LIVE ISSUE/CONTRACT PUBLISHING: How Heinz blurred the marketing/publishing line - Anna Griffiths reveals how direct marketing is moving nearer contract publishing

Heinz’s decision last week to move its customer magazine out of its direct marketing agency, WWAV Rapp Collins, and into the contract publisher, Redwood Publishing, raises questions about the creative credibility of direct marketing agencies and illustrates the increasingly blurred line that now exists between direct marketing and contract publishing.

Heinz’s decision last week to move its customer magazine out of its

direct marketing agency, WWAV Rapp Collins, and into the contract

publisher, Redwood Publishing, raises questions about the creative

credibility of direct marketing agencies and illustrates the

increasingly blurred line that now exists between direct marketing and

contract publishing.



Losing Heinz at Home (Campaign, last week) must be a bitter

disappointment for WWAV. The agency devised the concept in the first

place when, in 1994, Heinz decided it wanted to question its

above-the-line spend and concentrate on marketing directly to its

customer base.



Contract publishers see Heinz’s decision as an acknowledgment that

customer titles are quality products. Duncan Grant, managing director of

Beyond Communications, says: ’Direct marketers are trying to bolt on an

editorial and creative publishing service but don’t have the facilities

to do it.



Clients have come to realise that editorial values mean something.’ This

feeling was bolstered last week when Royal Mail announced it was moving

its business customer titles out of its marketing agency, Brann, and

into the contract publisher, Brass Tacks.



Heinz is tight-lipped about the reasons behind the move, saying only

that it wants to develop the magazine. Jane St Clair-Miller, general

manager of corporate marketing for Heinz European Grocery, says: ’WWAV

has done an exceptional job in developing Heinz at Home and the database

over the past three years. Now we’re looking to take the editorial

product and the segmentation of the database to a new plane.’



Under Redwood’s direction, the magazine will increase from 16 pages to

36 with a 4 million print run, better paper and greater customer

segmentation.



Mike Potter, Redwood’s managing director, says: ’We are going to change

Heinz at Home. It will be a relevant, consumer-friendly magazine with a

more relaxed style, but it will still promote Heinz products and

illustrate how they can be used in everyday life. We will also take

advertising for the first time.’



The quarterly title is no mean investment and is worth pounds 6 million

to Redwood, giving it the lion’s share of Heinz’s below-the-line spend.

The title is sent to customers responding to promotions and is intended

to build brand awareness while cross-selling its products. By gaining

detailed customer data, Heinz has built up a database that allows it to

personalise the title for target groups.



While WWAV will continue to advise on the strategic direction of Heinz’s

direct marketing programmes and database development, Andrew Hirsch,

managing director of John Brown Publishing customer magazines, warns:

’Redwood is owned by Abbott Mead Vickers BDDO. Will WWAV now come under

attack from other parts of the AMV group?’



To some advertisers, dealing with a disparate group of below-the-line

agencies, along with creative and media agencies, makes the prospect of

a one-stop shop for below-the-line activity attractive.



Direct marketing agencies are aware of this and, as customer loyalty

magazines become more targeted, are recognising the value of the

medium.



Simon Hall, chief executive of the AMV-owned Barraclough Hall Woolston

Gray, agrees that contract publishing and direct marketing are edging

towards being merged into one discipline. ’The ideal marriage would

merge the contract publishing school of Redwood with the strategic data

skills of WWAV. In the next four to five years people will work together

more closely.’



Contract publishers see themselves as providing a service beyond the

pages of a magazine. Neil Mendoza, chief executive of Forward

Publishing, claims: ’We see the work we do as indistinguishable from

direct marketing.



Customer magazines used to be junky things sold to clients on the basis

of advertising. That’s over, and now it’s about a marketing strategy to

create a bond with the consumer.’



Does this mean direct marketing agencies will find themselves up against

contract publishers in pitches? Hirsch claims: ’On almost all pitches we

are up against direct marketing agencies and not publishing companies.’

He adds that contract publishing is regarded by advertisers as part of

the below-the-line budget and this could reduce direct mail budgets.

With direct marketing, however, advertisers expect to see an instant

result and contract publishing inherently works on building up long-term

brand awareness and customer loyalty.



Contract publishing is a booming industry worth pounds 100 million. It

is growing at about 12 per cent a year and the market is far from

mature. UK advertisers such as Ford have been so impressed by what they

have achieved that they are keen to expand circulation beyond the UK and

into Europe.



Fmcg advertisers, however, seem less struck on the medium, with only a

handful producing magazines. Why? One contract publisher suggests: ’How

many fmcg clients are prepared to make a long-term investment? Not a

lot, because everyone moves around. Fmcg marketing directors stay in a

company for a two-year stint.



Ad agencies complain about the lack of long-term relationships.’



But contract publishers believe this will change as advertisers become

increasingly concerned about the fragmentation of above-the-line media

and recognise the value major advertisers such as Heinz gain from the

medium.



TOP FIVE CONTRACT PUBLISHING TITLES 1996

Title                 Publisher                Circulation

Tesco Clubcard        Forward Publishing         5,000,000

Heinz at Home         WWAV Rapp Collins          4,500,000

The AA Magazine       Redwood Publishing         3,981,939

Sky TV Guide          Redwood Publishing         3,256,918

A Taste of Safeway    Redwood Publishing         2,530,000

SOURCE: Redwood Publishing/ABC



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