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DMA (UK) stalwart Wanda Goldwag's assertion about talent in the direct sector - that agencies are in the midst of a skirmish over skills with their more glamorous advertising counterparts - is echoed by experts keen to hear the industry being more proactive about extolling its virtues.

In a call for entries to the DMA Awards 2005, in association with Royal Mail (PM last week), chairman of the organising committee Goldwag stated: "Direct marketing is at risk of losing ownership of the skills that give it the edge over advertising agencies.

"Media fragmentation and eroding marketing budgets require the sector to fight off ad agencies that are laying claim to skills that we, as an industry, have developed."

Some observers claim the fight between direct and ad agencies is a long-standing one, and that the direct marketing formula needs to be reinvented to ensure the sector retains its share of clients' accolades.

Ben Stephens, managing partner of Stephens Francis Whitson - the direct shop backed by ad agency VCCP - believes the fundamental difference between direct and ad agencies is the way they view their work. He says: "Direct marketing agencies look at business in two ways: one is the creative job, and the other is the scientific task based around data and targeting.

"Direct marketers are so much closer to clients' businesses - what makes them tick and what makes money - than our advertising cousins."

Direct marketing has historically defined itself as a discipline involving responsive media that can track and measure campaigns. In contrast, as Goldwag puts it, ad agencies produce "beautiful, well-executed creative concepts, which are necessary, but totally immeasurable".

Yet things are changing. With the development of digital and interactive technology allowing measurable broadcast campaigns, the boundaries between advertising and direct marketing could become blurred.

Goldwag says: "Ad agencies are using targeting skills that direct marketers have always used. What we, as marketers, have learnt to do is keep a score, knowing who to target. People running email and SMS campaigns, and creating websites, are requiring these skills.

"Because so much money is being invested in online, big-brand ad agencies are now saying clients need creativity. However, that is not true, because a website is useless if no one visits it. Clients need to segment customers and target the right people."

But Hamish Pringle, director general of the Institute of Practitioners in Advertising (IPA), argues that targeting has always been on every agency's agenda, and does not exclusively relate to direct marketing. He comments: "Targeting has been around for many years, and ad agencies have always put great emphasis on customer identification and insight."

He concedes: "They generally haven't defined customer segments as minutely as direct marketers. And a huge difference is that direct marketing tracks responses in a way broadcast media advertising has been unable to do, until the advent of the digital, interactive era."

The digital world is posing an obvious threat to traditional direct marketing techniques. As Goldwag states: "There is a battleground, and direct marketers are clinging to their papers and catalogues, as so much work is moving online."

This battle could come to a swift end if Pringle's theory of the sectors merging proves correct. He says: "At the moment, there is a convergence between agencies that come from a direct marketing heritage, and those from the Internet space."

Pringle predicts that, in turn, the definition of direct marketing will change: "I believe we are seeing the convergence of brand and response advertising. Soon, there will be hardly any commercial communication that doesn't have a response mechanism of some sort.

"Historically, we have defined direct marketing as any communication with a response mechanism, but that definition is increasingly untenable with the rise of digital interactivity. It will mean that, ultimately, everything can be termed 'direct marketing'. I'm not sure how helpful that would be."

A major reason for this meeting of techniques is a shift in marketing budgets. The IPA's most recent Bellwether Report showed the growth in UK direct marketing expenditure has come to a halt, although it has escaped the widespread cuts that advertising budgets have recently suffered (PM July 22).

Goldwag argues budgets are now being ploughed into database development and online marketing. She notes that, in this frostier climate, ad agencies are promoting themselves as being able to provide all types of marketing - including direct - adding: "All marketing budgets are under pressure. Ad agencies are moving into our territory because that's where the budgets have been moving, not because they can do it better."

Pringle argues that, although direct shops do not lack expertise in data planning and targeting in the way ad agencies do, valuable case studies of direct marketing work are thin on the ground.

He comments: "For agencies with direct marketing expertise, demonstrating the effectiveness of campaigns should be a walk in the park, but, for reasons that cannot be explained, other than client confidentiality, there is an embarrassing lack of rigorous direct marketing case histories.

"While agencies with a heritage in broadcast media may currently lack expertise in data planning and mining, many of them have demonstrated great skill in proving effectiveness. It remains to be seen which camp will get to be great at both first."

Stephens agrees direct marketers need to become better at highlighting their assets. He states: "We're awful at describing the value we add."

According to Pringle, ad and direct agencies are inevitably going to continue to integrate to maximise their capabilities for clients. He says: "The key to an agency's future success will be its skill in managing the media communications mix. The holy grail is to understand the relationships between these different media and how to optimise their effectiveness."

Integration seems to be on many direct marketers' agendas. Simon Hall, partner at Hall Moore CHI, says: "Advertising versus direct marketing is an old argument. What's happening now is an integration battle. It's clear the agency model has to be reinvented. Everyone needs to focus on what the answer is and point in the same direction."

It may be that direct and ad agencies must agree to differ, and integrate to make ends meet in the future. But direct shops will need to ensure their voice does not get drowned out by the clamour of the advertising market.