It’s good to be well known. It’s better to be well known for being good. Direct marketing agencies have always put more faith in their ability to deliver results than in the reputation they have in the market.
But it doesn’t stop them wanting to be more famous. Recent years have seen DM agencies become much better at self-promotion, recognising that PR can often be the first step towards winning new business. With three-quarters of clients saying they are influenced by an agency’s own marketing, it’s evidently a good move.
The results of this year’s Marketing Week DM Agency Reputations Survey conducted in association with the Direct Marketing Association, suggest that the ability to deliver good results is finally translating into stronger reputations. At first glance, the top 20 may seem like a simple reshuffling of the same pack – there are only three new entrants. But a closer look reveals a more subtle story.
The peer group of agencies that would expect to be competing with each other is steadily climbing back up the table. Agencies that do not have DM at their heart are seeing their scores weaken. For instance, Triangle Group has not retained the number two position it won last year, dropping out of the top five for the first time in five years. Just outside the top 20, some of the most interesting and dynamic agencies are getting the recognition they have long been owed. The DM treadmill
That is good news given the relative lack of new business this year. “We have been running to stand still,” says TBWA/GGT chief executive Mike Cornwell. His agency is one of those reasserting itself in the survey, sitting just outside the top ten in 11th place. What could have been a far worse year was tempered by some important wins.
“We did have one bad bounce, which was losing the Vauxhall business after 14 years, on price,” he says. But TBWA/GGT won pan-European customer relationship management (CRM) work for Daewoo and the integrated account from the Newspaper Marketing Agency. Perhaps most significantly, it was appointed to launch Prudential Health.
“It means we are finally able to do everything, from brand television through every channel. We have done all of those things separately and severally on other accounts, but we have never got everything in one hit,” says Cornwell. It is recognition, perhaps, of the decade-long journey the agency has made, involving mergers between sales promotion, DM and advertising agencies. Clients have become more demanding of their agencies and less interested in such functional splits. Six out of ten say their DM agency also provides loyalty programmes, sales promotion, strategic consultancy and – most notably – media planning and buying services. Half also get customer relationship management and interactive services. Agencies that have expanded their remit are clearly being recognised for it.
Proximity London has achieved the rare feat of holding on to the number one spot for a second year. Chief executive Chris Thomas explains the achievement this way: “We set our standards high and never forget that there is always room for improvement, but no room for complacency.” The agency has been bedding in a new management team across planning, client services and new business. The pay-off has been organic growth from existing clients and a strong focus on international work, for clients such as Shell. Proximity is now active in 42 countries, a rare example of a recent rebranding successfully rolling out a network.
Creative recognition and awards have also helped its reputation. “The network came top of the first-ever Won Report, published this year, which was a great way to celebrate our creativity,” says Thomas. Digital work has featured strongly and the agency has also launched two new ventures, an experiential marketing operation called Proximity Live, and a joint venture production outfit, Proximity Works.
OgilvyOne was denied the top position in the survey by a whisker. But it has bucked the general industry trend, enjoying significant growth over the year, ending with about 60 extra staff to give it a headcount of more than 240. With some understatement, chairman Paul O’Donnell says: “It has been a pretty good year for us.”
Early in the year, the agency won the UK’s largest charity account from Cancer Research UK. This was a significant achievement, given the general perception of OgilvyOne’s strengths. “I’ve worked in charity before, but the agency has not worked in that sector recently. So it was nice to broaden our focus. We have been seen as chiefly business-to-business, because of our work for IBM, SAP and Cisco,” says O’Donnell.
This year the agency was handed the consolidated IBM account, and its CRM work across Europe for Cisco has been significant. “It has not been a fat year for the industry – we’ve been the strongest performer,” he says.
Clear proof that OgilvyOne’s reputation is a big draw for clients came when it won Mothercare’s business without a pitch. Coming highly recommended is clearly important to clients and must be gratifying for O’Donnell, who only became chairman a year ago.
Pitch less perfect
But it is still no easy thing to convert recommendations into new business. “In the old days, it only took one week from pitch to find out if you had an account. Now, you go through a seven-month, multi-stage process,” he says.
Where this year’s survey provides some real pointers is towards the line-up of next year’s top 20. For some time, the DM agencies most talked about in the industry have not gained the scores from clients they might expect. All this is about to change.
Leading the charge into the top 20 is Kitcatt Nohr Alexander Shaw, leaping to 19 from 31 last year. For an agency that is only three years old, that is a considerable achievement, especially as it kept a low profile in its first two years.
Managing director Marc Nohr believes the agency’s pitch record – 18 wins out of 21 pitches – is a major reason. “For a new agency, to have survived is an achievement. If you look at those agencies that launched at the same time as us, few have grown as we have. To have done so with such a pitch record – and such a solid financial performance – is even better,” he says.
Just behind, Publicis Dialog moves to the final place in the top 20 from 27th place last year, boosted by the DMA/Royal Mail Grand Prix for its work with The Depaul Trust. Harrison Troughton Wunderman gained a similar leg-up after winning five DMA awards. It is ranked 21st this year, having failed to register at all in the 2003 survey.
Craik Jones Watson Mitchell Voelkel has also come close to breaking through. It is rated 23rd, up from 36th the previous year, but still below the position it may have expected, following its recent success in winning Precision Marketing’s direct agency of the year award.
“In a tough year, we have stuck to the principle of delivering first-rate strategic and creative solutions to our clients. This focus seems to have paid off,” says managing director Fiona Scott. The agency has won more awards than any other, adding to its haul with seven this year, including a cocktail of gongs for work on Gordon’s Gin and Orange.
New staff have helped to sustain this focus, with a fresh creative team brought in from HWT and a boosting of the planning department. The agency got the year off to a dream start in January, when it won both Boots’ DM account and the acquisition and customer retention programme for Parcelforce Worldwide.
“It is important to note that digital strategy and communications were an integral part of all of these new business wins,” says Scott. She notes that instead of tactical work, which has been the main use of digital media to date, digital is now becoming an integral part of clients’ communications – and agencies need to take note.
The final sign of a breakthrough comes from perhaps the best-kept secret in the DM industry. Tullo Marshall Warren is one of the biggest independent agencies that has previously failed to register in the survey. At 14 years old, it has achieved its first ranking this year – at number 29.
Given its headcount of over 150, its previous low profile is remarkable. Client services director Richard Marshall says: “This has been one of the best years for wins. Clients have come in all shapes and sizes with 14 new client relationships formed, including VisitBritain, Lloyds TSB, Cadbury Schweppes and the Post Office.”
He adds: “It’s also been our best year for awards. We have been recognised by nearly 20 awards, including a Cannes Lion for our Guinness relationship marketing programme.” The agency has also restructured so its account teams now reflect four main client sectors.
This dynamism among the agencies just outside the top 20 – and the upwards movement of key players in the upper echelons – is an indicator that DM itself is in good health. And if there is one thing certain to cement an agency’s reputation in the current pressurised economic climate, it is the ability to deliver results.
Market Management Services interviewed a sample of 301 respondents chosen from Marketing Week‘s circulation list. To be eligible for inclusion in the survey, respondents had to be marketers with responsibility for selecting or reviewing a direct marketing agency – working within one of the UK’s top 500 spenders on advertising as measured by MMS.
Copies of the full survey are available at £95, including postage and packing, from Marva Hudson on 020 7970 6301.