I echo the views of Martin Hamish of the IPA following the news that Thomas Cook are to demand a ’signing on fee’ to the lucky agency who wins their business. The word Martin chose was ‘outrageous’ which pretty much reflects the views of most of our clients, who are typically creative, marketing and communications agencies.

This attitude of large brands and advertisers is having a major impact on the agency world and is one of the main reasons why we recommend getting our agencies ‘under the radar’.

This approach avoids the pain, expense and stretched resources of procurement and pitching which frankly most agencies can do without, particularly in this climate.

“Who does a CEO call first in crisis? Now it’s the PR” (Evening Standard 15th March 2010)

This article highlights the renaissance of the PR industry as it has bucked the trend of depleted budgets and spending during the recession. Chime Communications has recently unveiled a 15% increase in profits and Martin Sorrell concurs with the uplift, emphasising the rise in financial importance of his portfolio of PR agencies.

Undoubtedly, there has been, as the article explains, an increase in the importance of PR for corporations and high-profile individuals. Danny Rogers of PR Week (as he should) believes the discipline has “moved up the food chain” over the past 5 years. We would agree. Ten years ago, a high proportion of the Alchemis client base consisted of PR agencies of varying size, stature and sector experience. Since then we have seen a marked dip in the number of clients in this industry, and it has been a much smaller proportion of our turnover for some time. Whereas we used to work in financial, corporate, technology, manufacturing and pharmaceutical markets, more recent PR clients have been consumer focused and even here, it has been a tough environment to be working and driving business development. However, I believe the recession has helped the PR industry. Agencies are often viewed as a cost effective alternative to advertising and we have seen this, with several PR clients in varying markets enjoying successful new business campaigns over the past 12 months.

This perceived cost benefit is just one side of the coin. More importantly, corporate reputations are far more fragile with the rise of the internet, digital media and almost instant worldwide coverage. PR agencies have adapted in recent years to embrace a digital offer. Whilst a reputation can be damaged at the click of a mouse button, they can also be protected and enhanced. PR agencies that will survive and thrive will understand the importance of the digital space and be equipped to use it to good effect for their clients.

What is very interesting from a new business agency perspective is the identification that, despite prominent PR agencies being full of talent, the power and hence profits remain with the founders. This, Rogers believes, will result in the emergence of many breakaway agencies. I believe that this has always been the case to a degree as we have worked with many PR agency start-ups utilising that “big agency” experience as a key selling point. Additional agencies entering the market should only be positive news for a specialist business development agency such as Alchemis. We have always built strong relationships with PR people who tend to be extremely loyal taking us from agency to agency throughout their careers. The offers are diverse and the very nature of the discipline lends itself to more in-depth, engaging and interesting conversations for our New Business Managers. Not every sales person “gets” how to sell PR as it is not as tangible or quantifiable as other disciplines, but we have a real heritage in the area and a bank of highly capable people ready to fill a PR gap in their client portfolios.

Anthony Miller wrote a great article on the Brand Republic website on the 18th March which addressed the research done by academics at Bangor University to determine if the brain acts differently to marketing messages delivered through direct mail in comparison to those shown on screen.

From what he’s written it appears that direct mail enhances a brand’s value for a number of reasons including:

• When a piece of DM was held and read by a participant, their reactions suggested that they were experiencing thought patterns similar to those the brain exhibits when processing memories and emotions.
• It appears easier for the brain to process messages from tangible direct mail compared to digital marketing material, and subsequently easier to remember.
• When asked to keep or discard items, the physical direct mail provoked activity in the right-middle cingulate, a region of the brain that is associated with decision-making connected to emotions and social issues. Therefore the research suggests that direct mail has links to emotion-based decision-making.

Did I mention that the research was funded by Royal Mail by the way? No? Well it is.

However, cynicism aside, I thought about our own experiences between the incoming new business enquiries we generate through a result of our direct mail and email campaigns.

For the most part, our direct mail follows a very simple formula. It tends to be very short (usually no more than a few sentences) with a prompt for action at the end. And, like Marmite, people tend to either love it or hate it. But either way, most of the people who we speak to when we follow up the campaigns by phone (that is our rasion d’etre after all) have one thing in common – and that is they remember it.

I weighed up the pros and cons of the campaigns we sent by post and email and this is how they stacked up:

Email costs next to nothing to send and you can be reasonably sure that, providing you have the correct address in the first place, it is going directly to the in-box of your intended recipient. On top of this, the functionality that exists with our email marketing system allow us to see specifically who has opened it, who has clicked on a link, who has forwarded it, who has deleted without opening, etc. This gives us extremely valuable insight and allows follow-up calls to be targeted to recipients that are most likely to have an interest, even if they didn’t respond directly to the email.

Direct mail by comparison is much more expensive. Paper costs, printing costs, postage costs, the time involved in folding and stuffing, environmentally less friendly and after all that you can never be 100% sure that your intended target received it. Maybe after all the thought, time and effort that went into sending it, some vindictive PA intercepted it and binned it (no doubt a Marmite-hater) before the MD of The Jolly Nice Potential Client To Have Agency got to see it. Or maybe the postman delivered it to the wrong building, which – given the amount of post we get delivered here which is clearly marked for various other addresses – is a very real possibility. Or perhaps Royal Mail were just on strike again.

However, despite the pitfalls in the postal system, a very significant proportion of new business that we win has started with a response to a mailer. And this trend hasn’t shown any real sign of decline, despite our increasing use of email marketing in tandem with direct mail.

Now, I’m no scientist so I don’t know what part of my brain is being activated between the time it takes me to open any direct mail addressed to me and the time it takes me to throw it in the recycle bin 15 feet away from my desk. What I do know that in that time I will have glanced at it for a few seconds and those few seconds need to get the sender’s message across effectively, thus saving it from the bin. So if this applies to me, I’m sure the same rules apply to the very busy people we send Alchemis mailers to. Once you’ve opened the letter, you can’t help seeing the whole page. And if there’s not much on that page aside from one reason why it may be of benefit to you to respond, you could easily end up “accidentally” reading it even if you don’t want to.

The sheer volume of e-marketing shots I receive on the other hand may not even get a few seconds of my time. If the subject line doesn’t instantly grab my interest it’s likely to be deleted unread. If the sender is a company rather than a person, chances are I’ll assume it’s spam of some sort.

So what does the future hold for both mediums?

As far as we’re concerned we’ll continue using both direct mail and e-marketing campaigns whilst they are producing a decent return on investment, but the primary focus will always be on picking up the phone to demonstrate first hand to prospects our amazing telephone marketing skills. After all, you’ve got to practice what you preach.