The true state of customer publishing is somewhat hard to gauge this year, owing to reporting restrictions placed on US-owned agencies.
Omnicom and other big US marketing groups claim they are obliged by new corporate governance law the Sarbanes-Oxley Act to bar their subsidiaries from revealing their financial performance. For these agencies, Marketing has used Companies House data provided by Willott Kingston Smith (page 28).
Despite the incomplete data, the indications are that the sector held its own in a difficult environment. Non-US owned agencies reported a total of £150m in net turnover, a 10% improvement on the same companies' performance last year.
With Redwood, Just, Cedar and Forward out of the table due to Sarbanes-Oxley - big players that accounted for more than half last year's total - that figure is not representative of the industry as a whole.
Most observers had doubts that the 8% growth predicted by Mintel in its first bi-annual survey of customer publishing, published in January, was achievable given the tough market.
Nevertheless, it is an encouraging sign, especially in the context of strong individual performances from John Brown Citrus, River, Citroen Wolf and several others. While some have suffered from the advertising downturn, there are indications that demand has been stronger than in other areas of print media.
Sector squeeze
Two smaller agencies have fallen victim to cost-cutting exercises. Scorpio Multimedia was forced to end operations when Telewest and NTL, its two main clients, axed their cable TV guides, and Cube was shut down last year by owner Associated Publishing, which saw it as peripheral to the core business. Since both cuts were caused by untypical circumstances, they are not necessarily seen as a comment on the health of the sector.
Pressure on margins has remained constant, with some large titles swapping agencies in search of savings. That has benefited the smaller agencies, which can take advantage of lower overheads to win quite large contracts from bigger rivals.
But there have also been cases of clients exploiting the squeeze merely to improve terms with their existing supplier. The competitive market has been troublesome in other ways, with as many as 15 agencies at a time being invited to get involved in a tender.
This is not a universal trend, and there is some evidence of companies taking the urgings of the Association of Publishing Agencies (APA) to heart by providing clear objectives to three or four suppliers instead of encouraging a free-for-all.
Nevertheless, several agencies have been burned by time-wasters holding pitches that require expensive research and then fail to offer a contract at all.
Some agencies reported relatively few new business opportunities in the first five months of the year. Yet they say activity has been hectic since June, suggesting that clients were holding off from new spending until the situation regarding the Iraq war had resolved itself.
"Overall there is a feeling that 2003 has been very tough so far," says Lisa Barnard, chairman of the APA and managing director of Illustrated London News Group. "Many clients have wanted to cut back on marketing spend, and customer magazines can be an easy target." But there have also been a surprising number of new magazines announced and others are in the pipeline, she adds.
Leading edge
John Brown and Citrus have consolidated their merger, which took place in April last year and which chief executive Andrew Hirsch says has worked "incredibly well".
The company is on a roll following its win of the giant Sky contract from Redwood, and which Hirsch is convinced has made the company the industry leader, although in the absence of latest figures from Redwood, which topped the table last year, this cannot be confirmed.
Being perceived as the industry's number one is helpful as it makes the agency the first port of call for many prospective clients, says Hirsch.
It has also boosted advertising sales, which have been growing 18% year on year in a difficult market.
The long dry spell in the first five months was broken for John Brown Citrus in June by a deal with Selfridges, with a publication being launched in September. The agency has since been approached by several other companies looking to bring out a publication as fast as possible.
"Companies went into the year convinced there would be some sort of economic slowdown, but now there doesn't seem to be so much sign of that," Hirsch says. "In the US, magazines are selling a lot of advertising, and UK companies are starting to take note." John Brown Citrus scored a notable success in the US recently with contracts for Bloomingdale's and the US Army. In May, the agency acquired Act-Two, the children's publisher, which it has rebranded John Brown Junior, and is working on a magazine for Nickelodeon. It has also had successes with Waitrose and Carlos, its magazine for Virgin Atlantic Upper Class, both of which have won awards.
Redwood, too, has experienced a pick-up. Since June it has been going flat-out with new business pitches. Helping to make up for the loss of the Sky account, some former customers have returned to the fold, including Dulux and Dollond & Aitchison.
Despite the scrutiny on costs, many existing clients are also increasing the size of their contracts. "It is always encouraging when companies see the power of what we do and find other uses for it in their marketing communications," says chief executive Keith Grainger. Grainger has replaced Michael Potter, who is stepping down after 20 years to start a new publishing company.
Redwood is one of several agencies to have benefited from increased public sector spending, having won contracts for a Department of Education magazine for teachers and a Welsh Development Agency title aimed at small businesses.
Grainger also reports a flurry of activity by luxury retail brands. He attributes this to the natural link between magazines and niche catalogues, and the fact that such companies want a level of control they do not get for their considerable adspend in consumer magazines. One new contract is for Mailbox, an upmarket shopping and leisure complex in Birmingham, with a publication delivered door-to-door to 40,000 selected residencies.
For Just Customer Communication, the pattern has been somewhat the reverse, with a hectic first part of the year followed by a lull in the summer.
The agency achieved a number of wins, including the Bluewater retail centre, Toyota and Frizzell Insurance, as well as the Duke of Edinburgh Award Scheme and Miller Homes. It has also increased its work for Microsoft, producing a major new title for the software giant's staff.
Most of this is business coming into the industry for the first time.
Managing director Grahame Lake concedes that, industry-wide, the proportion of new work compared with re-pitching of existing accounts has shifted from about 70:30 a year ago to 40:60, although he sees this as a sign of a maturing industry.
Lengthy lead times
Newcomers to customer publishing tend to be those that were more resistant to its advantages than the early adopters, he points out. Because they take longer to convince, lead times between the pitch and the appearance of the magazine are becoming longer.
Lake also feels the value of customer publishing is still underrated.
"The big challenge is still to get marketers to take our medium seriously," he says. "They should recognise that its flexibility and speed of response give it a special role in their marketing strategy." Specifically, he wonders why FMCG brands such as Unilever have not adopted customer publishing, considering how relevant their offering is to the average household.
Some believe that the UK market has reached its peak for large-scale projects. "It's hard to think of anyone who isn't publishing that should be," says Sarah Wyse, managing director of Forward, referring to businesses with large databases and a good understanding of their customers.
Two major wins in the past year - Ford and the AA - were transferrals from John Brown Citrus by clients seeking a new start. Wyse feels this kind of movement among big agencies will continue, although what they can take on will always be limited to some extent by potential conflicts of interest with existing clients.
Meanwhile, Wyse is looking overseas for new activity, although this is limited by the somewhat patchy understanding of the value of data-driven publications. Ford is pan-European, and a magazine the agency publishes for watchmaker Patek Philippe is published in 126 countries.
Haymarket has attracted attention for its ability to bring in clients from new sectors, with ground-breaking magazines for the Army, Manchester United and Monstermob.
Building on its football club experience, it has now been appointed by UEFA to produce its bi-monthly Champions League magazine. The publication will have a 100,000 circulation in four languages and, unusually for a customer magazine, will also be sold on newsstands and in clubs throughout the continent.
Managing director Patrick Fuller says this has been a busy year, although many companies have delayed making decisions. "If there is a slight upturn in confidence, there will be a lot more business around."
In another development, Publicis Blueprint claims to be the first customer publishing agency to handle advertising sales and marketing for a newsstand consumer title.
The first of these was Jaunt, a women's travel and lifestyle title launched by Sibella Publishing in July, for which it created TV and cinema ads and a viral campaign.
The agency has also just signed a contract to handle the media sales and commercial relaunch of The Big Issue. It will help the magazine maximise its commercial potential, taking over the management of its media sales teams and providing other forms of publishing consultancy.
Publicis' new customer publishing clients include homes and garden retailer Homebase, for whom it launched Ideas magazine, already the UK's biggest home interest title.
The agency has also been appointed Toni&Guy's integrated media partner, for which it is launching a magazine through all its UK salons in October, as well as helping to create and launch in-salon TV through advertiser-funded programming.
This multi-faceted approach links to the agency's decision this year not to become involved in tenders, preferring to help companies formulate their approach at a strategic level. Nine of its ten new clients in the past 12 months have been won outside tenders and pitches.
Centurion continues to specialise in business magazines with a membership focus, and was hit by the advertising slump that cut its predicted earnings by as much as £5m, according to chief executive Brian Grant. But the decline was only about 7%, compared with up to 30% in the national press, so Grant feels the agency has weathered that storm well.
Consumer invasion
The entry into the customer publishing market last year of consumer publishers NatMags and Conde Nast was viewed with trepidation by some agencies, which feared the effect of competition from such powerful players. But the threat has not materialised, and they have established themselves without wholesale poaching from rivals.
On the other hand, such companies enjoy the advantage of tying in with newsstand magazines. This is a strategy NatMags has been keen to make the most of - distributing its Barclays New Home magazine with House Beautiful, for example, as well as mailing it to the bank's customers.
"They are aimed at the same target audience, and we can provide extension of reach," says director of contract publishing Julian Downing.
The appearance of consumer publishers in the market has intensified the debate about what suppliers should be providing for their clients.
One argument is that clients do better with agencies that help devise strategies for acquiring customers, rather than those that simply produce colourful products aimed at generating loyalty.
Downing concedes that a customer magazine should be seen as a marketing vehicle, but the first priority is to ensure it gets read. That is where experienced publishers have the edge.
From another perspective, Andy Leach, commercial director of Mediamark, argues that agencies need to be marketers first and publishers second.
"The magazine is first and foremost a business tool," says Leach. "The client is interested in getting a bottom-line result. It wants an agency that understands its objectives and can develop the mechanics to achieve and measure them."
This could involve sharing customer data so that the agency sells versions of the magazine to different segments and measures the effect in terms of direct response to advertisements and sales of products not advertised elsewhere.
The strength of a strategic approach is perhaps typified by Cabal, a small agency that put itself on the map by winning the IKEA account from John Brown two years ago. It has now been bought by Highbury House Communications, a company with a large customer publishing division, specialising in business and travel publications such as CNN Traveller.
Together they occupy ninth place in this year's table, although preferring for the moment to co-operate from adjacent premises under separate management, rather than undertake a full merger.
Greater involvement
The secret of success is to get involved in every aspect of a company's publishing, according to Mark Lonergan, managing director of Highbury Cabal. That is the approach the agency adopted with IKEA, for which it is now handling online and in-store promotional activity as well. It is also carrying out some direct mail activity for property agent Stratton and Parker.
"We win contracts by being there for clients whenever they need help talking to their customers, through whatever medium," Lonergan says.
Travel has been a successful area for River, which is producing The Sunday Times Travel, a bi-monthly magazine for the newspaper. The newsstand publication is being used by News International to broaden the newspaper brand and is turning out to be a major revenue generator.
The title is aimed at affluent over-35s, but is less highbrow than the previously biggest-selling magazine of its type, Conde Nast Traveller, which it is now outselling by three and a half times. Subscriptions are 40% ahead of expectations, and advertising is exceeding targets by more than 120%.
"A year ago we thought travel was going to be a difficult area for us, but it has turned out to be quite healthy," says head of business development Helen Ketchin.
Smaller agencies have tended to benefit from the economic downturn, as clients find they can often publish their magazines at a lower cost without sacrificing quality.
That has been the case with Illustrated London News Group, which specialises in sectors exposed to the downturn, such as travel, luxury goods and property, and had braced itself for a rocky ride last year. In the event, it managed to increase turnover and win new accounts, including VisitBritain, Eversheds and South West Trains.
"In a recession, clients take a long, hard look at how they are spending money," says the agency's Barnard. "Then they sometimes either jump ship or look at new solutions to get a better or more effective product." Barnard notes a growing emphasis on distribution, with the agency's responsibility continuing after the magazine has been printed and delivered. It now has a dedicated member of staff who works exclusively on developing distribution channels, managing the database and improving logistics.
This links to the growing concern with customer acquisition as much as retention. For instance, with its Orient-Express magazine the Illustrated London News Group has doubled circulation from 35,000 to 75,000 over two years. Content has expanded beyond the brand's properties of trains to include five-star London hotel rooms, cruise ships and airlines, including in-flight British Airways Club Class.
A small agency that has reaped visible benefits from the downturn is Wardour Communications, which has grown by 19% and remained profitable. "Last year a lot of agencies were saying that global companies is the way things are going. We feel that has been disproved," says joint managing director Martin MacConnol.
Being nimble and creative in pricing has helped win contracts off big players, but without sacrificing quality, he says, a point the agency underlines by taking steps to acquire ISO 9000, an accreditation for achieving standardisation of management systems.
Work won by Wardour includes an internal communications contract for the Abbey National, a bi-monthly magazine with a print run of 35,000, from John Brown Citrus.
MacConnol also sees companies taking a more serious interest in the web, with Wardour running online publications for Logica CMG, Norwich Union and insurance company Alexander Forbes.
Technological cost-cutting
Technology is an effective way to slash costs. This is the route chosen by PSP Communications, a new agency that aims to exploit clients' need for savings by avoiding the trimmings and doing as much of the work as possible remotely.
"Customers want their money to go into their magazines and not into maintaining flash offices for their agency," says managing director Peter Moore.
PSP uses freelancers to design and edit publications, as well as write the articles, with all material transferred digitally. Clients are able to access the agency's web site, where they can see the copy and layout in real time. The company publishes two magazines for bmi british midland, for passengers and staff.
The drive to cut costs has had some significant knock-on effects for agencies. There has been an increased tendency for clients to place print and paper through their own procurement departments, for example. In some instances, this has worked well and the client has saved money. In others, clients have fallen foul of their inexperience in the printing market.
"We've found that some clients have been charged up to 15% more as a result of a lack of knowledge," says Mark Flanders, chairman of Communications Team.
With contracts being negotiated by professional purchasers, fees are also being eroded in some cases. But that has an upside, in encouraging companies to contract for longer periods. "When a company has been through an elaborate procurement process to find a partner, they don't want to repeat it after only a year," says Richard Lomax, director of corporate publishing at Redhouse Lane.
Lomax also notes some regionalisation. "Companies like to work with agencies on their doorstep, even though e-links make it unnecessary," he says.
"Some are moving out of London and using local agencies, and adopting a regional approach to sourcing suppliers; our Glasgow office has picked up business this way." Overall, this has been a reasonably encouraging 12 months, in which customer publishing has continued to establish itself as an essential part of the marketing mix, despite the tough conditions.
Although the rate of expansion has slowed, opportunities still exist to bring in new business. The priority will be to ensure that marketers understand the effectiveness of the medium compared with other below-the-line channels, and encourage them to take the plunge.
TOP FIVE FOR GROWTH, LARGER AGENCIES
Rk Agency Net turnover Net turnover % change
2002 (pounds) 2001 (pounds)
1 NatMag Contract Publishing 3,590,000 1,700,000 111.18
2 River Publishing 8,865,000 7,180,000 23.47
3 Citroen Wolf Communications 8,100,000 6,600,000 22.73
4 Conde Nast Publications 8,263,000 6,802,000 21.48
5 John Brown Citrus Publishing 39,941,000 33,288,000 19.99
TOP FIVE FOR GROWTH, SMALLER AGENCIES
Rk Agency Net turnover Net turnover % change
2002 (pounds) 2001 (pounds)
1 Cambridge Publishers 927,000 720,000 28.75
2 The Big Agency 2,050,000 1,650,000 24.24
3 Wardour Communications 2,131,000 1,795,000 18.72
4 Alchemy Worx 356,000 310,000 14.84
5 The Illustrated London News Grp 2,710,000 2,361,000 14.78
TOP CUSTOMER PUBLISHING AGENCIES 1-25
Rk Agency Net turnover Net turnover % chng
2002 (pounds) 2001 (pounds)
1 John Brown Citrus Publishing 39,941,000 33,288,000 19.99
2 Centurion Publishing Group 21,200,000 21,500,000 -1.40
3 Haymarket Customer Publishing 19,000,000 19,700,000 -3.55
4 Publicis Blueprint 12,055,000 11,448,000 5.30
5 New Crane 10,671,000 11,614,000 -8.12
6 River Publishing 8,865,000 7,180,000 23.47
7 Conde Nast Publications 8,263,000 6,802,000 21.48
8 Citroen Wolf Communications 8,100,000 6,600,000 22.73
9 Highbury Cust Pub &
Highbury Cabal 7,597,000 6,701,000 13.37
10 CBC Media 4,450,000 4,433,000 0.38
11 NatMag Contract Publishing 3,590,000 1,700,000 111.18
12 Communications Team 3,124,000 3,111,000 0.42
13 The Illustrated London News Grp 2,710,000 2,361,000 14.78
14 Mediamark Publishing 2,681,000 2,865,000 -6.42
15 Redhouse Lane Communications 2,576,000 2,296,000 12.20
16 Wardour Communications 2,131,000 1,795,000 18.72
17 The Big Agency 2,050,000 1,650,000 24.24
18 Square One Group 1,925,000 1,800,000 6.94
19 Brooklands Group 1,200,000 1,479,000 -18.86
20 Zone 1,013,000 1,473,000 -31.23
21 Cambridge Publishers 927,000 720,000 28.75
22 ICP Creative Communicators 790,000 768,000 2.86
23 Alchemy Worx 356,000 310,000 14.84
24 PSP Communications 333,000 - -
25 WRAP Communications 127,000 192,000 -33.85
Rk Agency Int'l gross Int'l gross % chng
t'over 2002 t'over 2001
(pounds) (pounds)
1 John Brown Citrus Publishing 1,306,000 3,869,000 -66.24
2 Centurion Publishing Group - - -
3 Haymarket Customer Publishing 4,000,000 3,500,000 14.29
4 Publicis Blueprint 163,000 - -
5 New Crane - - -
6 River Publishing - - -
7 Conde Nast Publications - - -
8 Citroen Wolf Communications 200,000 130,000 53.85
9 Highbury Cust Pub &
Highbury Cabal 1,526,000 1,930,000 -20.93
10 CBC Media - - -
11 NatMag Contract Publishing - - -
12 Communications Team 587,000 287,000 104.53
13 The Illustrated London News Grp 428,000 305,000 40.33
14 Mediamark Publishing 176,000 137,000 28.47
15 Redhouse Lane Communications - - -
16 Wardour Communications - - -
17 The Big Agency - - -
18 Square One Group - - -
19 Brooklands Group - - -
20 Zone - - -
21 Cambridge Publishers - - -
22 ICP Creative Communicators - - -
23 Alchemy Worx 60,000 48,000 25.00
24 PSP Communications - - -
25 WRAP Communications - - -
Rk Agency Print/ No of
online employees
(%)
1 John Brown Citrus Publishing 99/1 145
2 Centurion Publishing Group 100/0 109
3 Haymarket Customer Publishing 95/5 88
4 Publicis Blueprint 95/5 70
5 New Crane 100/0 70
6 River Publishing 99/1 58
7 Conde Nast Publications 100/0 40
8 Citroen Wolf Communications 90/10 120
9 Highbury Cust Pub & Highbury Cabal 100/0 100
10 CBC Media 100/0 27
11 NatMag Contract Publishing 100/0 29
12 Communications Team 90/5 35
13 The Illustrated London News Grp 96/4 47
14 Mediamark Publishing 98/2 18
15 Redhouse Lane Communications 80/20 55
16 Wardour Communications 90/10 28
17 The Big Agency 90/10 30
18 Square One Group 95/5 28
19 Brooklands Group 100/0 19
20 Zone 50/50 18
21 Cambridge Publishers 100/0 10
22 ICP Creative Communicators 99/1 14
23 Alchemy Worx 0/100 7
24 PSP Communications 100/0 9
25 WRAP Communications 100/0 5
Rk Agency
1 John Brown Citrus Publishing
Founded 1987 (John Brown), 1972 (Citrus), merged 2002, privately
owned.Chairman John Brown, CEO Andrew Hirsch, MD Dean Fitzpatrick.
94.5 % consumer, 3.3% B2B, 2.3% internal.Clients include BSkyB,
Waitrose, Orange. Member of APA. E-mail andrew.hirsch@jbcp.co.uk;
web site www.jbcp.co.uk
2 Centurion Publishing Group
Founded 1981, privately owned. CEO Brian Grant. 13.5% consumer,
86.5% B2B. Clients include Chartered Institute of Personnel and
Development, Chartered Institute of Purchasing & Supply, The Royal
British Legion. E-mail info@centurion-publishing.co.uk; web site
www.centurionpublishing.co.uk
3 Haymarket Customer Publishing
Founded 1997, div of Haymarket Publishing Group, privately owned.
Chairman Eric Verdon-Roe, MD Patrick Fuller, client serv dir Andrew
Taplin. 85% consumer, 15% B2B. Clients include Manchester United,
British Army, Chrysler. Member of APA. E-mail
simon.kanter@haynet.com; web site www.haycustpub.com
4 Publicis Blueprint
Founded 1999, subsidiary of Publicis UK. MD Jason Frost, CEO John
Wisbey. 87.5% consumer, 12.5% B2B. Clients include Asda, Homebase,
Toni & Guy. Member of APA. E-mail
jason.frost@publicis-blueprint.co.uk; web site
www.publicis-blueprint.co.uk
5 New Crane
Founded 1993, privately owned. Chairman Michael Wynn Jones, MD Fiona
Marcar, new business director Joanne O'Hara.100% consumer. Clients
include Sainsbury's, Sainsbury's Bank, Vitacress. Member of APA.
E-mail edit@newcrane.co.uk; web site www.newcrane.co.uk
6 River Publishing
Founded 1991, privately owned, subsidiary of River Group. Chairman
Michael Williams, joint MDs Nicola Murphy, Jane Wynn. 100% consumer.
Clients include News International, Holland and Barrett, Superdrug.
E-mail info@riverltd.co.uk; web site www.therivergroup.co.uk
7 Conde Nast Publications
Founded 1927, privately owned. President new business Sue Douglas.
100% consumer. Clients include HSBC, Tate, Harrods. Member of APA.
E-mail tmiller@condenast.co.uk; web site www.condenast.co.uk
8 Citroen Wolf Communications
Founded 1997, privately owned. Non-exec chairman Teresa Graham OBE,
MD Dean Citroen, client services director Elizabeth Bolshaw. 65%
consumer, 35% B2B. Clients include PricewaterhouseCoopers,
LivingWell Health Clubs, British Quality Foundation. Member of APA.
E-mail general@cwcomms.com; web site www.cwcomms.com
9 Highbury Cust Pub & Highbury Cabal
Founded 1978, subsidiary of Highbury House Communications. Directors
Mark Lonergan, Rebecca Linn. 94% consumer, 6% B2B. Clients include
IKEA, CNN-Turner Broadcasting, Holmes Place Health Clubs. E-mail
mark.lonergan@cabalcomm.com, beccy.linn@hhc.co.uk; web site
www.hhc.co.uk
10 CBC Media
Founded 1983, privately owned. Chairman and MD Raymond Lewis, client
services director Richard Wellborne. 37.5% consumer, 62.5%
internal.Clients include Motability Charity, Royal Mail, Guards Polo
Club. Member of APA. E-mail info@cbcmedia.co.uk; web site
www.cbcmedia.co.uk
11 NatMag Contract Publishing
Founded 2001, div of NatMags. Director of contract publishing Julian
Downing, editorial and creative dir Carey Sedgwick.100% consumer.
Clients include BAA, Berkeley Homes, David Morris. Member of APA.
E-mail julian.downing@natmags.co.uk; web site
www.natmag-contract.co.uk, www.natmags.co.uk
12 Communications Team
Founded 1988, priv owned. Chairman Mark Flanders, pub dir Mike
Lamond. 40% consumer, 40% B2B, 10% internal, 10% public sector.
Clients incl Chartered Institute of Marketing, Vodafone, Home
Office. Member of APA. E-mail info@communicationsteam.com; web site
www.communicationsteam.com
13 The Illustrated London News Group
Founded 1985, subsidiary of Sea Containers. MD Lisa Barnard, deputy
managing director Andrew Sculthorpe. 89% consumer, 10% B2B, 1%
internal. Clients include Orient Express Hotels, Chelsea Village,
Eversheds. Member of APA. E-mail lisa.barnard@ilng.co.uk; web site
www.ilng.co.uk
14 Mediamark Publishing
Founded 1989, privately owned. MD Robert Newey, commercial director
Andy Leach. 92.5% consumer, 7.5% internal. Clients include Vauxhall,
Airport Express (BAA), Petplan (Allianz Cornhill Insurance). Member
of APA. E-mail andyl@mediamark.co.uk; web site www.mediamark.co.uk
15 Redhouse Lane Communications
Founded 1988, privately owned. Director corporate publishing Richard
Lomax, MD Jeremy Redhouse, client services director Fiona Corey. 5%
consumer, 20% B2B, 75% internal. Clients include Department of
Health, ExxonMobil. E-mail mail@redhouselane.co.uk; web site
www.redhouselane.co.uk
16 Wardour Communications
Founded 1996, privately owned. Joint MDs Martin MacConnol, Nick
Mayhew-Smith. 20% consumer, 30% B2B, 50% internal. Clients include
Co-operative Insurance Society, Logica CMG, Dixons. Member of APA.
E-mail martin@wardour.co.uk; web site www.wardour.co.uk
17 The Big Agency
Founded 1997, privately owned. Chairman Peter Gould, MD Ned Dean,
client services director Joanna Fay. 80% consumer, 20% internal.
Clients include American Express, Rolls-Royce, Labour Party. E-mail
info@big-agency.com; web site www.big-agency.com
18 Square One Group
Founded 1994, privately owned. Commercial director Sean King,
creative director Peter Dean. 80% consumer, 10% B2B, 10% internal.
Clients include Unichem, Gala Group, Motorola. Member of APA. E-mail
info@squareonegroup.co.uk; web site www.squareonegroup.co.uk
19 Brooklands Group
Founded 1992, privately owned. MD Darren Styles, client services
director Matthew Jenns. 95% consumer, 5% internal. Clients include
Renault, Star Clippers, Hyundai. Member of APA. E-mail
mail@brooklandsgroup.com; web site www.brooklandsgroup.com
20 Zone
Founded 1999, privately owned. Chairman Lord Tom Chandos, MD James
Freedman. 75% consumer, 25% B2B. Clients include Channel Four,
English Cricket Board, Energis. Member of APA. E-mail
info@zoneworldwide.com; web site www.zoneworldwide.com
21 Cambridge Publishers
Founded 1996, privately owned. MD Mark Rosselli. 25% consumer, 69%
B2B, 6% internal. Clients include Royal Bank of Scotland,
Breakthrough Breast Cancer, Federation of Small Businesses. Member
of PPA. E-mail info@cpl.biz; web site www.cpl.biz
22 ICP Creative Communicators
Founded 1984,div Insider Publications, subsid Trinity Mirror. Dir
Kate MacInnes, bus dev man Mark Ellison. 25% consumer, 55% B2B, 20%
internal. Clients include Royal Bank of Scotland, ScottishPower,
Scottish Development International. Member of APA. E-mail
enquiries@icpcc.com; web site www.icpcc.com
23 Alchemy Worx
Founded 2000, privately owned. CEO Dela Quist, client services
director Andy Gray. 65% consumer, 35% B2B. Clients include Norwich
Union Direct, Sun Microsystems, Centre Parcs. E-mail
dela@alchemyworx.com; web site www.alchemyworx.com
24 PSP Communications
Founded 2002, privately owned. MD Peter Moore, client services
director Tina Morris. 98% consumer, 2% internal. Clients include bmi
british midland, bmi baby, Great Ormond Street Hospital. Member of
APA. E-mail info@pspcom.com; web site www.pspcom.com
25 WRAP Communications
Founded 1999, privately owned. Non-exec chairman Bernard Johnson, MD
Roger Wilsher, client services dir Ciaran Jennings. 30% consumer,
70% B2B. Clients include Telewest, Workspace, United Co-operative
Travel Division.
Member of APA. E-mail info@wrapcom.com; web site www.wrapcom.com
THE SARBANES-OXLEY EFFECT
Company Year end Gross income Turnover Print/ Employ-
(pounds) (pounds) online ees
(%)
Cedar 31/12/2001 5,585,569 13,076,210 n/a 86
Communications
Forward 31/12/2002 10,739,907 15,001,879 80/20 105
Just Customer 30/04/2000 95,535 2,784,235 80/20 40
Communication
Redwood 31/12/2001 22,762,838 56,184,163 95/5 320
Publishing
Specialist 31/12/2002 1,170,344 1,748,297 90/10 17
Publications
(UK)
Source: Willott Kingston Smith (alphabetical order), with figures from
Companies House
APA COMBATS LACK OF KNOWLEDGE
Customer magazines are gradually becoming perceived as an integral part of the marketing mix, rather than a sideshow. But there is still some way to go, says Association of Publisher Agencies (APA) chairman Lisa Barnard.
"Our industry has grown up in the past year, from consolidation and the greater need to focus caused by market conditions," she says. "However, there is a lack of knowledge about how exactly customer magazines work."
Barnard is frustrated by the failure of some companies to think through the implications of launching a customer magazine, which can lead to a loss of time and money. Some pitches for large-circulation titles in the past year resulted in no magazine, largely because the client had not worked out the costs or properly identified their objectives.
In one case, a government department required shortlisted agencies to commission original research at their own expense, among many other things, and then ditched the project. "Typically, consultants are involved who clearly have not done their homework," Barnard says.
On the plus side, businesses are showing a greater interest, taking advantage of the APA's guidelines, newsletters and the seminars it runs in tandem with Royal Mail. Now the organisation is expanding its role, offering tailored one-to-one advice to potential clients.
According to APA director Hilary Weaver, this involves auditing the business' marketing strategy to see where a customer magazine might fit, and then building a business case.
The APA is also considering offering a selection service, through which a recommendation could be made about the most suitable agency for business.
To act alone in this would compromise its independence, Weaver concedes, although she believes it could follow the practice adopted by other industry bodies such as the Direct Marketing Association and The Marketing Society, which link up with external agencies to provide a selection service. However, this idea is still under discussion, she emphasises.
THE INTERNATIONAL PICTURE
Haymarket emerges as the most internationally active of non-US-owned agencies this year, thanks to the wide readership of its automotive and football magazines.
Publications for Jaguar and Chrysler International are read by owners around the world, while Toyota's One Aim covers the brand's successes in international motor sports.
Champions, the new magazine for UEFA, will be distributed throughout Europe. Haymarket also produces a publication for the US Champions World Series football tournament.
John Brown Citrus faced a setback in its aim to win US business after the events of September 11 and subsequent slowdown. However, the gloom is starting to lift, according to chief executive Andrew Hirsch, and activity there has been strong recently. One significant win is a contract to produce a magazine for the US Army.
The agency has also been buoyed by its deal with New York retailer Bloomingdale's, with a quarterly lifestyle title to be launched in the autumn. B will cover fashion, travel, home design and entertainment, including celebrity profiles and events on the New York social calendar. It will initially be distributed to loyal customers, before being made available at newsstands.
Hirsch notes a rather different culture in US customer publishing, where a magazine's chief aim is to win sales through advertising, and there is less of a preoccupation with stylish design that predominates in the UK.
In some respects, customer publishing in the US is not as advanced as here, argues Redwood's managing director, Keith Grainger. For instance, car manufacturers tend to use magazines to publicise a brand generally, whereas in the UK they focus on a particular marque. However, Redwood is starting to export the UK model, and this is attracting interest, Grainger says.
Despite its forced absence from the international table, Redwood is still one of the most significant players abroad. The agency now has 12 clients and 120 staff in its North American office, and is roughly the same size there as it was in the UK six years ago.
TOP INTERNATIONAL AGENCIES
Rk Agency Net turnover International
2002 (pounds) gross turnover
2002 (pounds)
1 Haymarket Customer Publishing 19,000,000 4,000,000
2 Highbury Customer Publications
& Highbury Cabal 7,597,000 1,526,000
3 John Brown Citrus Publishing 39,941,000 1,306,000
4 Communications Team 3,124,000 587,000
5 The Illustrated London News Group 2,710,000 428,000
6 Citroen Wolf Communications 8,100,000 200,000
7 Mediamark Publishing 2,681,000 176,000
8 Publicis Blueprint 12,055,000 163,000
9 Alchemy Worx 356,000 60,000
INNOVATIONS IN 2003
Customer magazines have usually copied the formats established over many years by consumer publishers. But now agencies are starting to push the boundaries.
Carlos, John Brown Citrus' new magazine for Virgin Atlantic Upper Class, dispenses with the typical in-flight travel magazine formula, for instance, in favour of an old-fashioned literary look. As well as being offered to passengers on flights, it is made available in book stores, art galleries and fashion boutiques.
The A5 publication is printed in monochrome and illustrated with line drawings only. Sophisticated articles and short-stories are interspersed with humorous material, such as spoof ads, doodles and silhouette hand shapes that can be made with the adjustable seat light.
"Some clients are starting to be more adventurous in terms of design," says chief executive Andrew Hirsch.
"We like to work with clients that are very confident of their brand and can be brave with it." Orange is one company that has been willing to take risks, he says, and the new Selfridges magazine will be "like no other department store magazine".
Customer magazines are also taking centre stage in terms of content. Cedar has had considerable success in breaking news stories that are quickly taken up by the media generally, winning valuable extra publicity for the magazine and the brand.
Insurance is not the sexiest subject, and the Chartered Insurance Institute would not normally expect to attract attention in this way.
But that is what happened in July when its Journal ran with a piece headed 'Dying to Succeed', looking at disturbing new trends on death rates among British women.
This story was featured strongly in The Times and was quickly followed by the rest of the media, with the magazine's editor, Martin Baker, being interviewed on evening TV and radio bulletins.
"We are trying to turn up the journalism dial and make it more compelling by breaking stories to the press," says Cedar managing director Jules Rastelli. "That doesn't happen with customer magazines, which usually just recycle old news." All Cedar's editors are now asked to come up with one story in each edition that has PR value.
ONLINE PUBLISHING ATTRACTS GROWING INTEREST
Online publishing has never taken off to the extent that was being predicted five years ago. But there are signs that marketers are starting to take a closer interest in the reach, measurability and cost-effectiveness that interactive solutions provide.
That particularly applies to e-mail marketing, where companies are spending more on the look and content of their newsletters and e-zines, according to Dela Quist, managing director of Alchemy Worx.
They are also merging sales data with e-mail activity, improving targeting and results. Instead of measuring success by the number of click-throughs and messages opened, they now look at what individual customers are doing.
Over a six-month period, more than 40% of subscribers to Norwich Union Direct newsletter 'Direct to You' opened every other issue, and nearly 70% opened one in three. So it was no great surprise to discover that subscribers to the newsletter were more likely to renew their policy by a significant margin.
Another trend is that the decision to mount an e-campaign is being made by marketers, rather than IT directors. "In most cases the IT system can handle the job, so what really counts now is how the campaign can be used to achieve marketing goals," Quist says.
TOP 15 ONLINE PUBLISHING AGENCIES (NON US-OWNED)
Rk Agency Net turnover Online net
2002 (pounds) turnover 2002
(pounds)
1 Haymarket Customer Publishing 19,000,000 950,000
2 Citroen Wolf Communications 8,100,000 810,000
3 Publicis Blueprint 12,055,000 602,750
4 Redhouse Lane Communications 2,576,000 515,200
5 Zone 1,013,000 506,500
6 John Brown Citrus Publishing 39,941,000 399,410
7 Alchemy Worx 356,000 356,000
8 Wardour Communications 2,131,000 213,100
9 The Big Agency 2,050,000 205,000
10 Communications Team 3,124,000 156,200
11 The Illustrated London News Group 2,710,000 108,400
12 Square One Group 1,925,000 96,250
13 River Publishing 8,865,000 88,650
14 Mediamark Publishing 2,681,000 53,620
15 ICP Creative Communicators 790,000 7,900
STAFF MAGAZINES ON THE UP
Several agencies report a growing interest in staff magazines. It is an important development, not least because it can lead to an expansion of existing contracts.
"Companies see value in equipping all of the workforce as ambassadors and salespeople," says Richard Lomax, director of corporate publishing at Redhouse Lane.
"Rightly or wrongly, we all believe what a friend or acquaintance has to say about the company they work for, before anything we read in the press, web site or brochure."
Lomax also notes a demand for tailored communications to ex-staff, who, as a group, are often also big shareholders and sometimes potential customers.
Redhouse Lane publishes about 20 staff magazines across several sectors, including government, utilities and transport. Titles include the Department of Health's Link, BAA's Air Ways and the Pension Service's Horizon.
Just Publishing has extended its work with Microsoft to produce the quarterly U magazine for staff, launched in July with a print run of 2000. Readers are encouraged to give feedback to ensure the content remains appealing, and also submit their own material.
"We have believed for some time that you should talk to your staff as you do your customers," says Grahame Lake, managing director of Just.
"Microsoft is clearly thinking along the same lines, seeing value not just in the software it sells, but the service delivered by its staff."
Wardour, too, has benefited in this area, picking up a bi-monthly staff title for Abbey National. Internal magazines are an opportunity for smaller agencies, says joint managing director Martin MacConnol, as they have been relatively under-exploited. Wardour's magazine for the Co-operative Insurance Society has just won Editor of the Year Award, and the agency has also won the contract to produce Dixon's group staff magazine.
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