Earlier this year, Sky announced it was significantly scaling back its customer magazine output.
Next month it is to close Sky Sports and Sky Movies magazines and replace them with an email newsletter. It is also reducing its flagship Sky magazine from 12 issues a year to four.
It could be inferred from this that brands are set to invest less in customer publishing. However, the channel appears surprisingly resilient, thanks to the parallel rise of branded content and digital communications, including apps and social media, as a way for brands to put their messages across. Even print, for its part, is holding its own.
Marketing's customer publishing league tables for 2010 show a marked financial improvement on last year, with only two of the top 10 posting a decline in turnover, compared with eight last year (see page 32). Publicis Blueprint, which topped the league, and FuturePlus posted particularly strong growth in turnover.
Print is still a core medium for agencies and brands. Even online brands such as Google and fashion retailer Asos have recently launched print titles.
'Contrary to popular belief, magazines are not dead and there are plenty of markets where no amount of digital communications will alter the importance of a magazine as the solution to a brand's needs,' says Jackie Garford, publishing director at The River Group.
In addition, print allows consumers to encounter, enjoy and covet things in a way that a controlled digital search rarely does, argues Andrew Taplin, managing director of Haymarket Network (part of Haymarket Media Group, owner of Marketing).
Print is also being used in more strategic ways, in combination with social media content, for instance. This year, clothing retailer Boden launched a publication, A Thousand Little Things, created by Sunday Publishing, which included a mix of professionally produced and user-generated content inspired by matter sourced from Facebook, Twitter and the web, as well as staff.
According to Emma McCappin, brand communications manager at Boden, the title is a reflection of what consumers want from print - a considered, interesting and entertaining read that engages them and gives them a shared sense of identity. 'We try to communicate in a number of ways that reflect our personality, values and customers' expectations,' she says.
Sean King, chief executive at Seven, adds that today's print consumer is highly knowledgeable about what is out there.
'They expect to see a magazine that reflects the brand, which also has the same standards as a newsstand title,' he says. 'Customers know the title is branded, but their focus is on how good the content is. They expect to see a magazine that provides inspiring content that is relevant to them.'
As a result, King contends, brands are introducing innovative editorial-led magazines and 'look books' with the latest offerings, to engage and inspire followers.
Julia Hutchison, chief operating officer of the Association of Publishing Agencies (APA), says that consumers want print to create an experience and connection that other platforms cannot match.
'As most organisations communicate with their audiences via digital channels such as email, e-newsletters and blogs, print offers a tangibility and engagement that no other medium affords,' she adds. 'The APA Advantage Study shows customer magazines keep consumers' attention for 25 minutes - significantly more than the eight seconds spent looking at a poster or the 30 seconds listening to a radio ad.'
Consumers and brands are now empowered to create as well as consume content, and the number of 'voices' has increased dramatically, according to Lisa Barnard, chief executive of Illustrated London News (ILN).
'The risk is that the social web and the democratisation of content means that customer publishers no longer "own" the editorial conversation between their clients and their audiences,' she says.
Another area where customer publishers are set to reap the rewards is in branded content, which has risen in popularity over the past year.
Customer publishing companies, of course, are geared toward providing branded content, but face more competition, which not only includes digital, PR and above-the-line agencies, but brand-owners themselves.
Sara Cremer, editorial director at Redwood, points out that brands are becoming media companies, as they have to talk constantly to their customers through multiple channels. However, they don't always have the skills and experience to engage well across every channel, which is where customer publishers can lend their expertise.
The increasing use of branded content is also making clients more open to innovation than before, so they are more likely to test different types of content across a variety of formats.
Business wins in the past year for ILN, for example, have included a 'magalogue' (an editorialised catalogue) for outdoor equipment brand Berghaus, a brand advocacy book for Rolls-Royce cars, an online magazine for One & Only Hotels, a website and brochure collateral for Royal Mansour hotel in Marrakesh, and an SEO and social brief for Adriatic Luxury Hotels.
Boden's McCappin believes that there is a great opportunity for customer publishing agencies to help brands engage with their customers.
'Customer publishers are in a good place to deliver branded content because they understand the two key ingredients of engagement - entertaining and well-crafted content as well as having a good understanding of a brand's values and objectives,' she adds.
This view is echoed by Dean Fitzpatrick, managing director of John Brown Media Group. He claims that, as clients look to maximise the value of the assets that agencies generate on their behalf, it has become more important to ensure that an increasing proportion of content is multi-faceted.
'Content that used to be created exclusively for print will now have a role in POS, online as a multi-layered digital magazine, or in internal comms briefings,' he says. 'This is reflected in the fact that of our 40-plus clients, more than a quarter now buy more than one product or service from us.'
One of the challenges for customer publishing companies when it comes to producing branded content is the value placed on it by clients within the marketing mix, according to Geri Richards, chief executive of Publicis Blueprint.
'It seems that customer publishing, in its traditional sense, is not perceived to be sexy in the way that above-the-line still is,' she says. 'The opportunity lies in digital and many customer publishers are creating structures to respond to this requirement. We have a huge part to play in branded content, but we also have a long way to go.'
The debate about who should be producing branded content will continue apace. In addition, with the customer publishing market set to grow by an estimated £1.2bn next year, according to the APA, it is no wonder digital and ad agencies are all vying for a piece of the pie.
'As digital channels become increasingly dependent on branded content, customer publishers will continue to be well placed to meet this demand,' says Gail Franks, managing director of Summersault Communications.
'Their established editorial infrastructure and networks of journalists and contributors, provide them with a competitive advantage. That said, there is increasing competition from PR, digital, media and advertising agencies who all want to own the branded content space.'
Customer publishing agencies will therefore need to explain why they are better suited than other agencies or the brands themselves to tell these stories.
'The journalistic roots of customer publishing agencies mean we know how to tell stories that will engage audiences and we understand about nuance and tone of voice,' says Haymarket Network's Taplin.
To foster loyalty and build advocacy however, brands will also need to provide content that entertains and provides real value whether it is via magazines, e-zines, podcasts, apps or video.
CLIENT DEBATE - Are customer publishers delivering branded content?
'We are putting an increasing emphasis on branded content in order to engage with our customers and reach new ones. An agency that does not have a deep experience of delivering branded content across different channels will be limited in being able to respond to the changing priorities of brands.'
Sandra Grasso Head of marketing communication and CRM, Maserati
'There have never been more ways to talk to our customers and it's never been harder to reach them, so everything we create has to be relevant, useful and entertaining. The quality of all our content needs to be high and consistent across all platforms to ensure a great customer experience.'
Sarah Ellis Senior marketing communications manager, Barclays Retail
'As marketing budgets begin to increase again there could be a resurgence of customer magazines. Although to be a success, they will have to move away from being thinly veiled advertorials to something more engaging with content that appeals to readers.'
Paul Masters Marketing director, Kinleigh Folkard & Hayward
CUSTOMER PUBLISHING - The financial view
If ever there were a period when one might have expected customer publishing to take a turn for the worse, the past two years of recession would have been it. However, if the figures shown in Marketing's league table are anything to go by, most of the companies involved have at least managed to maintain their turnover.
Admittedly there have been no dramatic upsurges in revenue (leaving aside the impression given by the FuturePlus restructuring), which is hardly surprising when income is often derived from a mixture of fixed-fee and slice of advertising revenues. Nonetheless, at least most publishers can rely on the pre-negotiated fee for a sizeable chunk of income.
Thus the financial risks associated with customer publishing may have been lower than in trade publishing, but, conversely, the upside potential has also been more limited.
What the steady revenues do suggest is that clients attach a lot of importance to maintaining this type of publication as a vital part of their own customer relationship strategy.
When economic circumstances are tough, this category of expenditure is more likely to be maintained than axed. Of course, that is not to say that clients won't have been fighting to keep the cost down, especially when advertising revenues will have been harder to generate.