Strong Future Forecast For Customer Magazines
The customer publishing industry continues to perform well, with turnover during 2004 topping £385 million, signalling an increase of almost 10% since 2003 and a massive 244% rise in the last decade, according to the latest report from market research company Mintel.
The reported 10% growth has been attributed to increased spending by companies already utilising customer publishing, and an influx of new businesses trying the medium out for the first time. The 24% increase in the number of marketing pitches over the last two years has also aided growth within the industry.
This upwards trend is predicted to continue, with nine out of ten customer publishers expecting revenue growth to come from new clients on printed publications, as well as 64% higher spend by existing clients.
The report reveals that 20% of customer magazines now have a cover price, with the movement predicted to grow as customer magazines compete with newsstand publications. The current average cover charge is £3.16, although the average price for retail magazines is significantly lower at £1.86. In comparison, cover prices of consumer magazines have seen an increase of over 50%, during the 1990s(see Big Consumer Mags Launches Expected In Next Decade), with this decade seeing more big consumer magazine launches than ever before, according to Tim Ewington, director of specialist media strategy consultancy, Human Capital.
Third party advertising still remains a heavily debated topic within the customer magazine industry, with just over half of publishers believing that titles should remain 100% undiluted. The other half are happy to accept third party advertising as it helps offset production costs and generates revenue. Currently, the average amount of advertising revenue generated annually per magazine is over half a million pounds.
The retail and distribution sector; spearheaded by major retail grocery multiplies plus variety store chains, has experienced the most growth since the last Mintel Report in 2003 (see Contract Publishing Industry Continues To Boom), increasing from 15% share to 17% share. This is now the largest sector accounting for almost a fifth of the total publications surveyed.
The media sector, covering a wide range of TV and press-related titles, has also seen a significant increase in market share, up by three points from 3% to 6%, and the financial services industry remains an advocate of customer magazines with the second largest market share of titles, 13%.
Online services offered by customer publishers, although not producing a major source of revenue, just 2.5% of total turnover, are predicted to increase in value, indicating that whilst print is still the core business, content on the web is becoming more prevalent.
Commenting on the Mintel report, Julia Hutchison, director of the APA said: “The figures reflect what we’ve all known for a long time: that customer publishing is increasingly being regarded by marketing directors as a fundamental part of the marketing mix for a growing number of businesses. In comparison to other media this industry is showing healthy year on year growth, a trend we expect to continue seeing.”
The IPA is confident that its forthcoming Effectiveness Measurement Programme research, launched in March, will quantify the effectiveness of customer magazines, helping to quash some remaining scepticism from clients and media planners regarding the value of the medium.