it does, then the offspring of such mergers would be organisations formerly known for their media credentials entering the creative execution space.
It would also see organisations that were known for their direct credentials entering the brand-building media and planning arena. In effect, this new generation of agencies would trade from a much "broader service" platform.
For this broader service platform to survive, clients would need to be convinced of the benefits that merged media and direct capabilities would offer. After all, the over-claiming and under-delivery of many "solution neutral" and "integrated" agencies is already legendary within the client community.
To examine the potential benefits of a merged offering to clients, we need to back up a bit. At the heart of most marketing communication problems is a simple issue: how does one spend a client's marketing money to change customer behaviour in ways that improve the financial performance of the client's organisation?
Be you a media or direct agency, you need to be able to demonstrate to clients that your silo of skills plays an important role in changing customer behaviour. So then, from a client's point of view, the merits of merging media and direct agencies can really only be judged in a behaviour-changing context: will this deliver to me (the client) better, simpler, cheaper behaviour changing solutions?
Let's fast forward to the four themes that emerged from the mass of website content that the biggest UK media and direct agencies serve up. Would a merged world improve the direct response channel selection and procurement service?
It might, via greater buying clout and a larger pool of accumulated experience.
This in turn could lead to cheaper and better behaviour-changing solutions.
Would a merged world improve the use of data and accountability? It might, via a larger pool of accumulated experience and access to a wider base of research resources. This, in turn, could lead to better behaviour-changing solutions.
Would a merged world improve the quality of direct response creative, or improve the brand-building media planning and buying service? The case for both is less obvious and therefore unlikely to make a difference to the quality of the behaviour changing solutions.
In sum, a merged world could deliver better and cheaper behaviour-changing solutions in the existing areas of overlap. But I'm unconvinced that it would do much in the areas where the existing services offerings are distinct and separate.
Here, we should pause for a moment. We all know that media and direct agencies are part of the much larger marketing communication puzzle, sitting alongside PR, advertising and customer experience agencies.
We also all know that the other pieces of the marketing communications puzzle have also historically operated, at a company level, as unmerged silos. We also all know that they are both increasingly intertwining with each other and with media and direct agencies. So the question about the merits of merging media and direct agencies should also apply to merging the other disciplines.
So how might this directly impact on the merits of merging media and direct shops? The short answer is that the business case for starting somewhere else could well be a lot stronger. To put it another way, if one were looking to merge marketing communications agencies, would media and direct agencies be the first union one would look to make?
After all, a client's behaviour-changing agenda might be better served if one looked to put media agencies together with advertising or PR companies.
Likewise for direct agencies. I could build business cases for each of option, plus a whole load more, but I only have 1,000 words.
Media and direct agencies may not be the first pieces of the puzzle their owners play mergers with. However, mergers are not the only option. So don't rule out a future in which media and direct agencies better serve their clients' behaviour-changing agendas by adopting other business models.
These could further intertwine media and direct agencies without resorting to the classic full-on merger.
If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the Forum here.
This article was first published on campaignlive.co.uk
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