The contract magazines sector has begun to shake off its outdated image.
Meg Carter reports on a maturing industry and reveals how clients pick
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
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customer magazines meant little more than an out-of-date, coffee-stained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
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
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
‘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
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
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
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
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
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.
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
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
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.
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
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.
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
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
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
‘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
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
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.