• by Lynn Russo , August 24, 2006

Clients want both niche experts and big-picture thinking, and agencies have had to adapt

Marketers today want it all. They want all their media measured, and they want to run awareness campaigns. They want to be involved in cutting-edge ideas and channels while sticking with the tried and true. They want a seamless approach to customer relationship management with no channel boundaries, but they want experts in every channel at their disposal.

And they want to be able to coordinate it all through one agency. Perhaps they began centralizing customer touchpoints under a single chief marketing officer several months ago and are just now beginning to see the strategy benefit their bottom line. So it's no wonder they expect, and in some cases demand, that their direct marketing agencies follow suit.

Direct agencies have seen the future, too  some of their own accord and some as a result of a client nudge. The earliest adopters include direct marketing agency Bronner Slosberg Humphrey, which became Digitas a few years ago. Two years ago, when Rueben Hendell left Digitas to become CEO of MRM Worldwide, he immediately merged the former direct marketing agency with its interactive sister Zentropy. But the trend turned into a paradigm shift during the last 12 months.

Last fall, Carat Direct and Carat Interactive merged to become Carat Fusion. In December 2005, direct marketer Wunderman hired its first "managing director of interactive." In early 2006, MRM Worldwide rebranded itself as an "integrated direct and interactive agency"; in April, direct marketing agency Draft and traditional agency FCB announced they would marry to become the Draft FCB Group; and in July, Wunderman shored up its interactive expertise with the purchase of the agency Zaaz. There are dozens more shifts like these underway in the agency world.

"Clients are looking for accountability and strategic insight, but they're not willing to sacrifice the big ideas," says Yvonne Furth, president and CEO of Draft Chicago. "They want both together. In the past, holding companies have offered up this solution for this discipline and that solution for that discipline; now it's truly channel-agnostic and it doesn't matter what the tactical execution is."

The restructuring, however, has been much more than simply putting the desks of direct and interactive folks together to foster tighter communication. These agencies' transitions have constituted nothing short of a complete metamorphosis.

"What we're seeing now is more integration and more collaboration than ever before, being pushed by our clients, who are realizing that it all has to be brought together  that it can't be separate," says Susan Rowe, executive vice president of integrated media for Carat Fusion, a position that was created specifically for the newly formed organization. The two agencies merged because, Rowe says, "We were speaking the same language. When we talked to clients, we were both using terms like 'ROI' and 'cost per.' The merging of the two entities has helped make a stronger 360-degree play."

The New Org Chart: Specialists and Generalists

The current centralized model requires agencies to have staffers who are channel-independent but who are at the same time experts in specific fields. Under the old Carat model, traditional direct marketing resided primarily in Chicago. Since the birth of Carat Fusion, the agency has been adding direct marketing expertise across the U.S. in offices that previously handled only interactive.

"We still have the engine  the buying piece  consolidated in Chicago. The planning piece has migrated out into the other offices, so there's someone in every office now who can speak to the concept of offline media," says Rowe.

One of the big concerns that clients have today is that "agencies don't maintain their expertise with this centralization model," says Hendell. "You run the risk of diluting your expertise in any one area and not being, for instance, the best direct marketer anymore. So we have some common areas for things like account management, project management, and analytics, but we have boutiques for the crafts like digital marketing, direct marketing, self-service, and Web development."

 Digitas is looking for "people who have a creative bent and inclination, and people who want to think outside the box and be innovative," says Carl Fremont, the agency's global head of media and digital channels. "Direct marketers, by their nature, tend to be very analytical. It serves us well and is still very important, but increasingly today's model calls upon new and innovative ways to communicate. I think it's the person  the spark and the energy they are providing  that is more important than where they went to school. It's the right brain and the left brain. It's not easy to find both, but those are the kind of people we want to bring on board."

Even specialists have to be knowledgeable in all areas. "It's a remarkable set of abilities that are needed," says Lincoln Bjorkman, executive creative director of Digitas, New York. "The kinds of skill sets and ways of thinking required today mean that everyone has to be able to wear 18 different hats. Today, the most valuable people are the most adaptable  the ones who can leverage it all and grow."

There is also much more collaboration and communication between and among departments and agencies than ever before. "Now, early in the process, a lot of people are at the table, not just with a big idea, but devising a much more cross-channel approach," says Bjorkman. "It's not that we didn't do it before, it's just that the relationships and kinds of conversations are different."

For instance, a few years ago, Bjorkman says it was unheard of for the creative team to bounce ideas off of media colleagues. Today, he says, "It's critical to have media folks in the room as we're developing ideas, because they're the most up-to-speed on what's innovative and sexy, and they can push us in different directions."

The relationship has gotten more collaborative between other agencies, too. "It used to be that we'd simply get together on a regular basis. Now, I have all those names and numbers in my cell phone. It's less formal, faster, and much more collaborative, whereas before we would simply receive direction, then act on it," Bjorkman explains.

At Digitas, creative, account, and media people are commingled by client team. "Then we try to spice it up by making sure that unexpected influencers and combinations happen," says Bjorkman. "In our process of evaluating people, we're constantly analyzing: Does this person need to be rotated, not just on a particular piece of business, but physically? We don't want this place to become static."

Some clients are looking to expand the centralized approach on a global scale. "With the knowledge from the data and the interactive technology to view the consumer experience and how consumers are responding, I think clients are understanding that we can localize to language and culture and [use the existing template] to generate efficiencies," says Tina Miletich, managing director of interactive for Wunderman, New York. At the same time, she adds, "We can maintain a consistent brand proposition and value worldwide, without rebuilding a localized effort."

More Transformation to Come

The purview of the interactive direct marketer includes traditional media, Carat Fusion's Rowe maintains. She is already responsible for on-demand television and satellite radio.

The telemarketing discipline is also shifting gears. "Telemarketing reports to me, where previously it was a standalone group," explains Wunderman's Miletich. To her, it makes perfect sense: "We now have to create dialogue with people through all these different devices and different technologies. Just like you'd give a telemarketer a script, it's the same kind of script with interactive technologies, except it's automated."

While there will still be room for stand-alone direct and digital agencies, they'll be niche players. Larger agencies will become more holistic and integrated in their offerings. They'll no longer think in terms of siloed direct or interactive marketing services, but instead will think strictly in terms of what's best for the customer, according to Bjorkman.