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Direct Response Marketing

Field Reports

1 May, 2005 By: Thomas Haire, Nicole Urso Reed Response

HSN Viewers Shop With Their Remotes

Response: Can you describe Lake Capital's role in the process?

O'Leary: We talked to a number of private equity firms, but Lake Capital understands and is interested in the agency services business. We were looking for a company that shared our vision. We weren't interested in a financial bureaucracy. Lake has a nice team, they're flexible and well financed. When we started talks about doing this, they came back to us in a short period of time with a number of companies and ideas on how to do a deal. The key is they will let us run our business, while enhancing our potential by being good at what they do.

Marilyn Davis
Marilyn Davis

Savage: When we became a stand-alone company in 2004, we knew it made a lot of business sense — it definitely was going to help us get to a new level and service clients in a broader way. After that, we began talking to a handful of private equity companies and immediately became very impressed with Lake. They are rigorous intellectually, are good marketers and have a vision that excites us.

Response: What successful products or clients have each of you worked with?

Savage: Of course, among our most successful clients over the years is Total Gym. American Telecast and Fitness Quest have had a great partnership and we've benefited from that. Marilyn has worked well with Bare Escentuals — we've seen their budgets grow every year. On the short-form side, we've had success with Sony Music. Sony just merged with BMG, so their future looks very bright.

Cardinal: Obviously, the entertainment products (DVD sets for Johnny Carson, Bob Hope and Rodney Dangerfield, among others) have been successful. We've also worked with America Online, the Power Juicer and a host of other clients in the insurance and lead-generation space, among others.

Response: What are the plans for the new entity during the first six months?

Cardinal: From a media perspective, a key goal is getting the Philadelphia and Portland offices in sync. It's already been fun because we're working together on a couple of accounts now. We're not changing operations, but rather trying to leverage our strengths.

O'Leary: We're working on getting the ATC side some of the existing office operations we have here. It's important to get everyone on the same page. At the same time, there will be no job cuts, because both companies are so healthy.

Davis: Actually, I think we're both in a hiring mode.

Savage: That's just another sign that our business has been snowballing. Many of our clients are increasing billings, and to continue servicing them, we need the personnel we already have in place. Tim and Michelle's companies came into this with vastly further developed marketing and new business machines. Our challenge is to keep up with it.

Response: How do you plan to grow your $200 million in annual media billings?

O'Leary: We seem to be moving ahead well together. We're going to grow internally and are also looking for the right kinds of acquisition properties, as well.

Cardinal: Specifically, we're looking at direct mail and radio operations for possible acquisitions.

Savage: The proof is in the pudding — we're going to keep bringing our experience to bear in order to sell more product with more efficient media.

Response: What does it say about the DR industry when a merger between two of its most successful companies occurs?

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