Customers add to agencies' duties

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Karen Menachof is chief client officer at Catalyst.
Karen Menachof is chief client officer at Catalyst.

Business has slowly picked up at direct marketing agencies over the past year, particularly as existing clients have boosted marketing spending or sought additional services from agency partners.

Digital marketing agency Digitas found its strongest business in the past year coming from existing clients that bolstered their budgets after cutting back in 2009.

“We won some 50 different brands around the world — a lot of good new business — but the bigger story was a lot of brands coming back to spending in 2010,” said Colin Kinsella, president of Digitas North America. “New business feels like it will be a bigger part of our growth in 2011.”

Digitas' clients were particularly interested in expanding their mobile and social media messaging, he added.

Karen Menachof, chief client officer at direct and digital agency Catalyst, said her agency earned new business from existing clients by emphasizing its expertise insight generation. It also highlighted its differences from other agencies to clients.

“Rather than talk about our capabilities or the services we can offer as an agency, we're really making the outreach more about the things that we know that are relevant to your business,” she said. “Often, agencies are not differentiated enough in a capabilities environment to stand out, so we focus on what we know and who really is going to value that.”

Agencies such as Createthe Group have also won business in new areas from existing clients. The agency, which oversees marketing strategy and creative for a number of high-end fashion brands, got new business last year from clients who wanted to expand their online offerings. For instance, it worked with fashion brands such as Donna Karan and Marc Jacobs on e-commerce for the first time. Euro RSCG also recently added mobile marketing responsibilities to its work with Sprint. The agency continues to handle direct and e-mail marketing
for Sprint.

A majority (60%) of agency principals told consultancy RSW/US in a December survey that they expect their clients to spend “somewhat” or “significantly” more in 2011.

However, agency leaders were also ambitious about new business, with more than three-quarters (77%) saying they will be “somewhat” or “much more” aggressive in seeking new business this year.

Trish Wheaton, CMO of Wunderman, said that her agency is seeing a mix of new and organically grown business. It is generating about 40% of its new business from existing clients and 60% from new clients globally.

“In some ways, the best new business is [the work] you get from existing clients — it's a validation of your value to them and it's also more profitable than net new because your people know that business,” said Wheaton.

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