APA says customer publishers set for rising demand

by Daniel Farey-Jones,, Brand Republic 02-Feb-05, 07:00

LONDON – The customer publishing industry is forecasting its turnover will increase from £385m in 2004 to over £530m in 2009, as it attracts new clients and captures additional spend from existing ones.

Research is carried out for the Association of Publishing Agencies, the industry body, every two years. It has just released its 2005 report, based on research carried out in September-November 2004.

With a 24% increase in the number of pitches since 2002, new clients have clearly been attracted to customer magazines. However, the industry's turnover has only grown by £18m over two years, from £367m in 2002.

Magazines for retail clients have a greater share of the market than in 2002, up to 17% from 15% while magazines for financial clients have a smaller share down to 13%.

More customer magazines are playing a role in customer acquisition with 48% of magazines in 2004 compared with 35% in 2002. Their main role continues to be targeting existing customers, with 77% of magazines perceived to do this.

Julia Hutchison, director of the APA, said: "The figures reflect what we've all known for a long time: that customer publishing is increasingly being regarded by marketing directors as a fundamental part of the marketing mix for a growing number of businesses."

She added: "While the report still reveals some scepticism from clients and media planners regarding the value of customer magazines, we are confident that our forthcoming Effectiveness Measurement Programme research will quantify the effectiveness of customer magazines."

The research results were originally scheduled to be released last autumn.

The proportion of titles with a cover price, currently 20%, is expected to grow. In addition, 11% of magazines are purchased in-store. The proportion obtained free in-store is 14%, and 61% are mailed out to readers.

The industry remains split on third-party advertising, with just over half believing customer titles should be undiluted, and the rest happy to accept third-party advertising. Advertising as a proportion of turnover fell from 46% in 2002 to 39%, three-quarters of which is rebated to clients.

The report reveals that customer publishing agencies are not making much money in online. Only 2.5% of the industry's turnover came from online services, which were almost entirely made up of content provision. However, three out of 10 publications are available in electronic format.

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