Close-Up: How will the future DM agency look?

Direct agencies are trying to introduce 'big thinking' alongside their data skills.

If digital agencies have spent the past few years reminding clients that they can do far more than just build a website, then direct marketing agencies have spent even longer reiterating that they are not limited to stuffing envelopes.

And as times have changed and clients have begun to demand stronger proof of ROI and require better one-to-one communication with consumers, this should be the perfect opportunity for direct marketing agencies to position themselves slap-bang at the centre of the marketing mix.

"Direct has gone mainstream," Marc Nohr, a founder of Kitcatt Nohr Alexander Shaw, says. "While it was highly innovative 15 years ago for a brand to ask for a customer response, it's the first requirement now."

The problem, though, is that traditional direct marketing agencies have ultimately failed to take full advantage of these developments.

"The big direct agencies should now be the main players, but they seem to have been slow to grow and adapt and are consequently still in most cases playing second fiddle to ad agencies on a client's advertising roster," one direct marketing agency head says.

To combat this, we are now seeing some direct marketing agencies making a host of important changes.

One such agency is Elvis, which last week announced a new management line-up - including the appointments of MCBD's vice-chairman, David Bainbridge, as joint chief executive and its planning director, Carl Ratcliff, as executive planning director.

"The role of DM agencies is changing," Martin Semmens, the Elvis founder, says. "Because you're dealing with data, you have the power to change a client's entire business for them, so you need to put yourself in a position that can accommodate that."

By hiring an experienced account man in Bainbridge, one thing Elvis aims to do is build stronger client relationships, and this, Semmens says, is key: "DM agencies are in danger of being left behind because they've rarely held strong relationships with those people at the very top of a client's business - it's usually the traditional ad agencies that have done that best. But if we're really serious about being a business partner, then you need people who can build those relationships at the very top table too."

The appointment of Ratcliff is a conscious decision by Elvis to also give planning a more important role in the agency's offering - a smart move, according to the Archibald Ingall Stretton founder Steve Stretton, who says it's this area in particular that has let other direct marketing agencies down in the past. "If there's one place that DM suffers compared with the ad agencies, it's in the perceived lack of big thinking," he says. "This is a legacy from the days when planners in DM agencies were more aligned to data than the strategic brand overview. That's why they need to get proper planners at the top."

And if direct marketing agencies are going to make a stronger play for a more prominent position in a brand's marketing mix, they also must ensure that they are able to deliver these "big ideas".

Jonathan Harman, the EMEA president of Carlson Marketing, says: "I can see more agencies investing heavily in creative technologists in particular. It's all very well having the data and strategic insight, but you must make sure that you have the creative and technological capabilities to use that data meaningfully."

DM AGENCY HEAD - Martin Semmens, founder, Elvis

"Agencies that own and understand a brand's data will be the ones that can tell a client exactly where it needs to go next. It's not about trying to muscle in on ad agencies' territory, it's about taking the initiative and doing what's right for a client's business.

"But then you also have to be able to deliver. You need to have the ability in-house to solve the problems, and you need to have a strong relationship with the clients themselves so that they trust you as a business partner rather than just seeing you as someone who can do a nice pretty campaign for them."

DM AGENCY HEAD - Steve Stretton, founder, Archibald Ingall Stretton

"The future is partly determined by your digital reputation and capability. Many DM agencies repositioned themselves as 'integrated' a few years ago and nearly all of these shops were early adopters of digital.

"This is because, in the early days, digital was seen as the ultimate demonstration of one-on-one communications.

"But now marketing is harder than ever - the choices are greater and marketing departments are getting smaller. So clients also need knowledge. They need strategic help. So the next key relationship to develop is between client and planner."

DM AGENCY HEAD - Marc Nohr, founder, Kitcatt Nohr Alexander Shaw

"This is a really exciting time for DM agencies - the advertising mix has been slowly changing for a long time now and it's no longer the traditional ad agencies that are naturally commanding the advertising dollars.

"What will it take for DM agencies to prevail in the future? They'll need strategic prowess to make client partnerships thrive, they'll need creative prowess to demonstrate they're comfortable to implement campaigns across all media and they'll need data prowess to understand customers on a one-to-one level so that they can prove that what they're doing is working. And in the current climate, that in particular is more important than ever."

DM AGENCY HEAD - Annette King, chief executive, OgilvyOne London

"The DM agency of the future needs to keep data at its heart, as if you have a robust data offering, you have more chance to really influence a client's business.

"And whereas in the past a marketing director's career was usually dependent on a big ad campaign - meaning they've tended to build stronger relationships with ad agencies - they're now having to embrace data more as more pressure is on them to solve specific business problems.

"We can also capitalise on this by building stronger relationships with marketing directors, something I think historically a lot of DM agencies have been afraid or unsure how to do."

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