Leading the DM field.

The top direct marketing agencies are providing clients with ever greater marketing effectiveness and as a result are taking on increasing power and consequence.

Late last year Campaign took an in-depth look at three of the fastest growing new-generation international communications groups -- Snyder Communications, Mosaic Group and Lighthouse Global Network. Trailing a long way behind the likes of WPP, Omnicom and Interpublic, all three had nevertheless been very aggressive with their acquisition strategies over the previous two or three years, especially in below-the-line areas like direct marketing. The key question was: how big could they get?

Andrew Melsom, the founder of the consultancy Agency Insight and a seasoned observer of the marketing services scene, took a cynical view. In three to five years' time, he said, organisations such as WPP would be buying groups rather than agencies. When that happened, the so-called next generation would be vulnerable to acquisition.

"After all," he added, "isn't that the plan?"

All he got wrong was the ti ming. WPP has demonstrated its appetite for big targets this year with its takeover of Young & Rubicam. Meanwhile, Havas was due to complete its drawn-out purchase of Snyder last week, while Cordiant has snapped up Lighthouse -- a move that means, among other things, that the DM/SP agency Communicator will be merged into Bates' 141 Communications.

The past year has seen a number of other takeovers and mergers (see panel). And it's a continuing trend. Just last month, the multi-discipline agency Interfocus announced a management buyout from the Lowe Group, transferring a majority stake to the publicly quoted Canadian group Maxxcom, and buying Osprey London.

And there's clearly room for further rationalisation, even if many of the biggest and best individual agencies have already forfeited their independence. A study of Willott Kingston Smith's latest direct marketing league table with this article (p4) shows there is not an independent left in the top 20.