The pressure is now on direct marketing agencies to leverage their relative advantages. After all, to thrive—or even survive—in a prolonged downturn, they will need to stand out in a marketplace that offers clients more choices than ever before.
There is always the threat of clients moving previously outsourced tasks in-house in order to reduce costs.
According to a recent Association of National Advertisers (ANA) survey, 42% of respondents have established in-house advertising agencies. Of those, 66% use it for brand identity work, 65% for direct mail, 65% for Web site creation and maintenance, and 62% for banner ads and other online creative. The survey of 195 ANA members—including companies like Cisco Systems, Eastman Chemical Co. and Hewlett-Packard Co.—was conducted online in August.
As the lines between marketing disciplines continue to blur, direct marketers also face stiff competition from other types of agencies.
“Direct marketing agencies around the world are feeling the pinch because above-the-line agencies are moving into their space from one end and digital agencies are moving into it from the other,” said Patrick Collister, CEO of Stockbury, England-based Creative Matters consultancy and publisher of the annual “Won Report” roundup of the world's best directing marketing.
Megan Smith, a marketing consultant for Richards Relationship Marketing, said one-size-fits-all agencies could lead to a bad name for direct marketing specialists.
“It's causing [specialist] agencies to work harder to communicate the benefits of direct marketing and set themselves apart from the clutter,” she said.
But the most optimistic of direct marketers believe the returns their agencies deliver speak for themselves—especially in times of economic uncertainty.
“The marketplace has become more crowded,” Johnson said. “But those who can prove results will ultimately win and retain more business, while those who cannot will be out of business.” M