Marketers currently spend almost £680m on customer magazines, according to the latest report from Mintel, including major launches over the past year from PC World, John Lewis, Royal Mail and Prudential.
Retail and financial services remain the two biggest client sectors, accounting for nearly 30% of the market, while automotive is the fastest-growing, with a 9% share. Charities have also significantly increased their activity, with their market share rising from 5% in 2004 to 8% in 2005.
The research, commissioned by the Association of Publishing Agencies (APA), revealed that brands are focusing less on third- party advertising to fund customer publications and more on their use as a marketing tool. In 2005, £104m of the industry's revenue came from advertising, representing a 7 % decline on the 2004 figure of £128m.
Sandra Adar, interim head of marketing at Waterstone's said its title, Waterstone's Books Quarterly, enabled the retailer to target heavy consumers of literature. 'It is an important part of the marketing mix. If you see it as a way to make money you have become a publisher instead of a retailer.'
APA chief operating officer Julia Hutchison predicted that customer magazines would also expand into other media formats. 'Who knows, we might one day see Waitrose Food Illustrated: the TV programme,' she said.
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