PUBLISHING AGENCIES: Right time, right place

Anna Griffiths explores how the leading customer titles have become serious third-party advertising vehicles for media agency planners and buyers.

It's hard to ignore customer magazines. They either land on your doormat with a thud, are at a multitude of points of sale at retailers across the UK, or are proving their sheer weight of presence by dominating the latest ABC figures.

Circulation is not everything, of course, although customer magazines are aided in this respect by being sent to a tightly-focused segment of people. But, like the paid-for magazine market, the variety on offer is huge and relatively few titles have ABC or NRS accreditation.

This is a problem facing media agencies who are familiar with only a few customer magazines. According to Mintel, just £55 million is generated from third-party advertising, so this still occupies a relatively small spot on media schedules.

Mike Lamond, a director of the Communications Team, comments: "It's often the case that clients who don't think they have the budget to do as big a magazine as they'd want to suggest we get third-party advertising in. But you have to make sure with customer magazines that you are achieving the original goals and are not diluting with too much advertising."

Patrick Fuller, the managing director of Haymarket Customer Publishing, puts it even more robustly: "Clients should go into the customer magazine market because it has been proved that it works and not because it provides them with an additional revenue stream."

Steve Martucci, the planning director at Redwood, points out that well-placed advertising is a great opportunity. "We try to encourage all clients to take advertising, because even on small accounts they appeal to a specific audience."

Yet there is an ambivalence to advertising in customer magazines among media agencies. While most acknowledge that it provides an opportunity to get across targeted advertising messages, some still see it as a second-rate option.

Paul Thomas, the press director at MindShare, believes there is less cachet. "To a certain extent this is true in terms of forming an incentive to the consumer because with customer magazines there has not been that intention to purchase that you obviously get with the paid-for titles."

Steve Goodman, MediaCom's head of press, says: "There's a perception in the industry that they are not read as well. You often hear comments that these magazines 'just get thrown into the bin'. You have to be careful of the broad range of quality. Some of the titles are excellent and some are not so good, and they all get lumped together as customer magazines."

Of course, while customer magazines can provide an advertiser with a perfect target audience for their product, there are restrictions. Martucci explains: "Some clients will not want any advertising in their magazines because they don't think it's appropriate. Others, meanwhile, have strict guidelines on what you can and can't take in advertising terms."

For those titles that are included in the latest Quality of Reading Survey (QRS), the story for using customer magazines as an advertising vehicle would appear quite compelling. The overall credibility of a customer magazine seems to be greater than paid-for titles, according to QRS, with 40.6 per cent of respondents agreeing strongly that they believe what they read in such titles, compared with just 39 per cent for paid-for titles.

In terms of action taken from reading a customer magazine, the story of retail titles aimed at women is compelling, with 67 per cent of respondents saying they had taken some kind of action from reading a customer title, compared with just 55 per cent for paid-for magazines.

The pass-on rate for customer magazines is generally not as strong as it is for paid-for titles. On average, one or two people will read a customer title, compared with three or more for paid-for titles. The title that stands out in terms of a high pass-on rate (5.7 people per copy according to the latest NRS figures) is Sainsbury's The Magazine, but this is sold on the newsstand, which would explain why the pass-on rate is so much greater.

The lower pass-on rate does not seem to bother media buyers. Goodman says: "With titles that have a high pass-on rate, you find the readership quality usually diminishes as it gets passed around. A low pass-on rate can work in the advertisers' favour because they are being read only by named individuals and the audience is not getting diluted, so you know what you are paying for."

Goodman says he finds customer magazines useful for regional advertising campaigns, inserts and direct response advertising. Adam Crow, the press director at Universal McCann, observes: "I'd include customer magazines on my media schedule quite simply for their ability to deliver the three key moments of truth essential to all advertisers - right people, right time, right place."

Media agencies do not necessarily perceive the sector as offering a cheap and cheerful option. Crow says: "Direct marketing advertisers need to pay rock- bottom rates to achieve a cost-effective response and brand advertisers take up the slack rate-wise."

If a magazine is aimed at a targeted, high-net-worth individual, then luxury- goods advertisers would expect to pay a premium for their advertising.

With customer magazine publishers now claiming the same editorial and production values as standalone newsstand titles, some publishing and media agencies feel that those titles with advertising have more credibility than those that are a pure PR vehicle for one company.

Martucci says: "Magazines with advertising will be seen as proper magazines. People expect advertising in magazines, as long as the advertising is resonant with the brand and editorial proposition."

Thomas agrees, but Crow thinks otherwise. "I don't think readers value the magazines more if they see advertising. They probably perceive customer magazines as added value, informative and an aide-memoir to their purchasing cycle."

A universal view held by media agencies and customer magazine publishers is that the latter need to do more to get their product included on media schedules. Goodman says: "The industry would win over more people if it could raise the profile of customer magazines and show how they can be used by us more effectively."

However, Bruce Settle, the advertising sales director of the Communications Team, admits: "We're not good at marketing ourselves and we should make more of an effort to market customer titles better."

TOP TEN CUSTOMER MAGAZINES BY CIRCULATION

MAGAZINE/PUBLISHER      ADVERTISERS INCLUDE        ABC       ABC  yr-on-
                                             (in mlns) (in mlns)    yr %
                                                 2002)      2001     chg
Sky Customer Magazine   Carphone Warehouse,       5.35      4.75      13
(John Brown Citrus)*    Royal Bank of Scotland,
                        RAC, Discovery Channel

AA Magazine             The National Trust,       5.04      4.40      15
(John Brown Citrus)     Vauxhall, Autoglass,
                        Open University

O Magazine - Group      Motorola, Siemens,        2.50      1.63      54
(John Brown Citrus)     Bose, Black Horse
                        Finance

Boots Health &          Estee Lauder,             2.20      2.45     -10
Beauty (Redwood)        Christian Dior,
                        Clinique, John Frieda

Safeway Magazine        Birds Eye Wall's,         1.76      1.70       4
(Redwood)               Wella, Pepto-Bismol,
                        Benecol

Asda Magazine           Hartley's Jam,            1.52      1.52       0
(Publicis Blueprint)    Hellman's, RAC,
                        Kleenex

O Magazine - Pay        Bose, Lloyds TSB          1.50      1.63      -8
monthly edition         Samsung, Co-op Bank
(John Brown Citrus)

Somerfield Magazine     Heinz, Kodak,             1.36      1.35       1
(AMD Brass Tacks)       Slendertone, Persil

Saga Magazine           L'Oreal, Bose,            1.20       1.1      10
(Saga Group)            Clarks, Quorn

Spirit of Superdrug     Procter & Gamble,         1.00      0.95       5
(River Publishing)      L'Oreal, Revlon

*Won by John Brown Citrus Publishing in June, and previously published
by Redwood.
Source: ABC.

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