BtoB

Marc USA merges DM, interactive

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Most advertising agencies' direct marketing and interactive divisions remain distinct, though both practices are rapidly becoming entwined. Pittsburgh-based Marc USA has established a new division, Marc USA Relationship Marketing, that officially marries the two.

"We're trying to be a complete resource," said Mark Graham, the unit's senior VP-direct marketing. "Companies are looking for one agency to offer both services."

Direct and interactive marketing are increasingly morphing, making Marc USA's move timely, said Heinrich Koenen, VP of The Masie Center, a Saratoga Springs, N.Y.-based technology think tank. "Whatever direct marketing print people are doing is referring back to the Web," Koenen said. "You'll see more of this. It's a perfect transition."

Marc USA Relationship Marketing bundles direct mail and interactive services that include database management, Web site development, online media planning and buying, creative development, and production and consulting services.

Built-in b-to-b

The division quietly launched in February with a stable of b-to-b customers that it inherited from its parent. These include financial powerhouses Bear Stearns & Co. and Mellon Financial Corp.; realcentric.com, a commercial real estate site under development; and Verio Inc., a Web hosting and e-business consulting company.

Marc USA Relationship is developing an offline and online direct marketing campaign for the asset management arm of Pittsburgh-based Mellon, one of the largest banks in the U.S. The campaign is aimed at institutional investors. Marc USA Relationship is doing basic work, such as identifying endowment funds, as well as handling direct mail and e-mail marketing efforts.

The division's work on behalf of realcentric.com also involves old and new direct marketing practices. It is helping build the start-up's site and tying in both traditional advertising and e-mail direct marketing programs, said Michael Korn, senior VP-interactive marketing. Marc USA is also advising realcentric.com on which prospects to send e-mails to and which to contact in person, Korn said.

Marc USA Relationship's execs decided not to look for new business and instead concentrate on the current roster, Graham said. Other clients include Cantor Fitzgerald L.P., a New York-based investment bank, and drugstore chain Rite Aid Corp.

The division will expand its staff from 15 to 30 in the coming year, Graham said. Marc USA has 450 employees in total. All of the division's employees are currently working in New York; within the next few months, some will be sent to Marc USA offices in Chicago, Dallas and Pittsburgh.

The unit has the potential to expand even further, as Marc USA plans to nearly double its offices, said Lee Brodie, director of corporate communications for the parent company. Marc USA also has offices in Miami, Indianapolis and Orlando, and plans to add additional ones in London, Boston, Seattle and either San Francisco or Los Angeles within the next 18 months.

Improved billings

With the expansion comes the expectation to make more money. Marc USA Relationship is on course to log $10 million in billings this year, Korn said. He predicted billings would jump to $20 million next year. Marc USA's annual billings are about $530 million.

Some direct marketing consultants question Marc USA Relationship's strategy.

Mixing old direct and new interactive marketing strategies, while popular, is tough to do, said Robert Hacker, president of The Hacker Group Ltd., a Bellevue, Wash., direct marketing agency. He also said that the advantage of doing so was overrated. "The last real major revolution in direct marketing was Gutenberg," he said.

Graham disagreed. "The convergence of direct and interactive is happening," he said. "We understand the broader issues."

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