PUBLISHING AGENCIES: THE CONTINUING RISE OF THE CONTRACT PUBLISHING INDUSTRY - Contract publishing evolved during the 80s, encouraged by successes such as the M&S magazine. This growing sector is now gearing up to hit the big time. Stephen Armstrong

It seems every couple of years a medium tries to force itself into the advertising spotlight. It all started with commercial radio, of course, which took advantage of its 21st birthday to begin a slow and successful campaign to claw more than its tiny 2 per cent share of ad budgets away from other media. The latest small fish trying to leap into a big pond is contract publishing and it’s taking its cue from its tenth birthday - give or take a year or two.

It seems every couple of years a medium tries to force itself into

the advertising spotlight. It all started with commercial radio, of

course, which took advantage of its 21st birthday to begin a slow and

successful campaign to claw more than its tiny 2 per cent share of ad

budgets away from other media. The latest small fish trying to leap into

a big pond is contract publishing and it’s taking its cue from its tenth

birthday - give or take a year or two.

The tenth birthday claim is based on the birth of contract publishing as

a function of technology. With the introduction of affordable desktop

publishing in the mid-80s, it became possible for small operators to

produce newsletters or magazines for themselves but also, and more

lucratively, for paying clients. Although one or two companies such as

British Airways had titles like High Life, produced by Premier, way

before the mid-80s, it was really with the birth of the M&S Magazine in

1987 that the customer magazine as a sales tool took off.

In the UK, the model was, and remains very much, something of a cottage

industry. In the US, conversely, it was the large publishing groups that

took up the challenge. The industry is younger than the UK’s and Time

Warner, the New York Times and Hachette run the most successful


In part, this is about data. British companies had pretty impressive

consumer databases, so could provide contract publishers with the

relevant names and addresses. In the US, only media companies with

subscription-related magazines have the kind of data needed to run a

customer magazine business.

Over the decade, contract publishing in the UK has grown to a pounds 1/4

billion industry, according to a Mintel report published four months

ago. Ten years ago, it was almost vanity publishing - publishers had to

track down the one individual at a prospective client who had the

ambition to launch a magazine. Now it can be found in many marketing

plans - of the top 50 UK companies, 28 have customer magazines.

But within this cheerful view of a growing industry poised to leap into

the big time, there is some dissension. Neil Mendoza, the chief

executive of Forward Publishing, does not believe the market offers

sufficient money for contract publishing even to be called an industry.

He despairs of the quality of some titles and is particularly annoyed by

the smaller outfits producing low-quality work for small-scale


’We make it a point of principle not to work for any company smaller

than pounds 1 billion in market value,’ he says. ’We believe it is only

companies of that size that can afford to pay for good quality work.

What the last few years have shown me is that other people will move

into this sector.

I fully expect the large publishing companies and the ad agency groups

to start running things. In fact, in the future, I think contract

publishing will simply be part of the advertising mix.’

Mendoza is prepared to put his money where his mouth is. Forward

recently tied up a deal with Conde Nast to produce fashion and beauty

client magazines.

These include the Patek Philippe title and the Burton group’s Encore,

which has a circulation of some 300,000. According to Mendoza, there is

the possibility of Encore transferring on to TV once the masthead

programming rules have been lifted. He also speaks, with experience, of

ad agency interest. Maurice Saatchi’s Megalomedia group took a 50 per

cent stake in Forward two years ago.

Mike Potter, managing director of Redwood, which is owned by the Abbott

Mead Vickers group, disagrees. ’I think it would be to our advantage if

more advertising agencies were involved,’ he says, ’but I keep hearing

them say that the industry is getting too big for their involvement. The

advantages for both agencies and publishers are clear. When we were

first bought by AMV, there was hardly any synergy between the two of us.

We both handled Volvo and Yellow Pages but that was coincidence. These

days, however, there is more business that we have in common and that’s

as a result of us working together. It’s a pattern I hope to


Potter is evangelical about the business. He thinks Redwood was the

starter’s gun for contract publishing in the UK when it started working

on Expressions for American Express members in 1984. Redwood has begun

producing a book that compares the NRS figures for its titles with those

for consumer magazines and it makes for impressive reading. For

instance, only five magazines reach more than 10 per cent of the UK’s

ABC1 readership and three of those are Redwood magazines.

Top of the list is the M&S Magazine with 14.52 per cent of ABC1s, then

it’s the Radio Times with 14.28 per cent, the AA Magazine with 13.58 per

cent, Reader’s Digest with 13.30 per cent and the Sky TV Guide with

12.65 per cent. The Sky TV Guide is also the UK’s best read magazine.

According to Potter, this is the kind of business that does not deserve

its 2 per cent label.

’Not so long ago people were talking about radio as a 2 per cent

medium,’ he says. ’We’ve reached that stage and we’re finding attitudes

have changed enormously. What we need to do is change them further,

particularly at advertising agencies.’

These days, any vague gathering of like-minded individuals from an

industry is almost instantly compared with the Radio Advertising Bureau,

following the success of that body. In the case of contract publishing,

however, the Association of Publishing Agencies welcomes the mantle. Set

up three years ago to boost the industry, it faces challenges this year

as contract publishing tries to move beyond the 2 per cent tag.

Kim Conchie, the managing director of Brass Tacks and the man who will

take over as chairman of the association in May, says the body will

continue its generic ad campaign (in which the likes of Richard Branson

give testimonials on the use of customer magazines) and plans a new PR

push. To that end, it has recruited Natalie Wilkie as marketing

executive with a PR brief across the industry. Julian Treasure, the

existing chairman, says the association is planning a one-day conference

at Marketing ’97 on relationship marketing with the Incorporated Society

of British Advertisers and the Direct Marketing Association. It will

embark on an extensive survey of marketing directors to see where the

gaps in the market are.

’We also found recently that the UK contract publishing industry is one

of the world leaders,’ Conchie says, ’so we’ve contacted the DTI to

discuss the export potential of the sector. The APA is 17 members strong

and we’ve just added our first overseas member - Pacific Publishing from

Australia - so the international side of things will occupy some of our

time in 1997.’

The one thing the entire industry is agreed on is the need to raise

contract publishing’s profile in media departments and independents.

Most managing directors agree that space buyers still have the 1987 view

of contract publishing - a bit of corporate propaganda and a couple of

press releases stitched together by a tired old hack. The industry plans

to get behind the APA in a bid to shed this image once and for all.

’Part of the push will be about us getting the right circulation

measurement for our titles,’ Conchie says. ’Brass Tacks produces the

Somerfield monthly magazine which recently went on to the National

Readership Survey. We found it was the eighth best read women’s magazine

in the country. We’re also on ABC’s Verified Free Distribution which

gives us a circulation of 1.2 million.

Media buyers can’t afford to ignore that sort of information and


However, not everyone believes NRS is the panacea for an industry’s


Jim Addison, managing director of Specialist Publishers, which produces

Eagle Star’s 225,000-circulation magazine, says some titles have better

and more accurate readership figures than ABC or NRS can provide. ’With

the Eagle Star magazine I have the names and addresses of every single

reader,’ he explains. ’I would imagine that space buyers would find that

level of customer information a lot more useful than a vague readership

number. It depends on the magazine and the publisher, and a number of

titles could indeed benefit from ABC or NRS data.’

What Addison, Potter and Conchie agree upon is where to target growth in

prospective clients - 1997 is all about fmcg brands. Heinz has its own

magazine and Unilever experimented with a title at the end of last year

but, as a whole, the fmcg sector has failed to get involved in the

magazine business. Addison believes the Heinz and Unilever models hold

good as fmcg brands cannot justify spending 40p on a magazine when the

product itself only costs pounds 1, so they will be forced to band


The other area for contract publishers to tackle is new media. The

Internet and new media are today’s desktop publishing, and the industry

is aware it has to wise up. Treasure, also the chairman of the TPD

group, says his company is looking hard into new media. Through the TPD

subsidiary, Fusion Interactive, and its Seattle office, TPD has tied up

Microsoft’s online material with its consumer magazine. Interested

parties can explore how this works at

Although other publishers are dubious about the use of online

publishing, they are all getting very excited about the next couple of

years. ’The contract magazine’s time has come,’ says Barry Bliss,

publishing director at BLA, which publishes Ford’s magazine. ’The 90s is

all about customer loyalty and retention and, as long as that remains

the case, customer titles will have huge potential.’ All the publishers

have to do now is convince ad agencies to put client money where the

publisher’s mouth is.

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