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Senior VP- advertising and promotion Visa USA BRIDGING DISCIPLINES HOLDS HIGH ATTRACTION ONE-STOP SALES PROMO, DIRECT MARKETING SOUNDS SIMPLE, BUT SOME PITFALLS AWAIT

By Published on .

Do clients really want their direct marketing and sales promotion work done by a single agency?

Well, maybe.

The gradual melding of the two disciplines into a hybrid form of what some are calling "behavior" marketing has spurred several direct marketing agencies to offer promotional services, and vice versa.

Instead of pigeonholing assignments as one or the other, "People are defining the problem at a higher level," says Mitch Kurz, worldwide CEO of Wunderman Cato Johnson, itself the product of a 1992 merger between Young & Rubicam's Wunderman Worldwide direct shop and Cato Johnson promotion unit.

"In order to drive a client's business, if you're there for results you'd better be sure you're as open-minded as possible," he says.

In contrast to image advertising, which drives awareness and recall of a brand, both direct response and sales promotion stress their ability to demonstrably shift consumer behavior. So some advertisers contend that a single marketing services source ought to do both.

"Ideally, they should be handled in one place," says Jan Soderstrom, senior VP-advertising and promotion at Visa USA. "A lot crosses over in the sense of true integrated marketing. In some ways, I think of them interchangeably."

The lines blur most when direct marketing is seen as a medium instead of a marketing tool, and when brochures, coupons or other "collateral" work normally considered promotion are mailed to households or businesses.

Of course, there are vast differences between the two areas. Promotion is often a trade-support function, while direct marketing acts at the individual consumer level.

Much promotion aims for a short-term sales boost, using coupons, sampling and other incentives to jumpstart a brand, while direct marketing's goal is to build a dialog or relationship with consumers that weds them more closely to a product for the long haul.

As a result, direct marketers tend to be more skilled at the arcane science of regression analysis, segmenting databases, predicting response rates and homing in on finely tuned targets.

"There's a functional expertise that direct marketing brings that, in the past, promotion agencies have not had," says John Kuendig, VP-marketing development for Kraft General Foods. "To an extent, that's still true."

Mr. Kuendig says he'd prefer to work with a single supplier, but now uses Ogilvy & Mather Direct, New York, on direct marketing projects and several promotion agencies for promotional work.

"It's easier to manage one agency than it is to manage two or three different agencies on two or three different projects," he notes.

But the real issue in putting both eggs in a single basket is cost, says Mr. Kuendig.

"When you hire a direct marketing agency, you pay higher fees for their expertise. We need to find what added-value they can bring to justify that expense" on sales promotion work, he says.

Others say the issue is more rooted in politics.

"It's a real internal turf situation for a lot of corporations," says a marketing executive at a major beverage company.

Depending on a client's orientation-and his job title-interest in any form of below-the-line services can veer from brand-enhancing strategic moves to a quick-hit way to move cases off the shelves.

And balancing both goals at one agency is no easy task.

"It's far easier for a direct marketing agency to do promotion than it is for a promotion agency to do direct marketing, but both can do it," says the executive.

"The issue for clients tends to be, `Where are my relationships and what is my personal agenda?' and that's what confuses the issue," he continues.

"Some promotion firms can go into direct marketing and do a very good job, if they're willing to reorient their focus. Whether the client will let them is another story."

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