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Editorial: The Best of 2005

Amid natural disasters, the skyrocketing growth of search marketing and soaring gas prices, it wasn’t hard to come up with the top stories in direct and Internet marketing for 2005. The growth was all around as mail volume reached its highest quarterly increase in 15 years this spring, and Standard mail volume surpassed First Class for the first time. At the same time, online sales continued to generate double-digit growth.

Let’s recount the top three stories of 2005:

3. Data privacy. The headlines were big this year as ChoicePoint, LexisNexis, DSW, Bank of America and other companies became household words with data breaches a seemingly weekly occurrence. Lawmakers grilled executives from the affected companies and promised tougher regulations, but it doesn’t sound like many of them differentiate between marketing data and data that can be used to steal someone’s identity. Still, by the end of the year no comprehensive legislation was passed. I have a feeling this issue may be higher on next year’s list.

2. USPS still delivers. When the U.S. Postal Service isn’t one of the top stories of the year in DM, something will be very wrong. This year, Congress got the furthest it has in 30+ years toward passing postal reform, but a Missouri senator stopped the momentum to appease Hallmark. Though Standard mail growth was high, it is expected to slow next year because of the Jan. 8 rate increase. The good news is the size of the increase: 5.4 percent. The bad news: expect a larger increase in 2007.

1. Merger mania. Investment bankers Petsky Prunier said the first half of 2005 was one of the strongest on record for DM mergers and acquisitions. I’ll bet the second half was just as busy. In database/marketing services, Merkle, Acxiom and Epsilon all bought companies with e-mail marketing expertise. The list industry continued to consolidate as infoUSA acquired Millard Group, though Lon Mandel bucked the trend and bought Specialists Marketing Services back from ClientLogic. Big retailers grew bigger as Federated acquired rival May and Kmart bought Sears. Private equity firms showed interest in that sector with Texas Pacific Group and Warburg Pincus buying Neiman Marcus and American Capital Strategies acquiring Potpourri Group. Online, Omnicom Group bought Resolution Media in a move that’s sure to begin an era of M&A in the search space. That’s not counting IAC/Interactive Corp.’s acquisition of Ask Jeeves earlier in the year. IAC also boosted its multichannel retail strategy by buying Cornerstone Brands.

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