Integration key to success for leading direct agencies

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Ad agencies have developed many different organizational structures to handle direct marketing, from stand-alone units to fully integrated operations within their agencies. Some have acquired direct shops to gain resources, while others have combined direct marketing with interactive departments to realize operating efficiencies.

But regardless of the organizational structure, ad agency executives agree that direct must be closely aligned with other agency functions, including online and offline marketing, to create effective programs for clients in an increasingly connected world.

As Internet technology has evolved, allowing for interactive capabilities and one-to-one marketing, many agencies have put primary responsibility for direct and interactive into one business unit.

This is the case with Carat Interactive, OgilvyOne, MRM Partners and many other agencies on BtoB’s Top Direct Agency list.

The epicenter of direct

"Interactive is becoming the epicenter of direct," said Sarah Fay, president of Carat Interactive, which is part of media agency Carat North America, based in Boston.

Carat Interactive has a data analytics unit that compiles marketing data to use in both online and offline marketing programs. It creates direct programs in partnership with sister agency Carat Business & Technology, based in Boston, and the direct response broadcast practice that is part of Carat USA, based in Chicago. Carat Interactive’s direct clients include Microsoft Corp., Rational Software Corp., Hewlett-Packard Co., Intel Corp. and Palm.

"For the client, it feels like they’re working with one agency," Fay said.

OgilvyOne, which is a business unit of ad agency Ogilvy Worldwide, also has merged interactive with direct. In 1997, when Ogilvy & Mather Direct was renamed OgilvyOne, the interactive capabilities were brought into the group. The interactive unit, called OgilvyInteractive, was founded in 1984 as a think tank for emerging technologies, including CD-ROM, the Internet and virtual private networks.

"We realized the convergence of offline direct with online was going to change everything, and we really should bring it together," said Carla Hendra, president of OgilvyOne.

While interactive and direct work are handled by OgilvyOne, the two disciplines are closely integrated with brand strategy and overall marketing efforts at the parent agency when it comes to working with clients, which include IBM Corp., American Express Co. and Cisco Systems.

"The ad agency used to concern itself with the brand idea, and [OgilvyOne] used to be concerned with direct and interactive," Hendra said. "Now it’s done on a much more integrated basis.

"We sit together and set brand ambition and business ambition for the client," she said, referring to strategic planning that is conducted with sister ad agency Ogilvy & Mather New York.

Another agency that has combined direct with some interactive capabilities is MRM Partners Worldwide, part of McCann-Erickson WorldGroup.

MRM Partners was founded in 1985 with McCann’s acquisition of March Advertising and Direct Marketing, which was renamed McCann Direct. McCann Direct became McCann Relationship Marketing in 1997, then MRM Partners in 2001 when it merged with Zentropy Partners. The agency handles direct mail, e-marketing, Web development and CRM.

For clients such as Microsoft,
Advanced Micro Devices and Applied Materials, MRM account planners work closely with their peers at McCann-Erickson to develop an integrated marketing strategy including online, offline, direct and CRM.

"In the area of direct marketing, we all believe that integration will give better results," said Michael Gould, president-CEO of MRM Partners. "Our job is to take the initial attitudes formed by advertising and bring them out into actual relationships."

Gould said MRM takes advantage of the broad air cover provided by ad campaigns and large media buys—done by McCann-Erickson and its media-buying sibling agency Universal McCann—and creates direct marketing, e-marketing and CRM programs to create a seamless experience for customers.

Even agencies that have separate units for direct, interactive and other disciplines agree that integration among the units is essential to creating effective marketing campaigns for clients.

Take Grey Direct. The agency is a wholly owned subsidiary of Grey Global Group, an agency holding company that has separate subsidiaries for direct, interactive (Grey Interactive), advertising (Grey Worldwide) and media services (Mediacom).

The philosophy behind the structure is to provide one leading company in each communications discipline, each specializing in its own particular area while being able to draw on the strengths of the other units, said Larry Kimmel, chairman-CEO of Grey Direct.

"Five years ago, I would have said that integration is hugely problematic, because not enough people had a large enough appreciation for the value of the other disciplines," Kimmel said. "Today, people have become savvy enough to understand the relative strengths of the various disciplines."

Kimmel added: "You’d better be operating on all cylinders and working synergistically."

Another agency that has an integrated model is Draft Worldwide, which handles direct marketing, promotions and integrated marketing. Draft started out as a direct agency in 1978, then acquired sweepstakes and promotions company D.L. Blair and ad agency Adler Boschetto Peebles & Partners, both in 1997.

"We don’t differentiate the units within the agency," said Howard Draft, chairman-CEO of Draft. "Our model is to be fully integrated in direct, promotions and integrated marketing."

Draft’s account teams are set up with a senior account leader, promotions people, digital marketing experts and other discipline specialists.

"We approach it as a media-neutral solution for our clients," Draft said.

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