WORLD: MEDIA ANALYSIS - UK custom publishers make a mark on US magazine market
campaignlive.co.uk, Friday, 31 October 2003 12:00AM
UK publishers cannot rely on being British to win them accounts.
There's an established tradition of British media people working in New York. From Anna Wintour at Vogue to Andrew Robertson at BBDO, most thrive and prosper in the Big Apple.
However, in the past few years a new trend has started to emerge: British media companies opening overseas offices in the US. On this score, being successful is much tougher. They soon realise that doing business in the US isn't as similar to the UK as the common language might lead you to believe.
The latest wave of New York agency launches has been in customer publishing (known as custom publishing in the US). It's not even a wave big enough to surf as yet, as there are only two, which, coincidentally, are the biggest contract publishing players in the UK: Redwood and John Brown Citrus Publishing.
The latter has recently attempted to penetrate the soul of New York with the launch of B, a magazine for the iconic department store Bloomingdale's. B launched on 22 October.
It's not hard to understand what has motivated the two companies to move into the US. While the now mature UK market is worth a respectable £313 million, US companies spend $20 billion on custom magazines, according to the Custom Publishing Council, and that is still a fledgling market.
But the US market is structured very differently. Only $1.5 billion is spent on magazines produced by external agencies, with the vast majority created with internal resources. And in the US, the major mainstream publishing houses, such as Time Warner, Hearst and Meredith, dominate the custom publishing world, capitalising on their existing relationships with advertisers.
The rest of the market comprises publishing agencies that are part of major marketing groups (which includes the Omnicom-owned Redwood) and independents.
Redwood's international expansion began in 1999, when it formed a joint venture with the Canadian publishing company WSP International. Although the new Redwood International was based in Toronto, it sold its services across the whole of North America, picking up business from the retailer JC Penny and Dell.
While those two accounts have been lost, Redwood now produces titles for clients such as Home Depot, Grow for Scotts, Kraft's Food & Family, Sears and Monsanto from offices in Chicago, Atlanta and New York. New York was the first US office to open, in 2001.
John Brown Citrus has a slightly longer history in the city, having opened in 1999, and it too has been hit by the downturn in the US economy. During the good times around the turn of the millennium, it was producing titles, for clients including the retailers Williams Sonoma and Ikea, that were also available on newsstands.
Now, John Brown Citrus has a turnover of $10 million a year and has three accounts - the US Army (for which it produces a title called Drill), Nestle (Very Best Baking), and Bloomingdale's B magazine.
So what inspired Bloomingdale's to launch a custom title for one of America's best-known brands through a British company?
Frank Berman, the vice-president of marketing at Bloomingdale's, says: "We felt John Brown Citrus had the right combination of editorial talent as well as the best finance terms. We were particularly impressed with a previous title it had produced, Taste for Williams Sonoma, which convinced us that the people there understand the particular demands of a store such as ours that encompasses home and fashion goods. John Brown Citrus just happens to be a British company - that played no part in our decision."
As US marketers are relatively new to customer publishing, Redwood and John Brown Citrus and their home-grown competitors spend a lot of time persuading marketers of the merits of the medium. "It's a slog persuading marketers in the US to put their money into one-to-one techniques rather than television, for example," James McLeod, the president of Redwood International, says.
And while their British counterparts increasingly regard a magazine as one part of the CRM process, for American marketers it is often still an unintegrated add-on. Proportionally more custom titles are sold to consumers in the US than in the UK, reflecting the US attitude that they should be self-financing, rather than a marketing investment.
And where it is accepted as an investment, proving the return on investment is an essential part of any agency pitch in the US, to an even greater degree than it is in the UK. "Because of the vast size of the US market, clients can't go on gut feel in the way they can in the UK," McLeod says. "Consumers are so different across the various states that marketers need to be shown the quantitative proof that they will respond more positively to magazines."
Part of the problem in selling the medium is that US consumers are used to having their mail boxes clogged up with all manner of free publications.
At this time of year in particular, retailers send out vast quantities of catalogues.
This is also the challenge for the British publishers - titles are far less subtle, more focused on shifting product than they are in the UK.
"It's not enough for magazines to look good and read well. There have to be lots of calls to action too," Andrew Hirsch, John Brown Citrus' chief executive, says. "It's a lesson for all of us, really. We always say that they're sharpening us up and we'll be able to re-import that commercial savvy back into the UK market."
Nevertheless, the biggest problem for the two companies remains their alien status. Not growing up in the US means it is harder to understand the brand values of potential clients (although recruiting local staff is helping). And in many cases the ultimate client decision is made by chief executives who are more familiar with the brand names of the giant US publishing houses than a couple of British johnny-come-latelys.
Although both Redwood and John Brown Citrus have great case studies from their work in the UK, they use them sparingly, mindful of needing to be seen as relevant. Mark Stewart, the chief strategy officer at Universal McCann, says: "I hadn't heard of either of them. Experience is great, but I'd rather have an agency with three years' experience in the local market than ten years' in another."
Both McLeod and Hirsch are very cautious about over-playing their Britishness.
"They like us. But it gets you maybe ten minutes (with a potential client)," Hirsch says. "After that, it's all about the numbers."
Typical advertisers: The store's fashion suppliers, plus companies such
as Mercedes-Benz and W hotels
Initial print run: 300,000
Ratecard rate for A4 page: $15,000
Cover price: $3.95 or distributed free to high-spending loyalty
Rivals: Hirsch compares the title to InStyle and Italian Vogue. But it
will be judged against Bloomingdale's major rival Saks' new magazine,
which is to be launched imminently, by Hearst
This article was first published on campaignlive.co.uk
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