The meaning behind the words

It has been a good year for contract publishing, with the Association of Publishing Agencies (APA) at last producing a study showing that people who read customer magazines spend more.

The APA report, published early this year, shows that customer magazines are responsible for generating a sales increase of an average of eight per cent for owners, across their readership. These titles also increase brand loyalty by a third, adds the research.

This report also reveals that readers typically spend 25 minutes reading customer magazines, suggesting that they are valued by recipients. This of course not only works to enhance brand loyalty, with 32 per cent of customers stating they feel more committed to the brand after reading a customer magazine, but also encourages customer response. In addition, 44 per cent of customer magazine readers take some form of “positive action” as a result of the magazine.

Obviously, this means that customer titles not only fit into the marketing mix but are also able to affect and sometimes change behaviour. And the floodgates may be about to open for a sector that has for too long been relegated to third division.

A question of loyalty

APA director Julia Hutchison says: “Marketers are beginning to realise that consumer loyalty is not all about sophisticated technology, the ubiquitous loyalty card and fancy analysis, but it is also about taking a pragmatic approach – the necessity of communicating with customers in the most relevant and pertinent way possible. Customer magazines are therefore becoming an increasingly popular way to encourage loyalty.”

But making an impact in this increasingly challenging and cluttered market, in an era when consumers are highly attuned to marketing tricks, can prove to be extremely frustrating. Little surprise, then, that some advertisers show a lack of enthusiasm for customer titles. This is exemplified by the fact that global packaged goods giant Procter & Gamble decided to axe its contract title Mustard – after dabbling in the sector for less than a year – and to invest in a website instead. Last year, Morrisons discontinued the Safeway magazine, produced by Redwood Publishing, closing one of the country’s highest-circulation customer titles. Also last year, McDonald’s closed down its children’s magazine, Ronald McDonald, after only six issues. Experts say that while no one disputes the value of this tried- and-tested marketing method, in the above cases the advertisers struggled to identify a positive impact on the target market beyond the short term.

Getting noticed

So does this mean publishers still face a tough task convincing marketers that customer titles do have a strategic value and should be integrated into marketing plans?

Former Just Publishing managing director Grahame Lake, who recently joined PSP Communications as a director, says the problem is that only a minority of marketers appreciate the breadth and power of customer titles: in most cases, it is still seen as a single-role medium – useful either for boosting sales or to serve as a communication tool. “The validity of this medium has been further proven by this APA research, which should serve the industry well. But at the same time, marketers need to understand that simply producing a magazine does not mean increased customer loyalty. If a brand does not resonate with the consumer, a magazine certainly cannot help.”

John Brown Citrus Publishing (JBCP) managing director Dean Fitzpatrick also thinks that many marketers still need convincing of the strategic value of magazines. “Customer publishing agencies have built up a number of compelling case studies showing the return on investment magazines can achieve, and this is backed up by the APA research, which clearly shows that customers like to receive magazines and that they act upon them.”

JBCP publishes customer titles for a range of clients, including Mothercare, Swarovski and Sky. Fitzpatrick says that although some magazines work better than others, just like any direct marketing, customer publishing is as effective as the marketers in charge of it. No sector is inherently immune to the medium.

Experimental growth

Mintel, which is predicting growth of 47 per cent in the customer magazines market by 2007, says that brands’ desire to find different and more appealing ways to communicate to their customers is encouraging them to experiment with customer publishing. It also says the value of the market is expected to break the £400m barrier by 2006.

Churchill marketing director Peter Corfield says that because it is now possible to measure the effectiveness of magazines on future revenue from customers, contract publishing has the potential to be integrated into companies’ overall marketing strategies. He adds: “As an insurance company, the products and services we sell are difficult to communicate, so strengthening the brand through written communication becomes all the more important. Our magazine helps to reinforce Churchill’s values with existing customers, encouraging them to interact more with our brand. We have already seen some good results from this medium and are confident that it will continue to have a positive effect on sales, loyalty and customer retention.”

These views are supported by Thames Water sales and marketing director John Evans, who explains that the company’s customer title Waves is primarily used to sell products and services such as white goods and plumbing insurance. “The title is used as a consumer communication tool and works very well for us, especially at a time when water prices are going up. The magazine gives a chance to explain the reasons, which we can’t through traditional television and press advertising.”

Another incentive to enter this market is its low cost, especially when compared with other media. Evans says costs for TV advertising in London are prohibitive, so the production of a magazine is the cheapest way of communicating with customers. Gala Casinos sales and marketing director Richard Sowerby agrees. “The fact that it is one of the cheaper ways of targeting consumers is an advantage customer publishing has over other media.”

Sowerby goes on to say that low costs are not the only reason for producing a contract title: customer magazines also help to build long-lasting relationships with consumers. Gala has two titles, one for casino customers and another for its bingo customers. The magazines form an integral part of its customer relationship management strategy.

However, there has been much debate about how customer magazines can become more than a communications tool, particularly in terms of brand building. The industry has long argued that the medium engages with consumers in a way that other media might struggle to match.

The cheap champion

Hutchison believes that customer magazines have been shown to encourage loyalty, boost retention, communicate brand positioning and enhance brand awareness – all while entertaining the reader – something few other marketing activities can claim to do comprehensively or cost-effectively. “The benefits are evident. The genre allows a company to regularly market its brand or products to a highly receptive audience, in an environment that has credibility and effectiveness.”

One press buyer says: “One effective way of using these titles is to test new products. Customer magazines have huge circulations and that could be used for product testing, for instance using cover-mounts.” She goes on to add that titles can also include coupons and details of special offers, as well as pure advertising, making them much more interactive. But she adds: “The problem that the free titles encounter is that people are extremely sceptical of anything that arrives through the letterbox. The way to go forward is to make it appear more like an independent magazine, rather than just a sales pitch for a single brand.” She suggests that technology companies are likely to make increasing use of customer magazines in the near term.

According to MediaCom press director Steve Goodman, the customer magazines market will continue to get bigger not only because newer industries such as the technology sector will start exploiting customer magazines as a marketing tool, but also because of the threat to independent retailers posed by the supermarkets . “Supermarkets concentrate on big-circulation consumer titles, edging out niche titles. Those magazines will have to find ways to become customer magazines and this will mean more business.”

Any other medium that offered the dream combination of low-cost, high-interactivity targeting and 25 minutes’ worth of undivided consumer attention would have marketers foaming at the mouth. Perhaps because it’s not glamorous or hi-tech, this hasn’t yet happened to customer magazines. But the sector’s time may well be coming.v