SUPPLEMENT: CHOOSING AN AGENCY; Choosing a publishing agency

By MEG CARTER, campaignlive.co.uk, Friday, 13 September 1996 12:00AM

The contract magazines sector has begun to shake off its outdated image. Meg Carter reports on a maturing industry and reveals how clients pick their publisher

The contract magazines sector has begun to shake off its outdated image.

Meg Carter reports on a maturing industry and reveals how clients pick

their publisher



Customer loyalty may be all the rage, but only a minority of British

businesses use contract magazines to cement relationships with their

clientele. All this is set to change, however, with a range of

initiatives designed to boost the standing of the medium and give

greater guidance about which contract publisher to choose and how to use

it.



Contract publishing has come a long way since the early days when

customer magazines meant little more than an out-of-date, coffee-stained

copy tucked behind the sick-bag on long-haul flights. Then, editorial

was - to say the least - mediocre, with pages dominated by house ads and

duty-free promotions. How things have changed.



Today’s in-flight titles are better produced, packaged and written and

tightly target different groups of customers. Most now carry third-party

advertising. And a growing number are even being sold to the public as

well.



According to the latest figures available, the UK contract publishing

business is worth about pounds 120 million, based on the turnover of the

15 members of the contract publishers’ association, the Association of

Publishing Agencies.



In fact, this is likely to be a significant under-valuation. ‘We believe

substantial sums do not go via APA members - fees for post and printing,

for example, are often paid direct,’ says Julian Treasure, the APA’s

chairman and founder of the publishing agency, TPD.



Market growth to date has been fuelled by a number of factors. First,

there is the growing interest in database marketing and customer loyalty

campaigns. Andrew Hirsch, the managing director of John Brown

Publishing, whose contract titles include Virgin Airlines’ Hot Air, the

Dorchester magazine and Classic FM Magazine, also points to the

increasing diversification of larger companies through merger and

acquisition.



‘Loyalty cards are all well and good, but in isolation their

effectiveness is reduced,’ he argues. ‘A regular customer magazine

reminds customers of the benefits of using that card.’ Magazines also

offer an opportunity for promotions and cross-promotions, competitions

and special offers. Hirsch adds: ‘Cross-selling is becoming important in

larger organisations as divisions merge or are bought.’



Meanwhile, contract publishers have become increasingly active. ‘A

number of us now attend the Marketing Forum. And our investment in

above-the-line advertising is growing, too,’ Hirsch says. This has

fuelled interest in the industry and strengthened its credibility, as

has growing interest from media organisations outside the traditional

contract publishing sector - such as advertising agencies and consumer

publishers.



Today, three of the largest contract companies - Redwood, Forward

Publishing and Premier Magazines - are owned by the Abbott Mead Vickers

group, M&C Saatchi and Omnicom, respectively. Other recent moves include

the National Magazine Company’s decision to move into the contract arena

and Conde Nast’s joint venture with Forward.



‘This has been good for the whole industry - more people to talk up what

we do,’ Hirsch says. And the closer involvement of consumer publishers

has boosted the quality of editorial, production and design in customer

magazines.



However, the largest question contract publishers now face is how to

activate the demand latent in British businesses. For there remains

significant scope for market growth according to APA research conducted

last year, which revealed that just one in ten British businesses has a

customer loyalty magazine, despite a growing interest in relationship

marketing.



One route is industry initiatives. ‘Advertisers are not as well briefed

as they could be,’ the APA director, Bea Denton, believes. ‘And this

despite the success of larger titles - such as those from Ford and Sky’s

TV Guide - which both have mammoth circulation, far in excess of many

consumer titles.’



The APA is now taking serious steps to boost the industry’s profile. Its

first conference, due to take place in February next year, aims to

encourage advertisers and marketers to discuss magazines’ role in

loyalty programmes. By then, the association will have also completed

research into attitudes to and expectations of customer magazines -

including an opinion leaders’ survey and a Millward Brown study to

evaluate consumers’ responses to customer magazines. It will also have

data on whether the medium boosts loyalty.



‘We’re pretty light on research at the moment,’ Denton concedes. ‘But we

are working to change this and to encourage prospective clients to

approach us first as a way of sourcing information about publishing

agencies. While we cannot recommend one of our members above another, we

can offer a centralised source of credentials. It’s a logical step.’



Other schemes are being undertaken by individual publishers. Most are

actively targeting new sectors of business. While the industry’s origins

lie in the airlines, financial services and automotive sectors, recent

growth has come from luxury goods and fmcg brands. Now, public sector

organisations - including health authorities and hospital trusts,

utilities companies and sports and leisure businesses - are seen as

‘hot’ leads.



Redwood, which publishes titles for organisations as diverse as English

Heritage, Abbey National, BT and Harvey Nichols, is encouraging clients

to adopt a more creative approach to their magazines. ‘We are already

seeing a move towards segmentation,’ says Redwood’s managing director,

Mike Potter. TSB, for example, has now identified four different groups

of readers depending on which banking services they use, and is

tailoring editions of its magazine accordingly.



Meanwhile, TPD is one of a growing number of publishing agencies

considering the potential of media convergence. It recently set up

Fusion, a specialist division to develop interactive opportunities such

as online Websites, kiosks, CD-Roms and e-mail lists. ‘We hope it will

account for 50 per cent of our turnover by the end of the decade,’

Treasure says. He believes there are significant opportunities to expand

business openings abroad: ‘The UK really is leading the field in this

area. Already, lots of us are developing multi-lingual products.’



Despite the industry’s best efforts, advertising agency perceptions of

contract publishing and its worth lag behind. A key issue which remains

to be addressed is just how to convince media buyers that contract

magazines are a viable advertising medium. With larger magazines now

enjoying circulations in excess of many consumer titles, they represent

an under-used advertising medium, Potter maintains.



Third-party advertising enhances a customer title’s credibility by

making it more like a ‘real’ magazine. But it also enables the client to

recoup development and productions costs. ‘Only five magazines in the UK

currently reach more than 10 per cent of the UK’s ABC1 adults - these

include M&S magazine, Sky TV Guide and the AA’s magazine,’ Potter says.

M&S and Sky TV Guide generate about pounds 700,000 in advertising

revenue each issue. Others hope to emulate their success.



Nicola Murphy, marketing director of River Publishing - whose clients

include BMW - says many ad agencies snootily dismiss contract magazines

as little more than direct mail. River is a relative newcomer, launched

just two years ago, but already claims an annual turnover of more than

pounds 7 million. ‘A few see them as a viable medium because of the

volume circulated, but many media planners and buyers say, ‘It’s free,

forget it,’’ she adds.



According to Murphy, the success of Sainsbury’s: the Magazine has

challenged attitudes. ‘Increasingly, agencies recognise that if their

clients sell products in Asda, it makes better sense to promote these

products in Asda’s magazine than in, say, Good Housekeeping,’ she points

out. It’s now up to contract publishers to ensure they continue to

recruit the best talent and encourage an improvement in standards.



Dialogue



Published by Redwood Publishing for Abbey National



Abbey National first launched Home Owners Advantage, a customer magazine

for mortgage holders, six years ago. After two years, it decided to re-

launch the title as Dialogue. It is now published three times a year and

circulated to 1.1 million Abbey customers and around 200,000 more which

the building society recently acquired through the acquisition of N&P.



‘Its main aim is customer retention,’ Abbey National’s group campaign

manager, Marian Chapman, explains. ‘It’s a way of keeping in touch -

especially with those who rarely visit our branches and use direct debit

to pay. It adds value and gives them a little extra.’



Editorial content is homes- and lifestyle-based, shaped to appeal to

customers’ interests through regular questionnaires which go out to

200,000 people with every issue. But as well as entertaining and

informing, Dialogue also plays a role in cross-selling other Abbey

services, Chapman says.



Abbey National appointed Redwood Publishing to take over the Dialogue

account in 1994 from its previous contract publisher, HHL. Style and

content have since been modified, although the approach remains the

same.



Chapman hopes Dialogue will evolve through segmentation, but

acknowledges ‘it’s still early days’. Every change is thoroughly

researched beforehand to ensure the balance of all content is right.

This applies to all third-party advertising, too. Quality control is a

priority so trust in the contract publisher was a major element of the

selection process.



Abbey’s policy is to review all its agencies regularly to ensure it is

getting the best ideas and value for money. It also has standard pitch

procedures, which it used when it chose Redwood. In total, four

publishers were invited to pitch.



Publishing expertise was a prerequisite, but demonstrable experience in

advertising sales was also important. ‘We have to ensure the quality of

advertising in the magazine reflects the quality of other content and

brand values we wish to convey,’ Chapman concludes.



O magazine



Published by TPD for Orange



Orange wanted its customer magazine to reinforce its brand values and

build loyalty among subscribers. Tone was critical: ‘We just couldn’t

afford to be self-congratulatory, like in a newsletter,’ Orange’s

customer communications manager, Karen Mote, explains.



She selected seven publishing agencies by word of mouth, drawing up a

final shortlist of four who were invited to pitch. Each was assessed by

a team of Orange executives from all departments, not just marketing.

They were judged on 15 criteria.



‘We drew up a scorecard detailing things like creativity, cultural fit,

compatibility, their approach to us and their understanding of

technology,’ Mote says. While Orange is unquestionably a technology

brand, the company sought a publisher capable of communicating in lay

terms and creating a lifestyle rather than a hi-tech magazine brand.



‘TPD convinced us it could get this balance right,’ she says. Other

points in its favour included an open-books policy - ‘essential as we

would be spending more than pounds 1 million a year, so we wanted to

know exactly where our money went’, and its relatively small size. ‘We

knew we would be important to them,’ Mote says.



Each contract publisher that pitched was paid because, according to

Mote, ‘only that way can you ensure you get the best results’.



Orange works with 25 marketing, promotions and communications agencies

so the ability to fit with these and work as a team was also important.

‘We encourage all our agencies to work together,’ Mote explains. ‘We run

copy and creative workshops to ensure an integrated approach to each

activity.’



O is now published three times a year and is mailed direct to bill

payers. More than 500,000 copies of the October edition are due to be

distributed next month. It carries advertising from other companies -

essential to lend the title credibility, Mote believes.



BMW Magazine



Published by River Publishing for BMW



BMW has distributed a customer magazine in a number of foreign markets

for the past four years and first tested an Anglicised version in the UK

in 1994.



The magazine was properly launched here in January 1995, although

produced by a German publisher. The decision was taken to expand the UK

content earlier this year and River Publishing was appointed to develop

the title after a five-way pitch.



‘The magazine is distributed as part of the BMW Emergency Service Card

programme, which goes to every new customer of a BMW car for the first

three years, or new bike owners for a year,’ BMW UK’s direct marketing

manager, Richard Downes, says. The core remains German-originated, but a

growing volume of editorial is now sourced and designed in the UK.



‘The longer term plan is to integrate it more into our mainstream

marketing activities, rather than seeing it as a standalone product,’ he

adds.



After a non-paid-for pitch, River was selected because of its market

knowledge and fresh approach. ‘We received a startling range of

different approaches from the publishers that pitched, but favoured the

one that was least predictable and most dynamic,’ Downes explains. ‘We

didn’t want this to be ‘just another contract magazine’.’



The next edition of the magazine, which goes out this month, will be

distributed to 100,000 people. Downes sees it developing through

segmentation, ‘perhaps with different editions targeting customers

according to their position in the purchasing life-cycle’.



Future editions will continue to carry advertising and Downes hopes to

develop subscription revenue - although the bulk of copies will be

available free. BMW customers currently have the option of subscribing

to the title for pounds 14 a year.



The clubcard magazine



Published by Forward Publishing for Tesco



Tesco’s Clubcard Magazine was launched in May and goes out four times a

year to the four million or so Tesco customers who are members of the

Clubcard loyalty scheme.



‘It’s not just one magazine - it is, in fact, five,’ Clubcard’s

communications manager, Liz Sinclair, says. The title was developed

after detailed research to target five distinct groups with tailored

editorial: students, young adults without children, families, older

adults and the over-60s.



As it is distributed with Clubcard members’ quarterly statements, the

magazine is not thrown away as junk mail but perceived to be something

of added value, Sinclair claims.



Forward has worked with Tesco on its monthly recipe cards for some time.

Despite approaches from a number of other publishers, the retailer

appointed the publisher to Clubcard Magazine without a pitch because of

its track record and understanding of the Tesco brand.



Segmentation by lifestyle was decided at an early stage, Sinclair says,

while editorial content was agreed after analysis of the customer

database which revealed shoppers’ tastes, habits and preferences.



Advertising within the title was essential to help recoup costs,

although the advertising:editorial ratio was intentionally editorial

biased, 25:75, to ensure feature content was not overwhelmed. The ads

also strengthen the value-added feel of the title, Sinclair maintains.



Classic FM Magazine



Published by John Brown Publishing for Classic FM



The national commercial radio station, Classic FM, launched its magazine

in February 1995 for two reasons: to build the Classic brand and to make

money, according to Robert O’Dowd, head of the company’s enterprises

division.



‘There was never any question it would have a cover price,’ he says. ‘My

brief is to generate extra revenue.’ However, the title was also

intended to convey the values of the Classic brand and offer classical

music lovers an extra benefit - comprehensive listings unavailable

elsewhere.



O’Dowd talked to ten contract publishers before drawing up a shortlist

of three. ‘As we started with a blank piece of paper, we had quite a

clear vision - a quality magazine which shared our values and appealed

to the same audience. We wanted a sophisticated and elegant environment

but one that was accessible and would stand out on the newsstand even if

the radio station didn’t exist.’



Whittling down the first wave of prospective publishers was relatively

easy. ‘Those who went too far didn’t get on the shortlist,’ he says. ‘I

was looking for an approach rather than specific detail. None could

genuinely offer detail without developing a closer relationship with

us.’



John Brown Publishing was the right size and had the right approach: ‘We

felt it would deliver the magazine we wanted, not the one it wanted to

produce.’ O’Dowd adds that he was also impressed by its decision to

recruit and establish a dedicated editorial team - not always the course

adopted by publishing agencies.



Classic FM Magazine now has a monthly circulation of between 38,000 and

40,000 with around 32,000 sold on newsstands; 8,000 by subscription.

O’Dowd aims to boost the sales of each, especially on the subscriptions

side, and roll out the title in other markets, in line with Classic’s

overseas expansion plans.



This article was first published on campaignlive.co.uk

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