Shops making the C in CRM stand for creative

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Direct marketing, known for its slicing and dicing of consumer data, so far hasn't been the birthplace of many Lee Clow-like figures. But as these agencies gain more notice and a larger share of marketers' budgets, they're putting more emphasis on something a lot more abstract: their creative capabilities.

A sign of the times is the high-concept makeover one Omnicom Group-owned agency is undergoing. This week, the nine-year-old direct marketing shop LLKFB will relaunch as Unit 7, a moniker inspired by a jazz tune made famous by Wes Montgomery.

In ditching a name based on the initials of its founding partners (something that sounds better suited to a law firm), Unit 7's executives are trying to add a rare bit of color to the rather gray landscape of direct-marketing agencies whose names tend to focus on their founders or a technical know-how, such as the quite plainly named Direct Marketing, Santa Monica, Calif., or MKTG Services, New York.

"In relationship marketing, the most important thing is bringing together the data analytics and the creative," said Loreen Babcock, chairman-CEO of Unit 7, and the last of the original partners still at the agency. "What people note about [the song] Unit 7 is that it's a collaboration of the lyrical and logical."

Throughout its history, the discipline of customer-relationship management has been best-known for its strength in collecting and analyzing consumer information that allows marketers targeted or one-on-one dialogues with them. In many ways, creativity, all important in general advertising agencies, has often taken a backseat, with direct-response ads often being more about the sales pitch than the creative content.

CREATIVE AT 30,000 FEET

That's now changing, as these agencies attract more talent with general agency experience. For instance, Publicis Groupe's marketing services agency Publicis Dialog, New York, brought in Ammirati Puris Lintas and Highway One-veteran Chris Matyszczyk for a newly created executive creative director role. "We need the ability to think of that 30,000-feet creative idea and execute it at all of the touchpoints," said Debbie Yount, the New York office's CEO.

An agency's knack for creating compelling content has become a point of differentiation. "The people who do this extremely well are those that combine the mathematics with a hot creative product," said consultant Jane Bedford, partner at Atlanta-based Bedford Group. "There's so much more competition now."

In recent years, direct marketing has boomed, as marketers are looking for more accountability and spending more time trying to determine return-on-investments. Within Omnicom, the largest marketing-agency holding company, CRM is outpacing traditional advertising. It's now responsible for more than a third of the company's revenue and it grew at a rate of 14% between 2003 and 2004. Advertising, though still the largest source of revenue by discipline, grew by only 11.4% over the same time period, according to the company's annual report. Moreover, many direct-marketing agencies have been successful in taking the marketing lead for a number of major corporations in a variety of categories, from financial services to travel and hospitality to retail.

That growth, Ms. Bedford said, means that CRM agencies are pitching more often to marketing executives when, in the past, executives from management information systems function were often in charge of database marketing. "They seem to be melding more because they understand all the interconnectedness," she said. "As a result, agencies are having to learn how to present themselves differently."

SCIENCE

Executives at Unit 7 and Omnicom hope that the new brand will allow them to better emphasize the agency's niche in developing consumer insights that stem from a fluency in behavioral sciences. Unit 7's agency reel, which includes work for MasterCard, Pfizer's Bextra and Sony, has qualities you wouldn't necessarily expect from direct-response ads-humor, drama, a sense of the brands the spots are promoting, as well science-grounded consumer insights. The agency often employs anthropologists, sociologists and linguists for planning purposes. And, they say, listening and responding to consumers will remain the bedrock of what the agency does.

"That's been our sweet spot-embedding behavioral sciences," said Mark Klapper, exec VP-director of planning and consulting services.

"The model is really bottom-line advertising," said Tom Harrison, chairman-CEO of Omnicom's Diversified Agency Services. "Every client wants return on investment."

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