New media channels and data raise agency profits

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Brands and direct and digital marketers get candid about the challenges and opportunities
Brands and direct and digital marketers get candid about the challenges and opportunities

“We need to intersect and guide behavior along the new customer decision journey,” Boschetto says. “This new, actively engaged customer model balances all disciplines and practices in a channel-agnostic manner from advertising to direct, from social to retail activation, from online to offline.”

Data mining is key

At the center of this digital and offline marketing strategy is data mining. “We're seeing that the age of data-driven marketing has taken on a whole new velocity, driven in large part by the acceleration in digital media,” says Bryan Kennedy, CEO of Epsilon. “That has presented a lot of new challenges in thinking about attribution, budget allocation and optimization, and how to really engineer meaningful brand experiences for consumers in real time across both traditional and emerging channels.”

With so many different kinds of agencies coming together to create work in various channels, brands often have issues accurately crediting the channel that led to a conversion. While a mobile site may be the place a sale took place, a social media program or an insert media mailer may have been the driving force. Jim Kabakow, president and CEO of Media Horizons, Inc., says that one big challenge facing the industry today is “accurately attributing customers to the correct marketing channel that they were generated from.”

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While marketers are hungry for metrics, and digital channels present more ways to measure marketing efforts, too much data can be overwhelming. “One of the biggest challenges facing the direct marketing industry is the deluge of data,” OgilvyOne Worldwide's Fetherstonhaugh says. “Marketing data is ugly — it is unstructured and sourced from multiple places. It takes a lot to make it meaningful and relevant.”

To address these concerns, direct marketing agencies are focusing on database analysis as a business model. Big data is playing an important role, as marketers are looking for more ways to manage and evaluate the large amounts of information they have about their clients in a bid to send more meaningful and personalized messages across channels. Agencies including Epsilon, Merkle, Harte-Hanks and Acxiom, to name a few, are investing in infrastructure and database and call center tools, as well as digital marketing toolsets, in a move towards addressable advertising.

For Epsilon, it is important to invest in order to help the company grow to scale, since the agency has doubled its business in the last four years. Recently, Epsilon has focused on aligning its client services teams into highly focused industry verticals including auto, retail, CPG, financial services, healthcare, travel and hospitality, among others. “We've become increasingly focused on our product portfolio and the manner in which we configure those products into nimble vertical solution sets for our clients,” Kennedy says.

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