• by Wendy Davis  @wendyndavis, April 25, 2006

Publishing company Meredith Corp. has purchased O'Grady Meyers, a 40-person Los Angeles-based interactive shop known for customer relationship marketing and Web site development. Financial terms were not disclosed.

The deal appears to mark the first time a major traditional publishing company has purchased an ad agency--although many publishers, including Google and Yahoo, now offer agency-like services to their advertisers.

The 13-year-old O'Grady Meyers will join Meredith's integrated marketing unit, which produces custom publications and direct mail for marketers including Nestle, Met Life, and Pepsi-Cola, among others. O'Grady Meyers already counts Nestle among its client roster.

Meredith does not intend to use O'Grady Meyers in connection with its consumer magazine titles, including Better Homes and Gardens and Ladies Home Journal, said Wendy Riches, executive vice president of Meredith Integrated Marketing and Interactive Media. Rather, the plan is for O'Grady Meyers to assist with online efforts to complement Meredith Integrated clients' custom publications and direct mail campaigns. "We do offline CRM, and they do online, and now we'll be able to offer this as a seamless bundle to our clients," Riches said.

O'Grady Meyers will continue to operate as an ad agency for marketers that have no relationship with Meredith--an arrangement that raised some eyebrows on Madison Avenue.

"It's a funny combining of church and state," said Sarah Fay, President of Isobar U.S. But, she added, an increasing number of publishers have started taking on roles that were typically filled by agencies. "Believe it or not, we're seeing a lot of in-house work happening on the media vendor side."