Turnover increased to £313 million in 2002 from £291 million in 2001, according to Mintel research of 34 contract publishers and 1,500 consumers.
The figures mean that the sector has almost doubled its turnover in the five years since 1997, with a 90 per cent increase.
Growth was driven by the top three sectors, which remained the same since Mintel's last survey. Retail and financial services are responsible for 15 per cent of the market each, and travel makes up 10 per cent.
The main target audience for customer magazines, such as Land Rover's One Life, is existing customers (78 per cent). However, there are more publications aimed at staff (16 per cent) and business partners (15 per cent) since Mintel's last survey in 2000.
The main objective of customer magazines is to inform the customer about products or services and encourage purchase (56 per cent) while 48 per cent of companies said that building customer loyalty is the main objective.
Post is the most popular way to distribute a customer magazine, with 74 per cent received by mail. Some 72 per cent of mailed magazines are personalised.
Hilary Weaver, the director of the Association of Publishing Agencies, said: "Market trends continue to show that direct marketing is an effective way to communicate with customers. The research confirms that the customer magazine is more palatable to consumers than more overt marketing disciplines."
- Publishing agencies, p23.