Media companies claim no conflict as they expand into traditional-agency territory
Meredith Corp.'s acquisition last month of two marketing communications agencies is the latest sign that publishers are offering more integrated marketing services to clients as well as building out divisions that can help them diversify to create new revenue opportunities.
Last month, Meredith announced the acquisition of Genex, an interactive marketing agency, and New Media Strategies, an interactive word-of-mouth marketing company. Financial terms of the deals were not disclosed.
The acquisitions follow the media company's purchase last year of O'Grady Meyers, an interactive marketing services firm, and will strengthen its Meredith Integrated Marketing division, which provides custom publishing and online communications services to clients.
While Meredith is predominantly a b-to-c publisher, with titles including Better Homes and Gardens, Family Circle and Ladies' Home Journal, it also publishes b-to-b magazines, including Successful Farming and Wood.
Other b-to-b publishers, including Hanley Wood and Meister Media, have created marketing services divisions through acquisitions, offering services such as Web site design, custom publishing, creative development and public relations.
More of a consultancy
"A number of companies are doing this," said Gordon Hughes II, president-CEO of American Business Media. "They are becoming more of a consultancy practice to help their customers talk to their customers better."
The ABM will be addressing this topic at its May meeting in Naples, Fla., during a session on transforming business and customer relationships.
Publishers that have formed marketing divisions say their objective is to offer clients value-added services while working with the clients' agency partners to address business objectives.
"These three acquisitions fit very nicely into our strategy of providing offline and online customer relationship marketing solutions to our clients," said John Zieser, chief development officer at Meredith.
Meredith Integrated Marketing's clients include Century 21, DaimlerChrysler, DirecTV and Hyundai Motor Co. The acquisitions will add AT&T, Citigroup, Ford Motor Co., Sony Corp. and Unilever.
Zieser emphasized that the company is not trying to become a traditional ad agency.
"One objective of our business model is to take our existing client base and sell online CRM services into that client base," he said. "The other is, these new businesses have clients that we have not had who are likely looking for offline and database services that we can offer."
Specifically, Meredith Integrated Marketing will work with b-to-b and b-to-c clients to develop Web sites, online marketing campaigns, digital communities, word-of-mouth campaigns, database marketing programs and other marketing communications services.
It will not provide media buying services, Zieser said, therefore avoiding any potential conflict of interest that could arise from placing ads in competing media properties.
"The bottom line is what serves the customer best," he said.
Hanley Wood offers integrated marketing services to clients through its Hanley Wood Marketing division.
The division was formed in 1995 following Hanley Wood's acquisition of Wells Group, a Minneapolis-based marketing communications agency that specialized in custom publishing and marketing communications.
The division offers a full slate of marketing services, including advertising, brand strategy, custom publishing, direct marketing, Web site development and events.
"We are very much a traditional marketing agency and we have our own set of clients," said Neal Kielar, VP-business development at Hanley Wood Marketing.
Unlike Meredith Integrated Marketing, which focuses more on customer relationship and database marketing programs, Hanley Wood Marketing offers more front-end marketing services, including advertising creative and even media buying through an independent agency.
Kielar said this does not pose a conflict of interest. "All the media buys are strategic and driven by client objectives," he said. "If we're doing work in the building and construction industry, the campaigns could run in Hanley Wood vehicles or other vehicles. We're here to do what is best for the client."
While Hanley Wood Business Media, the content arm of Hanley Wood, is heavily geared toward the building and construction industry, Hanley Wood Marketing serves clients in a variety of industries, including telecommunications, financial services, shipping and logistics, and business professional services. Building and construction clients represent about 20% of its total client base.
Agricultural publisher Meister Media Worldwide also has a marketing services division, formed when it acquired Clear Window MultiMedia in 2000.
Clear Window MultiMedia was an independent agency that provided public relations, custom publishing and other marketing communications services to the agriculture industry. It now operates as a division of Meister.
"[Chairman Emeritus] Richard Meister and [Chairman-CEO] Gary Fitzgerald felt like it was time for Meister to put some effort into building an integrated media business," said Elliot Nowels, VP-business development at Meister and director of Clear Window MultiMedia. Nowels founded Clear Window in Chicago in the early 1980s.
"Increasingly, more clients are coming to us with issues they have and problems they need solved, and we can't go back to them with a simple ad in a magazine," he said.
Clear Window provides Web site design, awards programs, e-newsletters, promotions and other marketing services.
"We are not competing with ad agencies," Nowels said, noting that the division works with clients and their agencies to develop integrated campaigns to solve specific business problems. For example, Clear Window developed a program called "Total Weed Management" for client Monsanto Co., including custom print pieces and a series of regional seminars.
For client Dupont, Clear Window created the Environmental Respect Awards, an international awards program that recognizes farm supply companies for environmental stewardship.