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Survey: Lines Blur Between Direct, General Agencies

A new survey of advertising agencies and advertisers shows erosion between the roles of direct marketing and general agencies.

In the survey, 42 percent of direct marketing agencies and 48 percent of ad agencies agreed that the gap between brand and direct shops will continue to close over the next five years.

“I think it's good in that we have direct response agencies becoming more focused on how to manage brand with response-focused results,” said Warren Hunter, president of DMW, which funded the survey.

“It's also good that the general agencies are thinking about measured results to go with their branding,” Hunter said.

The survey found that only 29 percent of direct marketing agencies think their clients expect the same shop to handle both brand and direct. Fifty-one percent of general agencies think their clients expect them to do both.

“I think there are still going to be agencies that are known as response-building agencies and there are still going to be agencies known for their brand-building expertise,” Hunter said. “It's both an opportunity and a threat.”

The survey polled 1,500 clients, 800 ad leaders and 120 direct marketing agencies. It was conducted by market researcher IntelliSurvey and commissioned by the Direct Marketing Association's Direct Marketing Agency Council. Hunter is chairman of the council.

Larger advertisers — those with revenue of more than $100 million — saw more of a distinction between direct and general agencies than did small and mid-sized advertisers.

The survey also brought up the role of direct and general agencies in customer relationship management.

Fifty-eight percent of the big companies said they understood what CRM signified to their organization and marketing communications. But only 33 percent of direct agencies and 32 percent of general shops thought their clients clearly understood CRM.

There was a split in how CRM was perceived between direct and general agencies. Eighty-five percent of direct shops said their clients expect agencies to design, support or advance their CRM efforts. Only 43 percent of general agencies agreed with that, suggesting that general agencies do less CRM than their direct counterparts.

A big problem for direct agencies is their perception by clients, who do not see direct marketing as a specialized craft. Clients expect them to know everything about marketing.

Even more serious, it is harder to sell the concept of direct marketing to creative executives more interested in looks than response.

“Direct response agencies need to be certain that their clients don't give up actual bottom-line measured response in search of sexier brand-based ads,” Hunter said.

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