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Panel: Advertising Needs Bigger Dose of DM

David J. Murphy, president/CEO of Y&R Companies' Southern California operations, had an interesting idea: What would happen if every account in advertising were run on direct marketing principles?

After all, marketers try to reach audiences of one regardless of the media used, he told attendees at a recent roundtable organized by Y&R's Wunderman Irvine unit.

“We're still locked in silos: online versus offline, general versus CRM,” he said.

To that, a senior executive from Ford Motor Co.'s Land Rover division challenged agencies to adopt a more consumer-centric, integrated marketing model.

“I think agencies should realign themselves,” said Natalie Bow, relationship marketing manager at Land Rover.

Y&R might listen. It has all four parts of the prestigious Land Rover business — direct, interactive, general and retail advertising. But in keeping with most automakers' corporate structures, disparate communications exist for, say, the finance, retail or after-sales functions.

A major issue, even for an established online brand like Yahoo, is to get marketers and ad agencies to test new tactics or marketing tools.

“It's how to get agencies to get their clients to think out of the box,” said Lisa Nash, vice president of consumer and direct marketing at Yahoo.

That said, many of those who had gathered at the Four Seasons in Newport Beach, CA, acknowledged the DM challenges they face in the cluttered media environment.

“The mass-market advertising model has come to find itself without a mass market,” said Dan Olson, senior vice president and managing director of Wunderman Irvine and the roundtable host. “Consumers live and communicate in different and specific channels now more than any other place in history. A lasting recession has brought new pressures on advertising to be more accountable, to deliver better results on ever-increasing sales goals. Relationship marketing also has many challenges with issues such as cost and privacy.”

For some of those assembled, the problems were basic. For others, they were more complex.

Take Mazda. The company has 700 dealers nationwide. Each runs its own direct marketing programs. The challenge is to get the company and its retailers to view DM as a strategy, not a tactic.

“We have to continue to educate both our management and dealers about the fundamentals of direct marketing and how to track,” said David Sanabria, group manager for CRM and Internet at Mazda.

His colleague, Mazda interactive marketing manager Bill Ewing, was equally keen to know when to talk with customers and prospects, the appropriate offers and recognition and what to communicate.

“We want to know what dialogue will trigger future communications … what can we deliver at the right time to change their behavior?” Ewing said.

A senior executive at Ford's Lincoln Mercury worried that her division still relied on television.

“We need to internally focus on where to spend our marketing mix,” said Linda Perry-Lube, e-business and CRM manager at Lincoln Mercury. “But the reality is we need to be talking to our customers more one-to-one.”

Wunderman Irvine management supervisor Jason Maloney agreed. He stressed using direct response print and TV for their measurable qualities. The challenge is “maintaining that customer focus where it's so product-centric,” he said.

Even if that is achieved, there is always a tussle to balance the control that consumers want with the marketing persuasion to lead them to the desired action.

“Products become services if properly delivered,” said Lester Wunderman, founder of his self-named agency and chief guest at the roundtable.

For Erik Nielsen, vice president and management supervisor at Wunderman Irvine, the question of the moment is clear: “Where does the purchase decision lie?” he said.

Telemarketing usually thrusts people into making decisions. But with that tactic increasingly out of favor with consumers, marketers need another medium that offers similar, albeit slower, response to action.

“That decision space has migrated to the Internet,” Wunderman's Olson said, “so we need to better manage the information process.”

Ditech.com, a lending subsidiary of General Motors Corp. and not a Wunderman Irvine client, finds that the customer relationship is influenced by interaction with company staff. Essentially, Ditech's call center employees affect the next sale, said Sandra Ballard, director of marketing for direct response.

“When there's a lot of calls,” Ballard said, “it's more agents on the phone, and they become selective. When it's slower, customer service improves.”

Like many manufacturers, toy maker Mattel's issues are complex. Retailers control data on consumer purchases and often do not share information. Then there is optimization of the marketing budget: how to split the ad spend among product lines, media channels, tactics and markets?

Even more troubling, TV does not deliver as it did in the past, as a widening credibility gap is appearing with children and their parents.

“We're seeing a much higher level of skepticism in mass advertising, and this skepticism develops even at ages 5 or 6,” said Bob Aniello, a senior director of new media at Mattel.

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