By Published on .

Direct marketing is attracting the interest of larger media companies, sparking a flurry of acquisitions.

In the latest action, Acxiom Corp. this month completed its acquisition of the assets of Direct Media Inc., Greenwich, Conn., for $25 million. DMI is a leader in the mailing-list business; Acxiom is in data integration, data management and data delivery.

On the last day of April, Harte-Hanks Communications completed its purchase of Di-Mark, Langhorne, Pa., a direct marketing services agency, for a reported $155 million.

The acquisitory trend started last year. Direct marketing transactions-including everything from buyouts to joint ventures-grew 30% in 1995 to 977 strategic transactions, says Vos, Gruppo & Capell, an investment banker specializing in direct marketing. Acquisitions and mergers rose almost 25%; joint ventures and strategic alliances were up 77%.

A 20% increase in merger and acquisition activity is forecast for 1996, said Mike Petsky, Vos principal.


"What we are seeing is media companies such as Harte-Hanks and Heritage realizing that direct response is the fastest-growing media form out there," Mr. Petsky said. "It has a credibility due to really measuring response and accountability and effectiveness.

"Direct response marketing builds a database. To capitalize on the trend of relationship marketing, you have to create a database by direct-to-consumer advertising to capture a customer's name and customer information."


Earlier this year, Heritage Media Corp. completed its merger with DIMAC Corp., St. Louis, one of the largest direct marketing agencies in the U.S. Heritage agreed to pay a reported $194.6 million in cash and stock.

Heritage also has a significant in-store marketing presence through its ActMedia subsidiary.

DIMAC ranked No. 1 on Advertising Age's list of top agencies by U.S. direct response revenue, with a 1994 total of $99.3 million, up 56% from '93.

Another major buy that Mr. Petsky noted was late February's acquisition by Cox Enterprises of Donnelley Marketing's Carol Wright Consumer Promotions, the couponing company.


At Harte-Hanks, direct marketing-its largest and fastest-growing core business-will now contribute more than half of the company's annual revenue, up from about 37% before the DiMark deal. Harte-Hanks had total 1995 operating revenue of $533 million.

DiMark offers outsource marketing and database services as well as printing services. The acquisition will make Harte-Hanks a player in direct marketing for the healthcare, insurance and pharmaceutical industries.


More non-traditional direct marketers-such as healthcare and package-goods marketers-are realizing the benefits of direct marketing and are putting significant dollars into it, Mr. Petsky said.

These marketers want one-stop shopping with lettershop, printing, production, creative and database services at one company, adding to the consolidation wave.

"The trend toward direct marketing by...package-goods companies means direct marketing is now a bigger part of the marketing mix" and the media, Mr. Petsky said.

Most Popular
In this article: