Harte-Hanks Inc.: Aberdeen Acquisition Aims To Enhance Tech Sector, Lead Generation

Sept. 28, 2006
Marketing company acquires research firm, and gauges the value of the penny.

For Harte-Hanks Inc. -- one of IndustryWeek's IW 50 Best Manufacturers for 2006 -- the announcement to acquire AberdeenGroup Inc., a Boston-based technology market research firm, makes perfect sense. Harte-Hanks will be able to leverage its current database of companies with AberdeenGroup's analysts. And who wouldn't want a group of analysts at their disposal? Especially since Harte-Hanks tailors material to each of the vertical markets it serves -- adding analysts to the mix will enable a greater fit. The acquisition is expected to be completed by the end of September.

"In addition to the traction Aberdeen has seen in its own business, we see opportunities for Aberdeen analysts to leverage our Ci Technology Database, which now tracks technology infrastructure, business profiles and technology purchase plans at 680,000 locations in North America, South America and Europe -- expanding their base globally for research," said Gary Skidmore, corporate officer and senior vice president of Harte-Hanks, in a Sept. 18 statement announcing the acquisition. "The results of Aberdeen's intelligence -- fact-based reports on current marketplace experiences and trends -- are used to generate qualified leads by its clients, and we believe this intelligence will assist our clients significantly in their own marketing efforts."

Another tactic Harte-Hanks uses to assist marketing efforts is online polls. The company's PennySaver publication is asking readers to vote on whether or not to eliminate the penny.

The PennySaver Penny Poll is being promoted through ads in the PennySaver and its affiliated publications, as well as local radio spots where the PennySaver is published and at PennySaverUSA.com.

If you are curious, as of Sept. 27, 87% of Americans do not want to eliminate the penny.

Harte-Hanks Inc.
At A Glance
Harte-Hanks Inc.San Antonio, TexasPrimary Industry: printing and publishingNumber of employees: 3,6002005 In ReviewRevenue: $1.1 billionProfit Margin: 10.08%Sales Turnover: 1.28Inventory Turnover: 58.08Revenue Growth: 10.14%Return On Assets: 13.82%Return On Equity: 20.02%

Speaking of pennies, Harte-Hanks reported a positive first half, which ended June 30, 2006. The company saw a 4.4% increase in revenues to $576.8 million and a 1.1% increase in operating income to $91.1 million.

"Going into this year, we indicated that first half comparisons in direct marketing would be challenging given the strong first half performance in 2005 and what we saw for the business," said Richard Hochhauser, CEO, in a July 27 press release. "This has indeed turned out to be the case. While we have performed reasonably well at the bottom line -- improving margin slightly this quarter excluding the impact of the termination fee and stock-based compensation -- to generate the profit performance we strive for we need to return to revenue growth, and we do feel relatively better about the outlook for revenue performance going forward."

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