Acquisitions

Digital Marketing Group PLC
02 July 2007


                    
Date:               2nd July 2007

On behalf of:       Digital Marketing Group plc (the 'Company' or the 'Group')

Embargoed:          0700hrs


Digital Marketing Group plc
Acquisitions of Graphico & Hyperlaunch for £12.1m
     
•    Acquisition of Graphico for a maximum consideration of £8.6m
•    Acquisition of Hyperlaunch for a maximum consideration of £3.5m


Digital Marketing Group plc (AIM: DIGI), the digital direct marketing group, is
today pleased to announce the acquisitions of the entire share capital of
Graphico New Media ('Graphico'), a successful full service creative digital
agency with skills in mobile marketing and Hyperlaunch New Media 
('Hyperlaunch'), an award-winning digital creative marketing agency.

Digital Marketing Group is paying a maximum consideration of £8.6m for Graphico
and a maximum consideration of £3.5m for Hyperlaunch. The acquisitions will be
funded via a combination of existing cash resources, loan notes, bank
facilities, and shares in Digital Marketing Group. Adjustments to consideration
are in place in relation to agreed minimum net asset balance sheet positions
retained by the businesses.

The acquisitions reaffirm the Group's 'buy and build' strategy of acquiring
companies that have activities in 'online' marketing, 'offline' direct marketing
and database marketing.  Graphico and Hyperlaunch are both digital marketing
specialists which complement the Group's existing businesses and broaden its
digital direct marketing offering, client and product base.

Commenting on the acquisitions, Ben Langdon, Digital Marketing Group plc's Chief
Executive, said:

'I am delighted to announce the completion of these acquisitions.  The
businesses will bring new expertise and skills into the Group and complement
further our specialist digital marketing offering. We look forward to welcoming
them into the Group and working together to develop and create one of UK's
leading digital direct marketing groups.'


Graphico

Graphico, founded in 1990, is an award-winning full service creative digital
agency with mobile marketing skills. The core business area lies in the design,
development and maintenance of web-sites, from brand extension sites to full
e-commerce based applications. Since the business was established, it has
developed by combining both creative and technical skills to provide tailored
solutions for its clients.  Graphico is based in Newbury and employs
approximately 70 people.  Graphico won the 2007 Travel Category of the NMA
Effectiveness Award for its work with First Great Western.

Graphico has created a bespoke mobile system that offers an integrated solution
for SMS, WAP, Voice and ECRM applications. It has a range of international and
blue-chip clients including Pepsi, The London Eye, Walkers, Universal,
Bacardi-Martini, BBC, Chivas Regal and First Great Western.

Over the last two years Graphico has demonstrated considerable sales growth.
This growth is reflected in its audited financials for the year ended 31
December 2006; with turnover of £4.1m (up 70.8% on audited 2005 turnover of
£2.4m) and operating loss before tax of £80,000 which, when adjusted for
exceptional and non recurring costs, gives an operating profit of £176,000.

Digital Marketing Group is acquiring the entire share capital of Graphico for a
maximum consideration of £8.6m. The consideration comprises £4m cash on
completion, up to £1.5m worth of loan notes contingent on achieving certain
EBITDA performance targets for the six months to 30 September 2007 and up to a
maximum £3.1m of shares in DMG contingent on Graphico achieving various EBITDA
performance targets. The maximum consideration figure of £8.6m is payable upon
Graphico achieving annual EBITDA of £1.18m prior to December 2008. Digital
Marketing Group retains an option to pay the share element in loan notes rather
than shares.

Commenting on becoming part of Digital Marketing Group, Mark Bennett, Managing
Director of Graphico said:

'We are very excited to be joining Digital Marketing Group and are relishing the
opportunity of working with the existing members of the Group to deliver best of
breed digital direct marketing services. This acquisition represents a major
milestone in Graphico's 17 year long history and will ensure that we continue to
grow the company and the specialist digital services that we offer our clients.'


Hyperlaunch

Hyperlaunch, founded in 2001, is a digital creative marketing agency. The
Company operates under three divisions: Creative/Development, Online PR (music
and non music) and Buzz Marketing. Hyperlaunch has an established reputation for
creativity and strong technical development focus particularly evident in
entertainment, youth and lifestyle brands.

Its client base includes blue-chip brands such as Universal Music, Atlantic
Records, Samsung and Warner Bros.  Hyperlaunch is based in Clifton, Bristol and
employs 32 people.

Hyperlaunch has grown organically year on year with a turnover of £1.6m and
operating profit of £326,000 for the financial period of 5 April 2007,
unaudited.

Digital Marketing Group is acquiring the entire share capital of Hyperlaunch for
a multiple of 7.25 times the profit before interest and tax for a twelve month
period to 30 June 2007.  The level of profit before interest and tax for the
period to 30 June 2007 is not anticipated to exceed £350,000 (estimated and
unaudited). The maximum consideration cannot exceed £3.5m and will be paid 60%
in cash and 40% in shares.

Commenting on becoming part of Digital Marketing Group, Jon Morgan Managing
Director of Hyperlaunch, said:

'We are very excited to become part of Digital Marketing Group. We are highly
attracted to the fact that Digital Marketing Group is not a 'marketing services'
group and traditional marketing services such as mass-marketing advertising
agencies, packaging, design, or sales promotion companies have no home there.
As part of a specialist digital marketing group, we are confident we will be
able to drive the growth of our business and provide our clients with an
enhanced comprehensive digital marketing offering.'


Admission of new ordinary shares to AIM

As part of the acquisition of Hyperlaunch, the Company is issuing 466,238
ordinary shares to the shareholders of Hyperlaunch. Application has been made
for these shares to be admitted to trading on AIM and admission is expected to
occur on 2 July 2007. Following this issue of ordinary shares, there will be
64,878,390 ordinary shares in issue.


- Ends -


Enquiries:

Digital Marketing Group plc                      www.digitalmarketinggroup.co.uk
Ben Langdon, Chief Executive                     via Redleaf Communications
Cenkos Securities
Adrian Hargrave / Max Hartley                    Tel: [phone]
Redleaf Communications
Emma Kane/Sanna Lehtinen/Susan Quigley           Tel:  [phone]


Notes to Editors:
     
•    Publication quality photographs are available via Redleaf Communications.

•    Digital Marketing Group is not a 'marketing services' group and will never 
     seek to make investments in traditional marketing services such as
     mass-market advertising agencies, packaging, design, or sales promotion.

•    Digital Marketing Group aims to provide a range of integrated digital 
     direct marketing services, coupled with database marketing skills. By doing 
     this Digital Marketing Group offers clients the ability to coordinate their
     ''online'' and ''offline'' direct marketing strategy, thereby generating 
     more effective digital direct marketing, higher brand-consumer loyalty and 
     improved profitability.

•    Its strategy is to grow organically and by acquiring businesses with
     complementary skills in digital direct marketing.

•    Inbox Digital has enjoyed industry wide recognition having won the Games 
     Category at the NMA Effectiveness Awards 2007 for their online game, 'Viva
     la volley'.  Stan James commissioned Inbox Digital to create an online game 
     to promote its betting services during the 2006 FIFA World Cup. The Awards 
     were announced on Thursday 28th June 2007.

•    Graphico won the Travel Category at the NMA Effectiveness Awards 2007 for 
     the First Great Western consumer-facing website.  Graphico created a
     seamless online journey from route planning to ticket sales, integrating
     third-party information to create a destination site.


The Group currently comprises five agencies:

-    Inbox Digital - plans, creates and manages end-to-end digital marketing 
     campaigns.  Further information is available at:  www.inbox.co.uk
-    Dig for Fire - the largest direct marketing agency operating exclusively 
     outside London.  Further information is available at:  www.digforfire.co.uk
-    HSM - combines outbound telemarketing, with digital and data marketing.  
     Further information is available at www.hsm.co.uk
-    Cheeze - one of Europe's leading digital response agencies and the UK's 
     fifth largest search marketing specialist. Further information is available 
     at:  www.cheeze.com
-    Jaywing - a leading UK data services specialist providing both online and 
     offline data and information services. Further information is available at: 
     www.jaywing.com




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