“The acquisition of Allrecipes.com, the market leader in the digital food space, significantly enhances our leading consumer and advertiser proposition,” said Meredith Chairman and CEO Steve Lacy. “It more than doubles the scale of the Meredith Women’s Digital Network, and is expected to drive incremental revenue and profit growth, adding to our already strong free cash flow over time.”

The acquisition of a digital brand of scale aligns well with Meredith’s Total Shareholder Return (TSR) financial strategy, which was announced on October 25, 2011. The TSR strategy includes (1) An increase in its annual stock dividend by 50 percent to $1.53 per share; (2) A new $100 million share repurchase authorization; and (3) Strategic investments to drive incremental revenue and profit growth.

The transaction, valued at $175 million, is expected to close later this quarter. Meredith plans to invest in Allrecipes.com to optimize the site for today’s growing online and mobile audiences. This investment spending, along with normal business seasonality, is expected to make the acquisition slightly dilutive – approximately $0.10 per share, or less than 4 percent – to Meredith’s fiscal 2012 full year financial performance. Meredith expects the acquisition will be modestly accretive to earnings per share and free cash flow in fiscal 2013.

The addition of Allrecipes.com fits with Meredith’s previously stated strategic acquisition criteria:

(1) National media brands that provide access to new audiences and advertising categories; and (2) Digital platforms that significantly increase scale. Specifically, the addition of Allrecipes.com to Meredith:

· Nearly doubles annual digital revenues for the Meredith Women’s Network.

· Gives Meredith the world’s No. 1 food website to pair with its expanding multi-platform food portfolio, enabling Meredith to offer advertisers access to more than 100 million unduplicated American women.

· More than doubles the audience of the Meredith Women’s Network to nearly 40 million unduplicated monthly unique visitors, making it the No. 1 premium owned and operated website in the important Women’s Lifestyle Category, according to the most recent comScore data.

· Provides Meredith access to a large and vibrant audience to market other products to, including print and tablet magazine subscriptions, as well as drive other E-Commerce opportunities.

· Enables Meredith to apply Allrecipes.com’s proprietary Search Engine Optimization (SEO) expertise across Meredith’s digital platforms, which will improve performance, and reduce Search Engine Marketing (SEM) spending.

· Introduces Meredith brands to new audiences, as Allrecipes.com has 17 sites in 22 countries.

“The acquisition of Allrecipes.com significantly enhances our digital platform and reinforces our leadership position in the food category,” said Meredith National Media Group President Tom Harty. “It increases our relevance with new, younger audiences, and offers advertisers an unmatched ability to now connect with an audience of more than 100 million consumers. We are excited to add Allrecipes.com, the world’s No. 1 food website, to our strong portfolio of digital media brands.”

Allrecipes.com currently has a database of over 500,000 recipes. Its U.S. audience is 70 percent female with a mean household income of $73,000, and it reaches nine out of 10 primary grocery decision makers. Allrecipes.com mobile apps have been downloaded by over 11 million consumers, and they are the No. 1 download on Android, iPhone, and iPad recipe applications. It is also the top food recipe channel on YouTube.

“Allrecipes.com is a dynamic, growing business and our sale process generated significant excitement,” said Robert Guth, Reader’s Digest Association president and CEO. “We are very pleased to have reached agreement with Meredith. We have worked well with them on a past transaction, so we know they will be a great home for this business and the team. For RDA, this is a significant step forward in our commitment to focus our resources on our core businesses, such as the Reader’s Digest brand.”

Added Lisa Sharples, President of Allrecipes.com, “Meredith is the perfect home for Allrecipes.com. Meredith’s laser focus on women, existing strength in food, strong relationship with advertisers and proven consumer marketing expertise are very attractive. Together, I’m confident we can grow the Allrecipes.com brand as well as the Meredith Women’s Network across digital, mobile and social media platforms.”

The acquisition of Allrecipes.com adds to actions Meredith has taken in the last year to strengthen its position as the leader in the digital and food content marketplace. These include the:

· Acquisition of Every Day with Rachael Ray magazine and its related digital media assets;

· Acquisition of FamilyFun magazine and its related digital applications;

· Acquisition of EatingWell, a multi-channel food brand focused on healthy eating and wellness;

· Launch of Recipe.com, a multi-channel food brand that pairs recipes with digital coupons and savings that is already attracting 2 million monthly unique visitors;

· Expansion of food and lifestyle content in its leading portfolio of brands across tablet products including the iPad, NOOKColor, Kindle Fire, and Samsung Galaxy.

· Introduction of 12 new apps resulting in more than 3 million downloads, including BHG.com’s highly successful Must Have Recipes; and

· Creation of six new Special Interest Media titles, bringing the total in the food space to nearly 40.

“We are constantly looking for strategic acquisitions and investment opportunities to expand our reach and increase shareholder value,” said Meredith Chief Development Officer John Zieser.

BDT & Company served as financial advisor to Meredith, and McDermott, Will & Emery served as its legal advisors. Morgan Stanley acted as lead financial advisor to Reader’s Digest. Evercore Partners acted as financial advisor to Reader’s Digest. Weil, Gotshal and Manges acted as legal advisor to Reader’s Digest.

    

Randy Stumbo: Sr Director of Distribution/Postal Affairs

Meredith Corporation

For Automation and Presorted First Class letter mailers, the January 22nd postage increase offers an incentive to include additional materials up to a total package weight of 2 ounces. Essentially, the 2nd ounce will mail at no additional costs.

With this change, the Postal Service has constructed the rates to combine the 1 ounce and 2 ounce levels into a single rate. This creates a great opportunity to add promotional material to bills and account statements without affecting postage. So the inclusion of coupons, surveys, notifications, educational materials to enhance customer relationships along with other types of materials promoting products and services are becoming more economical. This even opens the door to selling advertising content within your mailpiece to help offset your own mailing costs.

And the beauty of the program is it is simple to implement. No registration, no thresholds to meet and no postage rebate process required to capture the financial benefit. The savings are realized at the time of mailing.

The only question – How can you leverage this opportunity to bring value to your company?

    

The study shows consumers prefer direct mail over email messages when it comes to receiving marketing messages from companies. This is especially true for certain industries such as financial services, insurance, and travel. Direct mail increases credibility in consumer’s minds and feels more secure than receiving a message online. 26% say that direct mail is more trustworthy than an email.

65% of consumers say they receive too many emails. Break through the clutter of the inbox by sending direct mail. Consumers still agree that checking the mailbox is a daily routine, even if much of what used to be mailed has gone digital. Direct mail came out on top when it came to preferred method of communication in almost every category.

Source: http://www.epsilon.com/download/consumer-survey-results-reveal-direct-mail-most-preferred-channel-receipt-brand-communicati

    

So far, Ladies’ Home Journal is the largest traditional media brand to make this shift. Articles and photos that are uploaded by consumers will be edited and fact-checked before being published in the title. The magazine will see other changes as well, the biggest being the smaller emphasis on “Home” in the title, with “Journal” taking center stage.

These new writers will be paid for their articles as well. The magazine is striving to stay relevant to current readers, whose current average age is 56.1, while still appealing to the younger generation through these new consumer-written articles. Overall, the success of the redesign will take some time to measure. With such a novel concept, Ladies’ Home Journal is confident that its audience will receive the redesign positively.

    

However, they do expect to see a change in the purpose of direct mail from pure brand awareness to return on investment in hopes that more marketing dollars will return with customers. This means that instead of just receiving reminders in the mail from companies, customers will be receiving more advertisements and coupons to try to get them to buy. Marketers are hoping that this switch will make direct mail more profitable. Consumer open rates of direct mail are also very high, at 90%, which is extremely high even compared to other media.

    

“We are delighted to add the FamilyFun brand to our expanding media portfolio,” says Meredith National Media Group President Tom Harty. “This acquisition further strengthens our leadership position and reach among women in both the parenthood and food spaces, and offers our advertisers additional channels to reach these consumers.”

“FamilyFun’s rich content has led to the growth of its loyal readership base over its 20-year history, and we look forward to watching the magazine continue to grow under its new owner,” says Russell Hampton, President, Disney Publishing Worldwide. “Moving forward, Disney Publishing Worldwide will focus on our core children’s magazine and book businesses, our rapidly growing digital initiatives, and our Disney English language learning program.”

FamilyFun targets moms with kids ages 3-12 with a focus on family activities such as cooking, crafts, celebrations and travel. Launched in 1991, FamilyFun has a median age of 35, and 60 percent of its readers are college-educated. FamilyFun will report to Carey Witmer, President of the Meredith Parents Network. The first issue of FamilyFun published by Meredith is expected to be March 2012.

Meredith is already a leader in the parenthood space with brands such as Parents and American Baby. The addition of FamilyFun increases Meredith’s share of parenthood category magazine advertising revenues to nearly 60 percent, according to Publishers Information Bureau data. It also adds another attractive demographic of young female consumers to Meredith’s database.

Additionally, FamilyFun has a large presence in the food advertising space. Over the past six months, Meredith has significantly bolstered its market share in the food category through the:

Acquisition of the Every Day with Rachael Ray and EatingWell media brands;
Launch of Recipe.com, a multi-channel food brand that pairs recipes with digital coupons and savings that already is attracting 3.5 million monthly unique visitors; Introduction of six new Special Interest Media food titles, bringing the total to nearly 40; and, Expansion of food and parents content in its leading portfolio of brands – including Better Homes and Gardens, Family Circle, Parents and Fitness – across a broad array of tablet products including the iPad, NOOK Color and the Kindle Fire.

“We are constantly looking for strategic opportunities – be it the acquisition of media brands such as FamilyFun or our investment in marketing services leaders such as Iris Worldwide – to expand our reach and create shareholder value,” says Meredith Chief Development Officer John Zieser.

Disney Interactive’s Moms and Family online portfolio will retain all existing FamilyFun content for digital use.

About Disney Publishing Worldwide

Disney Publishing Worldwide (DPW) is the world’s largest publisher of children’s books and magazines, with over 250 million children’s books and over 400 million children’s magazines sold each year. Disney Publishing Worldwide consists of an extensive worldwide licensing structure as well as vertically integrated publishing imprints including Disney Book Group in the U.S., Disney Libri in Italy and Disney Libros in Spain. DPW publishes a range of children’s magazines globally including Topolino, Le Journal de Mickey, and Donald Duck, as well as family titles in the U.S. which include Disney Princess and Phineas and Ferb. Disney English is DPW’s English language learning business which includes Disney English centers in China and a worldwide retail licensing program. DPW’s digital products include bestselling eBook titles as well as original apps. Headquartered in White Plains, NY, Disney Publishing Worldwide publishes books, magazines, and digital products in 85 countries in 75 languages. For more information, visit www.disneypublishing.com.

About Meredith Corporation

Meredith Corporation is the leading media and marketing company serving American women. Meredith features multiple well-known national brands – including Better Homes and Gardens, Parents, Family Circle, Ladies’ Home Journal, Fitness, More, American Baby and Every Day with Rachael Ray – along with local television brands in fast-growing markets. Meredith is the industry leader in creating content in key consumer interest areas such as home, family, health and wellness and self-development. Meredith uses multiple distribution platforms – including print, television, online, mobile, tablets, and video – to give consumers content they desire and to deliver the messages of its advertising and marketing partners.

Additionally, Meredith uses its many assets to create powerful custom marketing solutions for many of the nation’s top brands and companies. Meredith Xcelerated Marketing has significantly added to its capabilities in recent years through the acquisition of cutting-edge companies in areas such as digital, mobile, social, healthcare, database, and international marketing. Most recently, Meredith made a strategic investment in London-based Iris Worldwide, a leader in experiential marketing.

A hallmark of Meredith’s business model and financial profile is its ability to consistently generate substantial free cash flow by leveraging the strength of its multi-platform portfolio. Meredith is committed to increasing Total Shareholder Return through dividend payments, share repurchases and strategic business investments. Meredith has paid a dividend for 64 straight years and increased its dividend for 18 consecutive years.

In October 2011, Meredith announced a 50 percent increase in its annual dividend to $1.53 per share. The new dividend represents a 4.7 percent yield based on a January 3, 2012, closing price of $32.65.

    

What is expected for this year? Unfortunately, the economy is not expected to turn around as quickly as we’d all like. The unemployment rate is expected to stay high, while confidence in the market is expected to stay low.

Even with the slow economy, marketers are still expected to spend to retain customers. First class mail is expected to shrink due to USPS changes, however standard mail is expected to increase, as it has previously. Direct mail’s purpose has shifted to driving sales online, but is still a prominent choice for marketers who are wishing to create a more personal experience for customers.

Overall, marketers will be turning to mobile advertising, including email, social media, and search marketing. We will not see a huge increase in advertising spending across the board until the economy turns around.

    

Why not create a printed piece where consumers can pull off a pop-up container and go to your restaurant and get a sample of your French fries? Not only does it make for an interesting piece, it gets customers into your store. Check out this video to see how this can be done.

This idea can be used in several different ways, but a great way to advertise is definitely through sampling. Providing samples to customers helps get your product in their hands, which can help your business grow. Need help with a great idea? Contact Meredith Print Advantage where you inspire, and we make it happen.

    

Direct Mail came out on top when it comes to consumers. This was true for a wide span of categories, as well as for younger demographics. Why direct mail? 26% of U.S. consumers felt mail is more trustworthy than email. 50% said they pay more attention to postal mail over email. 60% said they enjoy the experience of checking for mail, saying there is an emotional connection to be felt.

The study also found that around a third of the participants did not find advertisements on social media sites helpful.

Even with the stigma of being “old school,” direct mail is still a highly relevant and preferred medium in which to advertise. The trick is to connect with your audience and build trust. Trust in the Internet, especially privacy on the Internet, is slowly shrinking as consumers are hearing reports of compromises in privacy. Direct mail is a great way to make it personal, without having consumers fear that their personal information is at risk.