The company's effort to build out its marketing services reached a new level last April, when Meredith bought the interactive agency O'Grady Meyers. Now New Media Strategies, Genex and O'Grady are all units of Meredith Integrated Marketing, which has offered database, customer relationship and other services to clients such as Procter & Gamble Co., Home Depot and DaimlerChrysler for about 10 years. Terms of the two deals were not disclosed.
Keeping up with digital
"In the past couple of years in particular, as the digital world has exploded, we have equipped ourselves to serve our clients online and offline," said Jack Griffin, president, Meredith Publishing Group. "It's not only the kind of talent that we've hired and the clients that have also sought us out, but the acquisition of O'Grady, which was one piece of the puzzle. Genex and New Media Strategies are other pieces.
"What we're doing," Mr. Griffin added, "is equipping Meredith Integrated Marketing to be a robust marketing-communications provider."
Expect more deals of this kind, said Seth Alpert, managing director, AdMedia Partners, which handled the sale of each agency to Meredith. "The internet changes everything," he said. "In a domain like the internet -- which is rapidly evolving, changing dynamically and still in a very formative or amorphous state -- the opportunity and the temptation to grow the relationship with the advertisers is more compelling than it ever would have been in the offline world.
"I'm not really going to speculate about who's next," Mr. Alpert added, "but I do think that this is a pair of transactions that is going to have a lot of people in media companies thinking 'What is this strategy?' and 'Should we be considering it?'"
Growing other revenue streams
Big media sellers frequently maintain a suite of agency-like services for clients -- custom-publishing operations are a common example -- but do not typically develop or buy actual agencies. The move by Meredith, a TV broadcaster and book and magazine publisher, coincides with uneven growth at some of its traditional products. The relatively young More, for example, grew ad pages by 12.8% in 2006, Ladies' Home Journal, finished flat while Better Homes & Gardens lost 8.2%, according to the Publishers Information Bureau. While Meredith Integrated Marketing has been around for a decade, the bulk of Meredith's revenue still comes from its publishing division.
Another publisher that could be headed down a similar path is Reader's Digest Association. In November, a group of investors led by Ripplewood Holdings struck a deal to buy Reader's Digest Association for about $2.4 billion including the assumption of debt. The goal is to close the deal in the first quarter of 2007. Ripplewood's holdings include stakes in Direct Holdings Worldwide, the global direct marketer using the Time Life brand, and WRC Media, publisher of educational materials such as Weekly Reader and "World Almanac." Reader's Digest, like Meredith, has a long history of mining its vast database of subscriber names for direct marketing purposes.
Web 2.0 component
"Meredith has a long history of providing terrific consumer intelligence through their database," said Pete Snyder, CEO of New Media Strategies, which he founded in 1999. "Their media and publishing holdings have had a decades-long grip on what consumers, especially women and now Hispanic consumers too, are thinking. Now we can offer them the Web 2.0 component, mining user-generated or consumer intelligence, which they simply couldn't do before."
New Media Strategies has clients including ABC, Coca-Cola, AT&T, Ford, Sony and Unilever; the client roster at Genex, which opened in 1995, includes Honda, Benjamin Moore, Toyota and Citigroup.