Special Report, Direct Marketing: charting the route to integration

LONDON - Traditionally, ad agencies brand-build while direct specialists acquire and retain customers. However, as more marketers assign direct agencies to multi-faceted briefs, the tide may be turning.

Building a brand is a many-sided challenge. Not only must a product's performance match its advertising promise, but the brand must also project a consistent image through every touchpoint it has with consumers.

From TV ad campaigns and direct mail packs to its presence in stores and on the web, the brand must send out the right message. Creating a truly joined-up marketing campaign is therefore the ultimate challenge for any marketer.

The campaign has to do two jobs. First, it needs to raise awareness of the brand and promote its promise, usually through above-the-line advertising.

Second, the campaign must also close the sale and get consumers to sign on the dotted line, which is often the main task of direct marketing. These are age-old issues for marketers, but they remain as pertinent today as they were two decades ago.

However, over the past year, brand owners have been forced to look afresh at the possibilities of using direct marketing to build brands.

Mike Welsh, chief executive of Publicis Dialog, says: 'I've been in half a dozen meetings recently where clients have said, Â "We haven't got the budget we'd like, so everything has to do two jobs, promotional selling and brand-building." Clients are forced to think holistically about the role of direct marketing, because they haven't got the money for the brand-building job.'

He believes that direct marketing is 'absolutely up to the task' of building brands, but thinks that the big question is whether direct marketing agencies themselves are up to the job.

'They need to employ people who think beyond the coupon, who want more than just getting visits to websites,' he says. Employing a mix of staff with experience of advertising and direct marketing is therefore essential, he adds.

For years, direct marketing and advertising agencies have billed themselves as 'integrated shops' capable of fulfilling the different areas of marketing. However, the reality is that marketers have often balked at the idea of hiring agencies that claim they can do everything, preferring to appoint separate above- and below-the-line specialists, a trend exacerbated by the fact that many brands have separate CRM departments.

The rise of online marketing has further muddied the waters. The web is an effective tool for eliciting response and sign-up, and its advocates claim it also works as a brand-building tool. Yet the question remains as to whether brands need specialised digital agencies, or whether their direct marketing agencies can do the job equally well.

An example of a brand that has used a single agency to create its above- and below-the-line communications is Greenbee. The online home-and motor- insurance operation launched by John Lewis at the end of 2007 uses agency Partners Andrews Aldridge.

The service originally promoted itself to John Lewis customers in stores and through inserts sent out with the retailer's Partner-ship store card information to 750,000 customers. However, it seems this direct approach alone was not enough and the brand was relaunched this June.

'To achieve the growth we needed, we had to be more creative and look at many channels,' says brand and planning manager Nick White, who joined Greenbee in January from The Daily Tele-graph. 'We did the first above-the-line test this June and used the full marketing mix, with a two-week outdoor and radio cam-paign and a sponsorship on Classic FM. The relaunch has gone well. We had a record week in October, and experienced a 50% uplift in sales in the 10 weeks after the relaunch, compared with the 10 weeks before it.'

Along with the above-the-line work, the brand ran an online search campaign and online display ads as well as under-taking direct mail, door-drop and magazine insert activity.

'The campaign was totally integrated,' says White. 'The brief was to achieve response, not to be a fluffy campaign without a call to action. The direct marketing operated beneath the above-the-line campaign. It's about multi-channel integration.' 

Other brands have pursued this through-the-line approach, with the AA a notable example, in its campaign through integrated agency MBA.

However, many of the biggest brands have yet to be persuaded to put all their eggs into one agency basket.

BT, for example, says it believes that specialist agencies are best-placed to create campaigns in different media. Nonetheless, its ad agency, Abbott Mead Vickers BBDO, also handles its digital work, suggesting that it, too, is following the trend toward greater integration (see box).

The way agencies structure themselves, then, will be crucial in persuading marketers to hire them for integrated campaigns.

Phil Andrews, chief executive of Partners Andrews Aldridge, believes that marketing communications agencies are morphing into integrated shops. 'The fate of the advertising agency model is looking questionable, and the old model is starting to change,' he says. 'Ad agencies will still exist, but they are embracing new skills and employing people from other disciplines.'

Agency groups are still exploring the best model to deliver integrated campaigns that mix response with branding. Partners Andrews Aldridge is part of the Engine Group, which owns agencies across a variety of marketing disciplines, including advertising, PR, direct marketing and digital.

'You need to be able to integrate when it comes to planning and strategy, but you still have to have a depth of specialisation,' says Andrews. 'The problem of the generalised ad agency model is that you lack the specialisation of CRM and direct-response activity.'

A further problem, he argues, is that since brand-owning companies are still structured in silos, agencies tend to mirror that in their own structural set-up.

Online marketing is another medium in which marketers must ensure that the brand message is fully integrated with other parts of the mix. However, it too presents challenges.

Tony Spong, business director at the AAR, which matches advertisers with agencies, says: 'A problem with email marketing is that, because it is so cheap, brands often over-use it, and end up ignored because they send out too many communications. Volume is eroding value, and response rates are going down.' Spong adds that he believes brands are wising up to the drawbacks of high-volume direct campaigns, citing budget airline easyJet as one brand that has lowered its email communication volumes.

Some are dismissive of the debate over integration, believing the whole issue to have been settled years ago.

'The idea that channels perform different tasks is a thing of the past,' says Brendan Tansey, chief executive of Wunderman. 'A letter from a company colours our opinion of it as surely as a TV ad. What we read on forums, or how we deal with the call centre, can seal the deal.' He adds that the purported divide between above-the-line and below-the-line marketing is an illusion, which the web has exploded.

However, many agencies still promote themselves as integrated or 'communication neutral', as if differentiation remains.

'Traditional direct marketing channels can certainly play a role in brand-building, but this is not their main purpose,' says Tony Mooney, managing director of Experian Integrated Marketing. 'You would usually use them as collateral to help build a brand, rather than the main process.'

Tracey Barber, group marketing director of EHS Brann adds: 'Can direct marketing help build brands? Unquestionably. How-ever, there lies a danger in following the look and feel of an above-the-line campaign without understanding that each agency and channel has a role to play in delivering the overall manifestation of the brand.'

Ultimately, how marketers approach their campaigns must be dictated both by their goals and budget. Communications agencies are struggling to find the best way to create an integrated offer and capture as much of a brand's marketing spend as possible.

While some brands jump at the ease and simplicity of using a single communications point for all their work, many marketers believe they can achieve better value and superior performance by opting for separate specialists from each discipline.

BT: the direct effect

Matthew Dearden , former marketer at Telewest and Procter & Gamble, now retail marketing director, BT

'At BT, our direct marketing mainly aims to explain to customers why a certain product is better than the competition.

Direct mail allows you to give greater detail about products and services when there is a complex message you need to convey.

The joy of most direct media is that you can clearly measure how much they drive sales or action.

We use it as a direct-response medium, which we can measure with ease, as well as optimising very hard.

We are very data-driven, and a lot of our activity varies according to the campaign. Our direct marketing works better when the message is consistent with the TV advertising.

When we have a holistic campaign we know it performs better. That doesn't necessarily mean that the campaigns look identical, but we bring it to life in the best possible way.

Some people say that integration means every-thing must be executionally identical, but if you do that, you don't make the most of each medium. We don't use Kris Marshall, the star of the TV ads, in our direct mail. If you force the TV creative into the direct mail and it doesn't work, you end up with nothing but a smiling mugshot of an actor.

We work with separate agencies to ensure we get the best from each in their areas of expertise. We use Abbott Mead Vickers BBDO for above-the-line and digital work, and Ogilvy One for direct marketing.

Direct and above-the-line require very different kinds of creativity. In general, we have found agency teams to be great at one, but not necessarily at the other.'



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