The venture comes on the heels of an expected resurgence of direct-response advertising among marketers looking to create campaigns that are economical and efficient in a continuing sour economy.
"Advertisers now want to know exactly what their advertising is doing for them, and direct response gives them that," said John McNamara, president of Halogen and former senior VP-media director at MediaVest. "We have the tools to measure the effectiveness of advertising."
Halogen's clients include Capital One, Blue Cross California, Barbados Tourism, Touchstone Energy, Walt Disney World and AOL Canada. The shop has already participated in its first new-business presentation, helping its parent pitch in the $250 million Novartis media buying and planning review.
Total direct marketing expenditures (including any marketing that has a direct-response component, like direct-response TV or print ads and business-to-business ads) will be $196.8 billion in 2001, up from $189.9 billion in 2000, according to the Direct Marketing Association.
The increase from 2000 is "not a surprise when you look at history, because history has said the direct-to-consumer business seems to be a little bit more interruption-proof," in down economic times, said H. Robert Wientzen, Direct Marketing Association president. "If you look at the last two recessions in the mid `80s and early `90s, there's clearly a reduction in the growth of the direct-to-consumer business, but not nearly as significant as in bricks-and-mortar retail" and other forms of advertising, Mr. Wientzen added.
"There has been a growing momentum of shifting money to direct for the last five to six years," said Zenith Direct President Joe Shain. "It's been accelerating because of the need for efficiencies, accountability and measurability. And the failure of the Internet only reinforced the need for financially sound marketing, which has always been what direct marketing is all about."
Lately, media agencies have been addressing the demand for direct by launching specialized divisions. Earlier this year, Interpublic Group of Cos.' Initiative Media combined its direct response division IM Direct and its subsidiary Media Direct Partners to create IM2, a direct-response media buying and planning giant with $400 million in broadcast billings alone. Zenith Media, owned jointly by Publicis Groupe and Cordiant Communications Group, also this year created its own direct response unit, Zenith Direct, installing Mr. Shain, former president of SCP/ Rapp Collins Media, New York (AA, May 14).
Typically, direct-response media buying and planning services have been handled by direct-response creative shops such as Interpublic's DraftWorldwide, Omnicom Group's Rapp Collins Worldwide and WPP Group's Wunderman. Creating direct-response units within media agencies follows the trends of the last couple of years, and, according to Mr. McNamara and Mr. Shain, is a natural fit.
"We are so much more dependent on data, more than any other form of advertising because we are analyzing results on a daily basis, it is a logical place to reside," Mr. McNamara said.
"All of the research and technological support that only these big media shops can afford gives our clients on the direct side a tremendous advantage," Mr. Shain said. "We couldn't have a 15-person [information technology] department if we were under a separate umbrella.
"The economic downturn gives the TV universe a leg up for direct response, because we buy unsold inventory," Mr. Shain said. "And there's a truckload out there of unsold inventory right now. Most of the price points are not that high, they are not recession connected. [Direct] has always been somewhat countercyclical because we are buying remnant airtime."
Contributing: Cara B. DiPasquale