Marketing League Table: Customer publishing leagues

If the number of new magazines being sent out to consumers is anything to go by, customer publishing is in rude health. During the past six months there has been a magazine launch for every working day, according to the sector's trade body, the Association of Publishing Agencies (APA). With brands such as Bang & Olufsen, Virgin Media and Harley-Davidson entering the market for the first time, publishing agencies have been busy consolidating the success of recent years.

This year's leagues reflect this boom, with many agencies experiencing revenue growth, a trend that looks set to continue as an influx of new business makes its mark during coming months. But the message from the past year is that agencies cannot afford to rest on their laurels.

The market's expansion is being driven by several client areas. The retail sector remains buoyant. The Original Shoe Company, for example, hired Haymarket Network to publish a magazine promoting its stores, while the John Lewis Partnership has launched two titles through John Brown over the past year: lifestyle title Source for its Greenbee service, and drinks guide Thirst for Waitrose.

Another profitable seam has been online brands seeking an offline identity. ASOS.com, which launched ASOS.com magazine through Square One (now Seven Squared) a year ago, recently introduced ASOS Man, a magazine targeting young men. Meanwhile, Cedar Communications has picked up a brief for online gaming firm 888.com. Finance is also an area seeing significant growth. One of the biggest pitches of the year was for RBS, which handed a brief for a fresh title to John Brown.

There are plenty of sectors yet to be convinced - the most notable being FMCG - but the past year has seen strenuous attempts to rectify this. In March, the APA, which has gained a reputation as one of the most proactive trade bodies in the marketing services arena, launched a new-business service called ASK. Its purpose is to oversee pitches and advise on shortlists for clients new to the industry or wondering where to turn. It reflects a belief within the sector that business was being lost because interested clients did not know where to start.

So far the service has pulled in some big-name clients, among them Sony, Bang & Olufsen, Shell and RBS. Not surprisingly, it has been beneficial for the APA's membership list, with several publishers that had kept their distance from the organisation rushing to join to avoid missing out on new business.

'It gives clients somewhere to go for advice; launching a magazine is not easy. Obviously there will be winners and losers over time, but it is great to have this driving the industry forward,' says Mark Beazleigh, managing director at Northstar. Andrew Hirsch, chief executive at John Brown, agrees. 'You have to take a long-term view. We will all get our share.'

As for the agencies themselves, scale appears to be increasingly important. One of the biggest developments has been the merger between Square One and Seven to form Seven Squared. The rationale, according to Sean King, director at Square One and now in the same role at the merged firm, was to be in a position to win big-spending clients as more of them come into the market. For Seven, whose business had been focused on food and retail, the deal increased its expertise in other client sectors. Square One, meanwhile, had a ferocious track record of winning medium-sized accounts, but King admits it lacked the firepower to compete for the really big business. 'We were never going to get to the top on our own,' he says.

Many believe that there are more mergers to come. 'The fusion of Square One and Seven is the start of an aggregation of agencies that will take place over the coming years,' says Toby Smeeton, managing director of Sunday, whose clients include Toyota and The Conran Shop. 'Customer publishing agencies will follow the same consolidation that we have seen with direct marketing and ad agencies over the past 10 years.'

Seven Squared's fortunes will be watched with interest by other medium-sized publishers. Several argue that it is becoming difficult for smaller agencies to get on pitch lists for big accounts, as clients new to the industry instinctively plump for the big, well-known agencies. Grahame Lake, director of PSP Rare, publisher of titles for Somerfield and Tottenham Hotspur, says his agency is on the lookout for acquisitions. 'It is getting harder for smaller agencies to enjoy the success being felt at the top of the industry,' he says. 'There has been growth, but it is slowing. In that situation it makes sense to acquire.'

Northstar's Beazleigh also believes that there is a divide between big and small players. 'The industry is growing, which means more consolidation. It is tricky for smaller agencies and there is a monopoly emerging within the industry.'

But not everyone agrees. 'There is still enough business around of all sizes for the entire industry to be growing,' counters Redwood chief executive Keith Grainger. 'Do I think we are always chosen? No. There are things we'd like to get a look at that we don't and sometimes you have no idea why.'

For the time being, there seems little appetite for takeovers from outside the industry, despite rumours of ad agencies launching publishing arms. Most of the major networks already have their own specialist divisions, and smaller networks have not shown any interest, so consolidation will continue to come from within. 'In the next couple of years we will see more deals - not takeovers, but mergers,' says Tilly Boulter, managing director of Think. 'The owners of smaller agencies don't want to sell out, but they realise that it is difficult to win the big accounts without doing so.'

Despite some of the pessimism, there are opportunities for smaller agencies. Bladonmore Media is profiting from the desire of financial institutions to communicate with their stakeholders. Its titles include Informer, a quarterly magazine for private-equity firm August Equity, which updates investors as well as the companies it owns with news about the firm.

The growing importance of private equity should ensure this area continues to grow. Louise Ward, investor relations and marketing manager at August Equity, points to the Walker Review into private equity. An interim report has already recommended that investment companies need to be more transparent through regular communication. 'We will definitely see more firms going down this route,' she says. 'Private equity needs to be more open and with all the press coverage it is getting, it is vital for it to become better at communicating.'

This kind of business-to-business publishing offers potential for publishers to expand existing relationships. Cedar was recently asked by long-standing client British Airways to replace its newsletter for shareholders with a biannual magazine. Other B2B organisations are looking to agencies to polish up their titles. City & Guilds, for example, has switched its 50-year-old customer publication Broadsheet from in-house to August Media. With a wide range of stakeholders to reach, the body felt that its communications needed to work harder. 'Readers get so many magazines through the door that this needed to stand out,' says corporate communications manager Cathy Tingle.

There are plenty of other issues facing agencies of all sizes. For Jason Frost, chief executive at Publicis Blueprint, a frustration is that despite their high circulations, when it comes to placing client ads, customer titles seem to be invisible to media agencies. 'You would think a creative media-planning agency would think about customer magazines, but they don't,' he says. 'They are more likely to be thinking about creating one for a client than they are about advertising in one. Now that there is more free media, it should be in planners' and buyers' minds.'

Several agencies, especially at the top end of the market, have identified planning skills as a key requirement if customer publishers are to cement their role. Haymarket Network, which last year won Sky's sports magazine, is one of those agencies to recruit planners from other parts of the marketing industry to improve the insight and measurement underpinning its titles. Managing director Juliet Slot says it is a 'client-driven requirement' that will be crucial for the business to compete. 'We have missed out on pitches because we lacked such skills,' she adds.

This is indicative of how agencies are having to invest to keep up with competitors and the demands of their clients. John Brown's Hirsch says that his company has put significant investment behind additional research and is now reaping the benefits. He believes this was crucial to convincing RBS, which already spent a modest amount on its titles, to raise its investment. 'We are going to have to spend more to protect what we have got, but also to win business.'

As customer magazines become more sophisticated, clients are also mulling the benefits of launching titles that customers have to pay for. Waitrose Food Illustrated has followed this model for years, and Superdrug's Dare, unveiled this year through River Publishing, has gone down the same route.

'The paid-for business model is something we are being asked to do. It is a real area of growth,' says Nicola Murphy, River's managing director. 'Customer titles are good quality, people are prepared to pay for them and clients have a distribution channel without paying for the newsstand. Many of the magazines are funded by ads too, which is the icing on the cake.'

Digital continues to generate discussion as the percentage of agency revenue drawn from the area continues to grow - touching 20% at Publicis Blueprint, among the top 10 customer publishers. Haymarket Network's Slot argues that 'there is not a client brief that comes in now without a digital element' - and the goal for several agencies is to position themselves as content providers, able to supply branded editorial via any platform. Earlier this year John Brown purchased Fingal, an agency with strong web credentials and Seven Squared is also on the lookout for a similar takeover to boost its capability.

Redwood is using mini films to ensure the quality in tone and content seen in print publications is also seen online. For fashion retailer Oli, it streamed interviews with models and designers, as well as behind-the-scenes footage at shoots, while for Land Rover and Volvo it has created mini documentaries.

However, the model still tends to be that the magazine comes first, with a digital presence linking to it. Some believe there is little sign of this changing. 'Customer publishers have not broken into the digital space from a strategic perspective as much as they would have liked,' says PSP Rare's Lake.

The biggest challenge the industry now faces is showing it can take on agencies in other sectors. One goal is to showcase publishers' creative firepower, and to this end the APA launched its first creative awards earlier this year.

The awards are an admission that there is still work to be done. Having spent years proving the business effectiveness of customer magazines, the APA decided it needed to emphasise the creativity driving their impact.

Such initiatives will be crucial if customer publishing is to reach the next level. By looking toward digital platforms and broadcast content, publishers are leaving their comfort zone and treading on the toes of other marketing disciplines. They must now convince clients they have the skills to be truly media-neutral providers of branded content.

TOP CUSTOMER PUBLISHING AGENCIES

Agency Turnover (pounds) %
2006 2005 chng

1 John Brown 57,110,446 49,404,274 16
2 Redwood 35,917,481 36,813,588 -2
3 Publicis Blueprint 33,757,000 24,969,000 35
4 Ten Alps Communications 29,400,000 n/a n/a
5 Seven Squared 25,191,000 n/a n/a
6 Redactive Media Group 21,348,218 22,579,251 -5
7 Haymarket Network 21,100,000 21,000,000 0
8 Cedar Communications 20,892,558 20,649,833 1
9 River Publishing 18,653,705 14,759,264 26
10 Forward 7,800,000 7,400,000 5
11 Illustrated London News 4,534,000 5,701,000 -20
12 Caspian Publishing 4,400,000 4,100,000 7
13 Absolute Publishing 4,363,160 3,154,709 38
14 Wardour 4,237,061 3,852,455 10
15 Story Worldwide 4,130,908 n/a n/a
16 Future Plus 3,800,000 2,100,000 81
17 PSP Rare Publishing 3,773,706 n/a n/a
18 Ink Publishing 3,580,677 2,762,702 30
19 Think Publishing 3,336,822 1,943,239 72
20 Zone 3,161,000 1,805,300 75
21 Specialist Publications UK 2,946,717 2,210,586 33
22 Northstar 2,756,384 2,295,730 20
23 Connect Communications 2,566,759 n/a n/a
24 Axon Publishing 2,394,000 2,556,000 -6
25 August Media 2,219,000 1,608,000 38
26 Atom 2,183,000 1,660,000 32
27 Summersault Communications 2,034,835 1,838,595 11
28 Bristol Magazines/BBC Cust Pub 2,088,296 2,099,101 -1
29 Sunday 1,755,000 n/a n/a
30 Bladonmore Media 1,526,587 1,098,779 39
31 Brooklands Publishing 1,373,900 1,872,100 -27
32 WordWide 1,239,000 1,196,000 4
33 Communikator 960,000 501,000 92
34 publishingtmw 722,262 952,402 -24
35 Aspect Media 612,364 243,042 152
36 Engage 491,044 n/a n/a
37 White Light Media 339,834 418,600 -19
38 Real London 100,000 88,000 14


Agency Int'l turnover (pounds) % Online Staff
2006 2005 chng (%)

1 John Brown 0 0 n/a 3 285
2 Redwood 33,263,085 28,476,994 17 5 220
3 Publicis Blueprint 0 0 n/a 20 110
4 Ten Alps Communications n/a n/a n/a 10 287
5 Seven Squared 0 0 n/a 0 149
6 Redactive Media Group 0 0 n/a 3 120
7 Haymarket Network 15,400,000 11,700,000 32 9 101
8 Cedar Communications n/a n/a n/a 1 90
9 River Publishing 0 0 n/a 10 130
10 Forward 5,900,000 4,300,000 37 4 90
11 Illustrated London News 152,000 219,000 -31 15 41
12 Caspian Publishing 378,000 0 n/a 5 78
13 Absolute Publishing 0 0 n/a 1 31
14 Wardour 0 0 n/a 17 45
15 Story Worldwide 10,065,685 7,787,097 29 3 40
16 Future Plus 0 0 n/a 25 80
17 PSP Rare Publishing 0 0 n/a 10 27
18 Ink Publishing 13,476,580 8,303,294 62 1 150
19 Think Publishing 57,948 0 n/a 5 36
20 Zone 84,000 83,000 1 90 43
21 Specialist Publications UK 0 0 n/a 15 30
22 Northstar 0 0 n/a 4 16
23 Connect Communications 0 0 n/a 5 29
24 Axon Publishing 0 0 n/a 0 18
25 August Media 0 0 n/a 4 20
26 Atom 0 0 n/a 12 15
27 Summersault Communications 0 0 n/a 10 40
28 Bristol Magazines/BBC Cust Pub 0 0 n/a 0 8
29 Sunday 0 0 n/a 10 12
30 Bladonmore Media 59,833 3,695 1,519 10 10
31 Brooklands Publishing 583,900 0 n/a 0 65
32 WordWide 0 0 n/a 5 15
33 Communikator 0 0 n/a 15 6
34 publishingtmw 0 0 n/a 20 10
35 Aspect Media 0 0 n/a 10 6
36 Engage 0 0 n/a 5 6
37 White Light Media 0 0 n/a 5 8
38 Real London 920,000 660,000 39 0 5


AGENCY

1 John Brown
Founded 1987. Privately owned. Chief executive Andrew Hirsch. 95%
consumer, 3% B2B, 2% internal. Clients include John Lewis, RBS,
Woolworths. Member APA. www.johnbrowngroup.co.uk
2 Redwood
Founded 1983. Subsidiary Omnicom. Chief executive Keith Grainger.
94% consumer, 6% B2B. Clients include Marks & Spencer, Boots, Volvo.
Member APA. www.redwoodgroup.net
3 Publicis Blueprint
Founded 1999. Subsidiary Publicis Groupe. Chief executive Jason
Frost. 95% consumer, 5% B2B. Clients include Asda, Hewlett-Packard,
Debenhams. Member APA. www.publicis-blueprint.co.uk
4 Ten Alps Communications
Founded 1971. Subsidiary Ten Alps. Chief executive Adrian Dunleavy.
100% B2B. Clients include Road Haulage Association, British Chambers
of Commerce, Association of British Insurers.
www.tenalpspublishing.com
5 Seven Squared
Founded 2007. Privately owned. Chairman Michael Potter. 95%
consumer, 1% B2B, 4% internal. Clients include Sainsbury's,
ASOS.com, English Heritage. Member APA. www.sevensquared.co.uk
6 Redactive Media Group
Founded 1981. Privately owned. Chief executive Brian Grant. 18%
consumer, 82% B2B. Clients include Chartered Institute of Purchasing
& Supply, Royal British Legion, Chartered Institute of Marketing.
Member APA. www.redactive.co.uk
7 Haymarket Network
Founded 1997. Privately owned. Managing director Juliet Slot. 62%
consumer, 37% B2B, 1% internal. Clients include BSkyB, British Army,
Manchester United. Member APA. www.haymarketnetwork.com
8 Cedar Communications
Founded 1992. Subsidiary Omnicom. Managing director Clare Broadbent.
90% consumer, 10% B2B. Clients include British Airways, Tesco,
Central London Estate Agents. Member APA. www.cedarcom.co.uk
9 River Publishing
Founded 1994. Privately owned. Managing directors Nicola Murphy,
Jane Wynn. 100% consumer. Clients include Holland & Barrett,
Superdrug, Harrods. Member APA. www.therivergroup.co.uk
10 Forward
Founded 1985. Subsidiary WPP. Chief executive Sarah Wyse. 98%
consumer, 2% B2B. Clients include Tesco, Barclays, B&Q. Member APA.
www.theforwardgroup.com
11 Illustrated London News
Founded 1985. Subsidiary Sea Containers. Managing director Lisa
Barnard. 68% consumer, 19% B2B, 13% internal. Clients include Orient
Express Hotels Trains and Cruises, South West Trains, Maserati.
Member APA. www.iln.co.uk
12 Caspian Publishing
Founded 1996. Subsidiary Caspian Media Holdings. Chief executive
Mike Bokaie. 100% B2B. Clients include CBI, IBM, CIMA. Member APA.
www.caspianpublishing.co.uk
13 Absolute Publishing
Founded 1997. Privately owned. Managing director Matthew Jackson.
34% consumer, 66% B2B. Clients include Association of British Travel
Agents, American Society of Travel Agents, Ladbrokes.
www.absolutepublishing.com
14 Wardour
Founded 1996. Privately owned. Chief executive Martin MacConnol. 35%
consumer, 60% B2B, 5% internal. Clients include Camelot, JPMorgan
Asset Management, ITV. Member APA. www.wardour.co.uk
15 Story Worldwide
Founded 2005. Privately owned. Managing director Jon King. 88%
consumer, 4% B2B, 8% internal. Clients include Lexus, Medtronic
Pharmaceutical, Bluewater. Member APA. www.storyworldwide.com
16 Future Plus
Founded 2004. Subsidiary Future Publishing. Chief executive Robert
Price. 90% consumer, 10% B2B. Clients include BSkyB, BT Vision, O2.
Member APA. www.futureplus.co.uk
17 PSP Rare Publishing
Founded 2006. Privately owned. Chief executive Peter Moore. 65%
consumer, 27% B2B, 8% internal. Clients include Kia Motors UK,
Somerfield Stores, Training and Development Agency for Schools.
Member APA. www.psprarepublishing.co.uk
18 Ink Publishing
Founded 1994. Privately owned. Chief executive Jeffrey O'Rourke.
100% consumer. Clients include AirTran Airways, CNN, EasyJet.
www.ink-publishing.com
19 Think Publishing
Founded 1999. Privately owned. Managing director Tilly Boulter. 85%
consumer, 15% B2B. Clients include Zoological Society of London,
Preferred Hotels Group, The Royal Society of Wildlife Trusts. Member
APA. www.thinkpublishing.com
20 Zone
Founded 2000. Privately owned. Chief executive James Freedman. 30%
consumer, 50% B2B, 20% internal. Clients include Channel 4, BT
Vision, FremantleMedia Enterprises. Member APA. www.zonecontent.com
21 Specialist Publications UK
Founded 1969. Privately owned. Chief executive Niki Webb. 42%
consumer, 46% B2B, 13% internal. Clients include Peugeot,
Specsavers, Npower. Member APA. www.specialistuk.com
22 Northstar
Founded 2003. Privately owned. Managing director Mark Beazleigh.
100% consumer. Clients include Audi, Fat Face, Mappin & Webb. Member
APA. www.northstarpublishing.com
23 Connect Communications
Founded 1998. Privately owned. Managing director David Cameron. 29%
consumer, 30% B2B, 41% internal. Clients include Institute of
Chartered Accountants Scotland, Law Society of Scotland, BAE
Systems. www.connectcommunications.co.uk
24 Axon Publishing
Founded 1994. Privately owned. Directors Paul Keers, Ellen Brush.
100% consumer. Clients include Marks & Spencer, University of
Bedfordshire, Hildon. Member APA. www.axonpublish.com
25 August Media
Founded 2005. Privately owned. Managing director Mark Lonergan. 100%
consumer. Clients include IKEA, Butlins, City & Guilds. Member APA.
www.augustmedia.net
26 Atom
Founded 1996. Privately owned. Managing director Stephen Quirke. 10%
consumer, 90% B2B. Clients include Royal Institute of Chartered
Surveyors, The Open University, Norwich Union Healthcare. Member
APA. www.atompublishing.co.uk
27 Summersault Communications
Founded 1992. Subsidiary Motivcom. Managing director Gail Franks. 3%
consumer, 11% B2B, 86% internal. Clients include McDonald's, TUI UK,
G4S Security. www.summersault.co.uk
28 Bristol Magazines/BBC Cust Pub
Founded 1997. Subsidiary BBC Magazines/BBC Worldwide. Managing
director Andy Marshall. 90% consumer, 5% B2B, 5% internal. Clients
include Royal Opera House, Cineworld, HMV. Member APA.
www.bbccustomerpublishing.com
29 Sunday
Founded 2005. Privately owned. Managing director Tony Smeeton. 75%
consumer, 25% B2B. Clients include Serco, Toyota, Westfield. Member
APA. www.sundaypublishing.com
30 Bladonmore Media
Founded 2002. Privately owned. Managing director Jonty Summers. 12%
consumer, 88% B2B. Clients include KPMG, Institute of Chartered
Accountants in England and Wales, Instant Access Properties. Member
APA. www.bladonmore.com
31 Brooklands Publishing
Founded 1992. Privately owned. Chief executive Darren Styles. 100%
consumer. Clients include Renault, Vauxhall, Flybe. Member APA.
www.brooklandsgroup.com
32 WordWide
Founded 1999. Privately owned. Managing director John
Chadwick-Jones. 60% consumer, 30% B2B, 10% internal. Clients include
Schuh UK, COI, Skipton Building Society. Member APA.
www.word-wide.co.uk
33 Communikator
Founded 1999. Privately owned. Chairman Henry Weston. 90% consumer,
10% B2B. Clients include L'Oreal, Charles Worthington, Warner Music.
Member APA. www.communikator.com
34 publishingtmw
Founded 2003. Subsidiary Creston. Managing director Chris Warren.
95% consumer, 5% B2B. Clients include T-Mobile, Unilever, RAF.
Member APA. www.tmw.co.uk
35 Aspect Media
Founded 2005. Privately owned. Managing director Roger Wilsher. 60%
consumer, 40% B2B. Clients include Ladbrokes, Institute of Revenues
Rating and Valuation, University of Sunderland. Member APA.
www.aspectmediauk.com
36 Engage
Founded 2006. Privately owned. Chairman Sean Collings. 25% consumer,
75% B2B. Clients include DSGi Business, Thresher Group, Post Office.
www.engagepublishing.co.uk
37 White Light Media
Founded 2001. Privately owned. Managing directors Fraser Allen, Alan
Lennon. 80% B2B, 20% internal. Clients include Scottish Widows, NHS
Scotland, University of Strathclyde. www.whitelightmedia.co.uk
38 Real London
Founded 1999. Privately owned. Managing director Richard Proctor.
100% consumer. Clients include Akzo Nobel, Brintons. Member APA.
www.real-london.com


TOP FIVE FOR GROWTH - BIG AGENCIES

Agency Net turnover Net turnover Change
2006 (%) 2005 (%) (%)

1 Absolute Publishing 4,363,160 3,154,709 38
2 Publicis Blueprint 33,757,000 24,969,000 35
3 River Publishing 18,653,705 14,759,264 26
4 John Brown 57,110,446 49,404,274 16
5 Wardour 4,237,061 3,852,455 10


TOP FIVE FOR GROWTH - SMALL AGENCIES

Agency Net turnover Net turnover Change
2006 (%) 2005 (%) (%)

1 Aspect Media 612,364 243,042 152
2 Communikator 960,000 501,000 92
3 Future Plus 3,800,000 2,100,000 81
4 Zone 3,161,000 1,805,300 75
5 Think Publishing 3,336,822 1,943,239 72

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