HARTE-HANKS: MARKETERS INVESTING RESOURCES IN E-MARKETING, DATABASE DEVELOPMENT IN 2005

HARTE-HANKS: MARKETERS INVESTING RESOURCES IN E-MARKETING, DATABASE DEVELOPMENT IN 2005


NEW YORK – August 22, 2005 – A new survey report underwritten by Harte-Hanks, Inc. (NYSE:HHS) and prepared by CSO Insights, Inc., reveals that more than one in five organizations spend more than 45 percent of their entire marketing budgets on "target marketing," and an additional two in five spend between 15 percent and 45 percent on such activity.

According to 2005 Executive Report: Target Marketing Priorities Analysis, nearly three of four companies plan higher investments in database management this year; three in five companies are planning to spend more on e-mail, Web design and data quality initiatives; and more than one in two on search marketing.

A total of 281 companies participated in the survey, reflecting a cross-section of vertical markets among them retail, manufacturing, high-tech and services, among other categories. The survey, conducted via the Web in April and May 2005, was distributed to senior marketing executives from a combination of proprietary and commercially available sources. One in four responses represent firms of more than $1 billion in revenues, and nearly 70 percent of firms are located in the United States. Confidence interval is ± 6 percent (for 95-percent confidence level).

The report was co-authored by Jim Dickie and Barry Trailer, both partners of CSO Insights, based in Boulder, CO (http://www.csoinsights.com), with additional analysis provided by market researchers at Harte-Hanks.

"Database and interactive marketing lead all categories in new marketing investments," said Richard Hochhauser, president and chief executive officer, Harte-Hanks, Inc., in announcing the availability of the full study report. "Web sites and e-mail, in particular, really show strength. Yet struggles with data quality and data management remain pervasive. There is more work to do."

According to the study, 43 percent of respondents have a regular or constant program to support personalization and one-to-one marketing; 33 percent feel they are "good" or "very good" at calculating customer profitability; but more than a third rate their database management as "poor" or "very poor" (just 12 percent rate themselves "very good"). Further, 53 percent of respondents believe that their own customer data are at least 75 percent accurate – and 40 percent of respondents believe that less than half their prospect data are correct.

"Disciplined planning still eludes many marketing organizations," said Hochhauser, who noted that 58 percent of firms have an informal or no process at all for direct marketing planning, while 42 percent do.

Other observations from the report findings:

• 'Mission Critical' Web Sites, Search and E-mail: Among respondents, Web sites and micro-sites, search optimization and e-mail marketing are described as "mission critical" by 53 percent, 43 percent and 41 percent, respectively. Wireless messaging and blogs still have not "broken through" – just 7 percent and 5 percent, respectively, rate these interactive media as "mission critical."
• Market Research and Analytics are Priorities: Businesses want more customer insight in the way of understanding perception of product and services (49 percent), knowing reasons why customers buy and respond (49 percent), and knowing the impact of marketing on awareness, attitudes and intentions (49 percent).
• Lists and Segmentation Challenge Direct Mail: The availability of the right "lists" (66 percent) and the ability to mail the right segments (65 percent) are top cited challenges for postal mail.
• Telemarketing Stays the Course: Fifty-six percent of respondents indicated that they have not shifted marketing from outbound telemarketing, despite added government regulation.
• Information Concerns for an Interactive Age: Security (60 percent), privacy (59 percent), spam (56 percent), and data accuracy (56 percent) are among top levels of concern for digital marketing.

An executive summary and table of contents of the report is available from Harte-Hanks by contacting the company toll-free (USA only), (800) 456-9748 or via e-mail at mailto:contactus@harte-hanks.com?subject=. A full 79-page report also is available.

[Editor's Note: A copy of the full study itself and selected charts from the study are available to editorial members of the media. Harte-Hanks and CSO Insights ask that the report not be posted in its entirety until after October 2005, when links to the full report will be public. Contact Chet Dalzell at (212) 520-3232, or mailto:chet_dalzell@harte-hanks.com?subject=, to request a hard or soft copy of the executive summary or full report.]


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Source: 2005 Executive Report: Target Marketing Priorities Analysis, Harte-Hanks

About CSO Insights
CSO Insights is a research firm that specializes in benchmarking how companies are leveraging people, process, technology, and knowledge to optimize the way they market and sell to customers. During the past ten years, CSO Insight's survey of more than 5,000 sales effectiveness initiatives has become the benchmark for tracking the evolution of how the role of sales is changing, the challenges that are impacting sales performance, and most importantly, what companies are doing to address these issues. For more information, go to http://www.csoinsights.com .

About Harte-Hanks
Harte-Hanks, Inc., San Antonio, TX, is a worldwide, direct and targeted marketing company that provides direct marketing services and shopper advertising opportunities to a wide range of local, regional, national and international consumer and business-to-business marketers. Harte-Hanks Direct Marketing improves the return on its clients' marketing investment with a range of services organized around five solution points: Construct and update the database -- Access the data -- Analyze the data -- Apply the knowledge -- Execute the programs. Expert at each element within this process, Harte-Hanks Direct Marketing is highly skilled at tailoring solutions for each of the vertical markets it serves. Harte-Hanks Shoppers is North America's largest owner, operator and distributor of shopper publications, with shoppers that are zoned into more than 1000 separate editions with circulation of 12 million in California and Florida each week. Visit the Harte-Hanks Web site at http://www.harte-hanks.com or call (800) 456-9748.

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