FOCUS: CONTRACT PUBLISHING - How to make a contract killing/From publications which would not look out of place alongside consumer magazines to corporate titles, the contract publishing sector is enjoying boom times. Hilary Freeman reports

Britain’s leading supermarkets, airlines and department stores are engaged in a fierce battle for custom and the new weapon of choice is the customer magazine.

Britain’s leading supermarkets, airlines and department stores are

engaged in a fierce battle for custom and the new weapon of choice is

the customer magazine.



Customer magazines are undeniably big business. According to the Audit

Bureau of Circulations (ABC), of the top 15 magazines in the country

with the highest circulation, seven are customer magazines. Top of the

pile is Redwood Publishing’s monthly Sky TV guide with a circulation of

3,513,241 - a figure certain to surprise writers at Emap and Conde Nast.

Other top titles include Brass Tacks Publishing’s Somerfield Magazine

and New Crane Publishing’s Sainsbury’s The Magazine.



The market shows few signs of slowing down, as contract publishers

pursue ever more sophisticated means of soliciting customer loyalty and

advertisers begin to realise their potential.



’I’m certain the market has not yet reached maturity,’ says Sarah

Farmer, director of the Association of Publishing Agencies (APA) - the

trade body for contract publishers of customer magazines.



’It has slowed down a little since the explosion in the early 1990s, but

it’s still growing by about 11 or 12 per cent per year. There are lots

of new contract publishers coming in and existing companies are

expanding. While most companies in the retail sector already have

customer magazines, there are many FMCG companies which don’t.’



Farmer believes that further business may come from smaller companies

which currently produce their customer magazines in-house. ’Our figures

for 1996 show that the contract publishing industry is worth pounds 250

million.



We think that the in-house market is worth that again. We advocate that

companies use contract publishers because they have the best skills and

the greatest experience in one package,’ she says.



This optimism is echoed by the leading players in the market. ’About 18

months ago, we were worried that the market might be about to dry up,’

says Andrew Hirsch, chief executive of John Brown Contract Publishing,

whose portfolio includes customer magazines for Virgin Atlantic,

Debenhams and IKEA. ’But now, bigger organisations - such as high street

banks - are looking for their own customer publications. They realise

their own leaflets and publications can’t compete with the quality of

customer magazines, and they see the advantages of putting all their

customer information into one source.



’I believe that the only factor that could cause a downturn in the

market is an economic recession - and there’s no sign of that.’



Jim Addison, managing director of Specialist Publications, and a member

of the British Association of Communicators in Business (BACB) agrees

that quality is the key to the future of contract publishing.



’The market won’t stop growing, provided we maintain quality, both in

terms of journalism and design. We employ the ’WH Smith test’ to all our

publications. If one of our magazines was accidentally delivered to the

WH Smith magazine rack we have to be sure that they wouldn’t notice the

mistake. We’re competing with newsstand titles for customers’ leisure

time, so we have to share the same values.’



While contract publishers unanimously believe the future looks rosy, the

direction the industry will take is a matter of some debate. Publishers

are particularly divided on the importance of advertising in customer

magazines. Farmer of the APA believes advertising revenue will grow, as

advertisers begin to appreciate the potential of customer titles.



’At the moment, they’re not very clued up. Media buyers aren’t sold on

the idea, and rate cards are not as high as consumer titles. We have to

convince them that customer magazines are read and advertising in them

does work,’ she says.



But Craig Waller, managing director of Premier Magazines, says

advertising will have a limited role. ’Advertising does off-set some

publishing costs and helps to give customer publications the appearance

of ’proper’ magazines, but its growth will be confined. Some clients

don’t want a surfeit of third party advertising in their magazines. They

don’t want to clutter up customers’ minds with other people’s sales

messages,’ he says.



Communicating a client’s sales message lies at the heart of contract

publishing. As new marketing strategies are developed, they filter down

to the customer magazine market. Julian Treasure, chairman of the TPD

group, is convinced a new breed of agency will emerge in the next five

years.



’We have just repositioned ourselves as a ’customer communications

agency’.



Our role is to help clients establish a dialogue with their

customers.



Customer magazines are a big part of this, but they’re not our only

tool,’ he says.



Treasure believes segmentation - targeting magazines at defined groups

of people - will be the biggest trend of the future. Some agencies have

already taken this route. The Publishing Team has produced male and

female versions of its two magazines for Barclaycard customers and is

sending out several different editions of its Lombard Insurance

magazine, according to the customer’s age or lifestyle.



However, Hirsch does not support segmentation as a strategy: ’It’s just

a very clever marketing word to try to get people to spend more money.

The key to the success of contract titles is their strong personalities.

If we start segmenting, we will create split personalities. We should

concentrate on producing one good quality magazine.’



Matt Prior, new business director at Redwood Publishing, disputes

this.



He claims the future for customer magazines lies in

’personalisation’.



This goes beyond segmentation by targeting magazines not at groups, but

at individuals.



’We’re at the forefront of this trend,’ says Prior, whose portfolio

includes magazines for Marks and Spencer, Safeway and Harvey Nichols.

’In order to personalise magazines, we need up-to-date technology and

top-notch information. The advent of loyalty cards and the like means

information about customers is growing day-by-day.’



Prior admits there are dangers in taking personalisation too far: ’There

is a theory that customers don’t like being put into categories. People

often want to find out about things outside a narrow base. We have to

find out what customers actually want and keep track of them. The key to

our business is that customers want to feel valued, not bandied into a

group they don’t feel they belong to.’



New technology doesn’t just allow companies to compile detailed

databases of customers, it also provides corporate publishers with a new

means of producing magazines - internet and extranet sites can transmit

information to customers at a low cost, and with increasing ease.



TPD already employs 27 staff in its interactive communication division,

producing web sites for clients including United Airlines and

Microsoft.



But Treasure says it is unlikely that interactive publishing will ever

replace printed magazines: ’It’s just another medium for communication

which will work alongside traditional magazines.’



The customer magazine market may be expanding in cyberspace, but there

is also room for growth in the real world. The current trend towards

multi-nationalism provides new opportunities for the contract publishing

sector.



The Illustrated London News Group has just produced a magazine for the

United Airline Passengers Association, which has been mailed to

customers in 100 countries.



Director Andrew Sculthorpe says customer magazines are one of this

country’s best exports: ’We are internationally respected for our

customer publishing expertise, for our excellent editorial and design

skills.



’I believe there is going to be a worldwide explosion of the market,

with multi-distribution of publications. Britain leads the way in the

customer magazine arena.’



PETS WIN PRIZES: ANIMAL TRAX BRINGS IN THE ADVERTISERS



Contract and corporate publishing are often spoken of in the same

breath, but many publishers believe they are two very different

disciplines.



A glance down the list of the major players supports this theory as most

specialise in either customer or staff publications.



Helena Rhodes, director of corporate publishing at Dewe Rogerson, makes

a clear distinction between contract titles (customer publications) and

corporate titles (staff publications).



’Contract titles have a very large potential readership. This gives a

company the opportunity to fund the publication, all or in part, from

advertising. The sheer size of the operation means that different

disciplines are brought into play, such as advertising sales, marketing

specialists and account handlers, alongside the core editorial and

design staff.’



She adds: ’In corporate publishing, companies must convey both internal

and external communication messages to smaller audiences who might be

employees, pensioners, customers, opinion formers or shareholders. They

may well have a marketing element, but usually in a softer, subtler

way.’



Rhodes says that the client departments overseeing the two types of

publication are also likely to be different. ’In terms of budget,

contract publishers are probably fighting with marketing and advertising

budgets and corporate publishers with other external or internal

communications budgets. Consequently, contract publications are overseen

by the marketing or advertising departments and corporate publications,

by human resources.’



However, Tim Buckley, managing director of AB Communication Group, which

publishes both customer and staff magazines, says: There is not a huge

difference in the two areas. They complement each other, it’s all about

understanding the role the magazine has to fill, understanding the

requirements of the audience, whoever they are.’



He adds: ’If you can work for an external audience, you can work for an

internal one. The end result of both is to further develop the clients’

business. And often, if staff are happy, customers are happy.’



One of AB Communication Group’s magazines, Animal Trax, is distributed

free to 3,000 pet shops around the country by pet product wholesaler,

Wunpets. But unlike its other publications, Animal Trax is entirely

supported by advertising and an agency is employed to sell space.



’It’s quite unlike anything else we do. But as long as it continues to

be commercially viable, we’ll continue to publish it.’



SPECTRUM: ADDRESSING A CHANGE OF STATUS WITH A NEW LOOK



When a company merges, a good staff publication can often be the most

efficient way of unifying personnel, raising morale and creating a new

company culture.



This was the reasoning behind the Alliance and Leicester Group’s

decision to find a new agency to put a fresh slant on its staff

magazine. Having recently bought Girobank and changed its status from a

building society to a bank, the Alliance and Leicester needed its staff

magazine Spectrum to reflect its new identity.



After receiving pitches from several agencies, the Alliance and

Leicester signed a contract with Charles Barker Publishing. They now

have two issues of Spectrum under their belt.



’The Alliance and Leicester wanted a revamped magazine, not a

re-launched one, so we took the existing publication - a monthly, A3

sized, 12-page, full colour magazine - and brought our own style to it,’

says Martin Green, account director at Charles Barker Publishing. ’Among

other things, we have increased the news coverage and introduced an

’open to question’ feature in which we question a senior figure in the

bank about customer service.’



Green says Spectrum’s key aim is to deliver the Alliance and Leicester’s

corporate message, by acting as a mouthpiece between management and

staff.



But, as a multi-site operation, with employees in offices and branches

all over the country, this has proved to be quite a challenge.



’We had to talk to all the staff and find out what their wants and needs

were. I’ve certainly burned some shoe leather getting out there to visit

the major office sites. We’ve also established a team of correspondents

around the country as our news gathering force. This helps us to get a

good flow of stories, particularly human interest stories.’



Green believes that in order to produce a good staff publication, the

writers must immerse themselves in the client’s company culture. ’We try

to keep the magazine as much an independent mouthpiece as possible,’ he

says. ’But you really have to get under the skin of the client.

Sometimes I almost feel like an employee of the Alliance and

Leicester.’



Now onto its third edition, Green says every issue of Spectrum is better

than the last, as knowledge grows and the relationship with staff become

stronger. His initial enthusiasm for the new publication shows no sign

of waning. ’No two days are the same in contract publishing,’ he

says.



’And I still get a buzz when the file copy arrives.’



WARDOUR COMMUNICATIONS: WHEN IT PAYS TO SPECIALISE



London-based agency Wardour Communications is bucking the trend in

corporate publishing for diversification.



Rare among its counterparts, the Soho agency has carved out a niche for

itself in the financial services sector, with clients including NatWest

Bank, Commercial Union and stockbroker Charles Schwab. Most other

corporate publishers assure their continued growth and revenue by

signing contracts with clientele across a diverse range of markets,

believing it is publishing expertise, rather than industry knowledge,

that draws new clients. Wardour Communications has chosen to

specialise.



Established 18 months ago, the company’s financial expertise stems from

its staff. It was established by ex-Financial Times journalists and

financial trade press journalists, who saw a gap in the market for a

specialised publishing operation.



’We thought we would concentrate on the area where we had the most

knowledge and could make the biggest impact,’ says director, Martin

MacConnol. ’We realised that our understanding of the issues involved

gave us an advantage over other agencies. We may not have the longest

track record but, as individuals, clients can be confident that we

understand their business.’



MacConnol says that such in-depth industry knowledge and experience has

other benefits. ’As an agency, we’re not just responsive to our clients’

needs. We can also be proactive. And we have lots of contacts in the

financial sector and a large network of top quality financial

journalists who we can use as freelancers.’



Wardour Communications is growing rapidly, both in terms of reputation

and full-time staff. Despite its tender years, it has beaten opposition

from long-established agencies to win prominent accounts. It has already

picked up two awards, including a PR Week Award for its work on Nat West

Life’s ’Changing Nation’ Project.



MacConnol believes there is little danger that the agency will run out

of potential clients: ’The financial services sector is booming,’ he

says.



’More and more companies, such as the big supermarkets, are getting

involved in financial services.’



He does, however, concede that specialisation can lead to a conflict of

interest between clients. ’There will come a point where we can say ’now

we have enough clients in this sector’. We will then look outside

financial services, but stick with companies of the same reputation as

our existing clients - that is blue chip companies which work alongside

our existing clients in the FTSE 100,’



He adds: ’Maybe we’ll end up specialising in servicing the needs of big

corporations, they’re almost a sector in themselves.’



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