The market for customer magazines has been developing rapidly since the beginning of the millennium. Consumers' reactions to advertising have become more sophisticated, and the proliferation of media has resulted in an increasing difficulty in reaching mass audiences. Consequently, a growing number of companies are turning to customer publications to help them convey a range of messages to their target markets.

This has had negative as well as positive effects for publishers of customer magazines. Many of the industry's biggest clients are becoming more demanding in their requirements regarding creativity and value for money. Competitive pitches for customer magazine business are now common, with many companies frequently reviewing their policies in this area, and changing both the publications they offer to consumers, and the publishing agencies that produce them.

Key Note's original research revealed some encouraging findings for the contract publishing industry.

For example, nearly two-thirds of respondents said they usually read the customer magazines provided for travellers on aeroplanes, ferries and other forms of transport. Free customer magazines produced by retailers also had a fairly high readership level among respondents, with more than four in ten saying they regularly read them.

One in five people said they regularly read the magazines produced by car manufacturers, but only around one in ten regularly read the customer magazines of telecommunications or finance companies.

Just over a third of all respondents claimed that they did not usually bother to read customer magazines.

Two-thirds agreed that magazines were a good way of encouraging companies to communicate with their customers, and more than half said they themselves used them to find out about new products and services. Nearly six in ten claimed that they usually found at least one or two features to interest them in these magazines.

Almost four in ten were positive about the production and editorial standards of customer magazines, judging them to be just as good as those in other magazines.

Customer magazines can have an effect on behaviour in many cases. Even though only just over a third of Key Note's respondents said the offers and information in these publications were usually relevant to them, more than four in ten said they had bought things they had seen in customer magazines, with a similar proportion having used coupons and/or special offers from them.

Despite the highly competitive market that now exists within the contract-publishing sector, growth is expected to continue strongly over the next 5 years (to 2011): the sector will continue to attract clients, against a background of changing consumer acceptance of more conventional advertising. Development of more sophisticated online and multimedia solutions will also help to drive market growth.