Staff were told last week that the customer publisher is to shift its business model away from advertising-funded to fee-based, after senior Publicis management became aware, when they saw the accounts for 2007, that some business was incurring an operating loss to the company, believed to total £6m.
As a result, the monthly Blockbuster Preview magazine, which Publicis took over only in August last year and which has a 500,000 distribution, will cease publication with the February issue.
However, this is not the only magazine whose viability is being examined. Blueprint is trying to persuade a number of hotel chains, for which it publishes De Vere Deluxe, Mal Life and Du Vin Magazine, to agree to pay a production fee.
It is also understood that Homebase Ideas and Debenhams Desire also rely heavily on third-party advertising, and that they may be next in line for a renegotiation of business terms.
The agency has entered into a redundancy consultation period with staff. The total extent of job losses is unknown at this stage. Meanwhile, Frost is on leave, and said to be considering his future with the company.
In the meantime, joint managing directors Geri Richards and Alastair Young are running the company.
Publicis Worldwide chief operating officer Richard Pinder said that the ad-funded model for customer magazines was too risky and unfair to other customers.
He added: “I didn’t know about it until we saw the year-end books. We’re looking at the ones that are 100% ad-funded first, but there are more that are in that space. Some of our clients are huge corporations and we expect most will see the fair point of view.”
Publicis Blueprint is not the only company to be exposed in this way, according to industry insiders. One said: “A third of customer magazines are ad-funded and 99% of them are not washing their faces.”
Pinder agreed that the industry should “stand up for itself” and demonstrate the extent of the value that customer mags provide to clients and be paid accordingly.
He added that Frost was taking a couple of weeks out to “think about this and decide what he wants to do”.
As a result, the monthly Blockbuster Preview magazine, which Publicis took over only in August last year and which has a 500,000 distribution, will cease publication with the February issue.
However, this is not the only magazine whose viability is being examined. Blueprint is trying to persuade a number of hotel chains, for which it publishes De Vere Deluxe, Mal Life and Du Vin Magazine, to agree to pay a production fee.
It is also understood that Homebase Ideas and Debenhams Desire also rely heavily on third-party advertising, and that they may be next in line for a renegotiation of business terms.
The agency has entered into a redundancy consultation period with staff. The total extent of job losses is unknown at this stage. Meanwhile, Frost is on leave, and said to be considering his future with the company.
In the meantime, joint managing directors Geri Richards and Alastair Young are running the company.
Publicis Worldwide chief operating officer Richard Pinder said that the ad-funded model for customer magazines was too risky and unfair to other customers.
He added: “I didn’t know about it until we saw the year-end books. We’re looking at the ones that are 100% ad-funded first, but there are more that are in that space. Some of our clients are huge corporations and we expect most will see the fair point of view.”
Publicis Blueprint is not the only company to be exposed in this way, according to industry insiders. One said: “A third of customer magazines are ad-funded and 99% of them are not washing their faces.”
Pinder agreed that the industry should “stand up for itself” and demonstrate the extent of the value that customer mags provide to clients and be paid accordingly.
He added that Frost was taking a couple of weeks out to “think about this and decide what he wants to do”.
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