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Direct Group Enters Exclusive Agreement for Direct Marketing Use of Linguistics Technology to Increase Response Rates

Press release from the issuing company

Pennington, N.J. - April 24, 2007 - Direct Group, a full-service provider of high-volume, high-quality direct marketing services, announced today that it has entered into an exclusive agreement with Language Technologies, Inc. (LTI) for the use of its patented ReadSmart(R) technology in direct marketing. ReadSmart software formats text to make it easier to read, increasing reader comprehension and enjoyment. The technology also affords the ability to mate the formatting process to the printing and personalization stages of direct marketing production. Already tested successfully by Direct Group and LTI in fundraising direct mail programs, the technology has also proven successful in studies conducted with colleges, print media companies and textbook publishers. ReadSmart automatically formats text through subtle manipulation of the text so that the printed page reflects the phrasing structure of language. This makes the text easier to read, maintaining the overall normal appearance of the page without changing any words, fonts, grammar, or punctuation. The software can also customize formatting depending on certain demographics of intended readers, further increasing the appeal and impact of copy. The ReadSmart technology is the result of more than 30 years of research and development. Testing has delivered results that suggest the technology can deliver benefits to direct marketers: -- Half of the direct mail pieces of a well-known national nonprofit organization's 160,000-person fundraising campaign were formatted using ReadSmart. Results showed that the ReadSmart pieces produced 54 percent more net revenue, 38 percent larger average contributions and 11 percent more first-time respondents than regularly formatted direct mail. -- A major consumer magazine's direct-mail sweepstakes offer using ReadSmart technology was rated by readers as 39 percent more convincing than the same offer without the use of ReadSmart. -- College students in a computer course earned 69 percent more honors grades and experienced 40 percent fewer failures with ReadSmart-formatted textbooks than with standard textbooks. -- A franchise-investment direct mail test using ReadSmart generated 40 percent more responses compared to pieces using standard formatting. -- Tests focused on gauging general reading improvements have shown that the software improves reading comprehension by 15 to 25 percent, reading speed by 20 percent and reading persuasiveness and enjoyment by more than 30 percent. "We believe ReadSmart holds great promise to increase readership and response and improve overall ROI for a wide variety of direct marketing campaigns," said Don McKenzie, President and CEO of Direct Group. "At Direct Group we are constantly working to identify and implement forward-looking options to boost production efficiency, reduce cycle time and lower postal expense, and we look forward to ReadSmart providing us another unique way to help our customers improve response rates, affording them a marked improvement in their cost per response." McKenzie also noted that this could be "the right solution at the right time for the industry." He noted that the 2005 DMA Annual Business Review concluded that the top concern of marketers was the economy, and the second most commonly cited response was marketing issues such as response rates. In 2006, however, the ranking of those two flipped and 22 percent of respondents were most concerned with marketing issues such as response rates. Jonathan Staples, president of fundraising agency Stuart Grey, based in Frederick, Md., has successfully used ReadSmart in a number of direct marketing campaigns. "We were skeptical at first, but after several tests we were astounded by the results," said Staples. "We continue to use the technology and our clients continue to reap the benefits." ReadSmart was developed by Dr. Thomas Bever, Founder, Chairman and Technical Director of LTI. Dr. Bever has been a central figure in the creation of psycholinguistic science. He has taught at Columbia University and Rockefeller University, and headed the Cognitive Sciences Department at the University of Rochester. A former Junior Fellow at Harvard with a Ph.D. from the Massachusetts Institute of Technology, Bever and several colleagues formed LTI in 2001 to more fully develop the ReadSmart technology. "We are excited about working with the Direct Group team to apply the ReadSmart technology in the direct marketing arena," said Dr. Bever. "After working closely with their management team, we are confident that Direct Group is the right partner for us, and that they will be able to add value to their clients' campaigns using our technology." Lee Berendt, CEO of LTI, added: "We are particularly happy to be working with Direct Group given its leadership position in the direct marketing industry. In addition, due to the industry's focus on tracking and analyzing data regarding the results of their programs, we believe ReadSmart will be a value-added tool to help direct marketers design more successful acquisition and retention campaigns."