The 1.5 billion dollar boom - Custom publications are a quick and ...

'Everybody wants to have a magazine,' says Dick Stockton, vice president and general manager of the Forbes Special Interest Publications Group.

'Everybody wants to have a magazine,' says Dick Stockton, vice president and general manager of the Forbes Special Interest Publications Group.

No one knows exactly how big custom publishing is and the definitions of what it is vary. The Magazine Publishers of America (MPA) has formed the Custom Publishing Council (CPC) to measure the phenomenon, and they expect to have some figures early in 1999. Meantime, FOLIO Magazine gave estimates of the size of the business ranging from the MPA's low of several hundred million dollars to $1.5 billion, attributed to John Caldwell, president/CEO of Custom Communications Partners. Simon Kelly, president of Seattle-based Fluent Communications and co-chair of the new CPC, predicts the business will reach $3 billion by the year 2000.

The PR opportunities are virtually limitless and the publication models varied. 'The maddening but exhilarating thing about the business,' says Stockton, 'is just when you think you've got it nailed down, something else crops up.'

How to get started
In this growth period, PR firms are both doing custom publishing and commissioning it. In some cases, corporations or other organizations negotiate directly with custom publisher. Often, there's a PR firm in the middle.

In short, there's no single, correct way that a custom publication gets started.

In the age of knowledge management, a number of PR firms have found a comfortable niche in custom publishing. That's what Steve Kissing, PR director at Hensley Segal Rentschler (HSR) in Cincinnati believes. As industries become 'commoditized, the point of differentiation becomes 'what do you know?' A custom publication is a way to demonstrate what a company knows,' he says.

PR firms like HSR often happen upon the need for a custom magazine and pitch to develop it because they do other work for a particular client.

HSR can make a solid contribution to a magazine's content because it knows its clients' businesses inside and out, claims Kissing.

Mainting credibility
What about credibility when the magazines so clearly serve the interests of the client? 'If they are to be meaningful and effective, they cannot be puff pieces,' he says. 'Before we initiate a custom publishing program with a client, we work through that issue. It cannot smell like an internal publication or sales piece. We bring in outside voices.'

The fact that advertisers buy space in such publications, he adds, speaks to their credibility. In fact, commercial publishers have approached HSR about buying some of their custom publications, Kissing says. HSR receives pitch letters with story ideas from other agencies, a sign that the magazines are received in the marketplace as legitimate publications.

Who foots the bill for custom magazines? Clearly, it depends on the size and scope of the publication. The magazines are just one of the services PR firms and others provide to clients. Ads can help to underwrite custom publishing, Kissing says, but at HSR, it's not entirely ad supported.

Some magazines, in fact, don't have any advertising at all. HSR's publication for Makino Tool/Die, for instance, only carries 'house' ads for the tool and die machinery maker (see sidebar).

Typically, the custom pub is initially distributed by mail to the client's own database and to potential customers, lists which HSR may supplement by purchasing other lists. Once a publication is up and running, distribution increases to include 'true' subscribers, who directly request the publication.

All HSR publications are now available on the Web as well as in print.

'We feel that's a must,' adds Kissing. Electronic publishing, in fact, now precedes the print editions. Advantages of the Web for custom publishing are obvious: articles can be expanded; previous issues can be searched; there are opportunities to provide links within the publication.

Appropriate for PRs
Mark Willis, executive vice president and a partner at Watt, Roop (WR), in Cleveland, agrees that custom publishing is an appropriate activity for PR firms. WR's current publishing projects advance the image of their clients. From that standpoint, they fall into the traditional view of PR, like any other controlled communication vehicle a company might underwrite.

'So long as the PR agency has the in-house capability, (custom publishing is) simply another opportunity to help the client,' he says.

One of Watt, Roop's more challenging custom publications, Annual Meeting News, has won two Silver Anvil awards from the PRSA. Produced for the Steel Service Center Institute (SSCI), a WR client for 16 years, it is the equivalent of a show daily. Editorial content consists of prewritten articles and coverage of the preceding day's events slotted into a 12-16 page news hole. It is written and produced overnight to appear on the breakfast tables of the 1,200 to 1,500 upper echelon executives in attendance on each of the four meeting days. It is also distributed after the meeting to all 2500 members.

'Before we took it over 12 years ago,' Willis said, 'a trade publisher was doing it and losing money. Like naive PR people, we thought, 'hey, we can do that.' ' WR lost money at first but soon figured out a way to break even. By the fourth year it was making a profit from ad sales to SSCI member companies and their suppliers. Willis attributes his firm's success with the publication to having SSCI as a client. 'We understand that industry, and it makes writing and selling the publication that much easier.'

Brokering the deal
Sometimes PR firms broker custom publishing deals. Padilla Spear Beardsley (PSB) turned over a custom publication for their client Allen Bradley Company to Putnam Publishing, a publisher of trade magazines - but not before agency vice president Steve Sterling had done the homework.

Allen Bradley is a multibillion producer of auto control systems - it makes 350,000 products and has a number of complementary partner companies.

Sterling realized that no customer understood the full breadth of the products; the partner companies provided an ad base to support a publication; and the client's typical communications channel - trade media - was shrinking, leaving fewer ways to tell its story. He suggested a magazine to the client, who wanted an outside publisher to give the publication a higher credibility factor.

Where the PR came in, Sterling explains, was in two years of thorough testing of the idea's validity, starting with a telephone survey of 150 customers. Asked if they would find an Allen Bradley magazine useful, for example, 98% said 'yes, they would read it.' PSB followed up with six focus groups around the country, with results that mirrored the telephone survey exactly. Participants didn't want a marketing piece, but would welcome a magazine that helped them to run their Allen Bradley systems better.

Top publishers in the industry were invited to bid on the magazine. At the end of the process, Allen Bradley Company agreed to fund the publication for three years. PSB's critically important input continued when they directed the publisher to adjust its proposal on editorial content to reflect the agency's research into customer needs and wants. From the outset, PSB had provided the vision for a successful publication.

AB Journal is distributed quarterly, at no charge, to Allen Bradley 's 60,000 customers, who qualify by requesting it. It looks and feels like a trade magazine, Sterling says, with no hint of corporate image or corporate communications about it. The agency submits stories to AB Journal as it would to any other independent publication. Publisher studies confirm high readership, high retention, and high pass-through. Another measure of success: the response on advertisements is about three times industry norm. AB Journal does exactly what it was designed to do, and PR helped to achieve that.

Nutty business
Custom publishing is 'a nutty business,' says Dick Stockton at the Forbes Special Interest Publications Group (FSIPG). 'If you talk to six people, you're going to get six different but similar points of view about what it is.' Everyone seems to agree, however, that a magazine must have real and fundamental value, even as it is fulfilling the marketing objectives of the organization. 'If it doesn't,' Stockton said, 'it's not going to be around long. They're expensive and, in more cases than not, the client is going to be paying that bill.'

Forbes will typically work out a mission for a magazine early on, even before editors are assigned to determine topics, stories and the angle on stories. Next, journalists are found to develop the stories. 'We will usually show final copy to clients and it's usually not touched,' Stockton said. 'The guideline we always follow is that the work you're developing has simply got to be well worth a person's time to read.'

One example of Forbes special interest publications is a magazine for Four Seasons Hotels & Resorts that two years ago was named the best custom-published magazine in North America by Folio (see sidebar). Another is Executive Edge, a new publication created for the Gartner Group, which was described by Stockton as 'a name without peer in the world of information technology.'

'We service a variety of customers and projects, and custom publishing is one part of that,' says Jill Bernstein, Director of New York PR at Meredith Publishing Group (MPG), a part of Meredith Integrated Marketing.

Meredith will provide a creative concept for a custom publications but listens very closely to the client as to purpose and content. Clients are primarily providers of products and services for the home and family.

MPG developed Mature Outlook for Sears to support the company's value-added Mature Outlook Club for 50+ customers. The bimonthly has a whopping circulation of 725,000, and club members regard it as a number one club benefit. In addition to stimulating hundreds of millions of dollars annually in purchases of Sears products, it generates as much as $8 million a year in ad revenue.

Another MPG success story is World Traveler, the inflight magazine for Northwest Airlines. Three years ago, Northwest asked the group to revitalize its sagging inflight magazine. MPG completely repositioned, redesigned, and reformatted this monthly, putting the editorial focus on business to engage the interest of the airline's affluent and sophisticated business travelers. World Traveler moved from 'worst' to 'first' in ad pages for all inflight publications, according to the Publishers Information Bureau.

Some of MPG's other custom publications are Bond, for the Lutheran Brotherhood, and Your Cat, for IAMS.

HSR's Kissing calls 'thought leadership' an important factor in custom publishing. It serves as a means for organizations to differentiate their products and services by helping customers find new or broader uses.

'Client and customer needs are fueling growth,' says Sterling at PSB.

'There is no better way (than custom publishing) to convey technical information when a client has a user base that needs it.'

WR's Willis sees the involvement of PR firms as a factor in custom publishing's boom. The specialty has been profitable, which showcases its successful publications as a springboard to approach other clients.

'Many corporations and serious marketers are looking to real journalism to reach target audiences of choice on a one-on-one basis. The business is growing quite robustly,' reports Stockton at FSIPG. Catherine Sabino, editor-in-chief for the group, views brand identity as a driving force behind the growth. 'Traditional magazines have a tremendous amount of ad clutter,' she says. 'To focus on the people you want to reach, there are few better ways to do it than with a special interest publication.'

Case study: Four Seasons Hotel

Publisher: Forbes Special Interest Publishing

Client: Four Seasons Hotels & Resorts

Title: Four Seasons Hotels & Resorts Magazine

Frequency: Quarterly (up from being a biannual in 1992)

Editorial focus: Travel and lifestyle; the mag looks at contemporary affluent living styles, new ways to enjoy success.

Distribution: Four Seasons hotel rooms, globally; moving into Eastern Europe, Latin America. There are no foreign-language editions; most travelers read English.

Audience: Affluent and sophisticated: Men 58% women 42%, average age, 45; average household income, $244,000; average net worth, $1.6 million; job titles: 77% are owners, partners, CEOs or other very high level management Circulation: 50,000 copies are printed

Comment: Named best custom-published magazine in North America by Folio

Content: Generated by Forbes, which assigns articles and provides all editorial functions. Engages top-level writers and journalists, e.g., people who write for The New York Times, but weighted towards English contributors so as not to be 'too American.' It will not write about a competing hotel and is very up front about this policy.

Design and production: Forbes

Advertising sales: Forbes

Case study: Makino Tools

PR firm: Hensley Segal Rentschler

Client: Makino Tool/Die Division (Mason, Ohio)

Title: Competitive Mold Maker Frequency: Twice a year

Distribution: Via mail, Web, trade shows, sales force leave-behind, corporate seminars

Circulation: 15,000 in print; difficult to quantify on the Web

Editorial focus: Process-oriented, with a bent towards time-to-market to shorten lead times.

Target audience: Mold builders in the plastic injection and forging industries Began with customers/prospects and has expanded to include academics, consultants, others.

Comment: Now moving into its sixth year. Makino is clearly convinced that this is a worthwhile enterprise.

Content: Generated entirely by HSR after discussion of table of contents with the client, e.g. subjects to cover, companies to be profiled, etc.

Design: HSR responsible for design and oversight of production/distribution.

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