Customer Magazines and Contract Publishing - Market Assessment

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.

1. Introduction

REPORT FOCUS

DEFINITION

2. Strategic Overview

BACKGROUND

MARKET SIZE

Table 1: Estimated Total Revenue of UK Publishers of Customer Magazines (£m), 2002-2006

Figure 1: Estimated Total Revenue of UK Publishers of Customer Magazines (£m), 2002-2006

CIRCULATION

Table 2: The Top Ten Audited Consumer Magazines by Total Average Net Circulation Per Issue, 1st July to 31st December 2006

DISTRIBUTION

Distribution Methods

Mail

Free at Point of Contact

With Newspapers

Door Drops

Free or Paid-For?

Digital Alternatives

COMPETITIVE STRUCTURE

ADVERTISING

Table 3: Advertising Expenditure in Consumer Magazines (£m), Years Ending December 2001-2005

Figure 2: Advertising Expenditure in Consumer Magazines (£m), Years Ending December 2001-2005

TRADE ORGANISATIONS

THE CONSUMER

MARKET FORECASTS

Table 4: Forecast Total Revenue of UK Publishers of Customer Magazines (£m), 2007-2011

3. The Retail Sector

BACKGROUND

CIRCULATION TRENDS

Table 5: Selected Leading Audited Retail Titles by Total Average Net Circulation per Issue, 1st July to 31st December 2002-2006

THE MARKETPLACE

Table 6: Selected Leading Audited and Non-Audited Retail Titles by Publisher, Client and Circulation, 2007

DISTRIBUTION

RECENT DEVELOPMENTS

4. The Automotive Sector

BACKGROUND

CIRCULATION TRENDS

Table 7: Selected Leading Audited Automotive Titles by Total Average Net Circulation per Issue, 1st July to 31st December 2002-2006

THE MARKETPLACE

Table 8: Selected Leading Audited and Non-Audited Automotive Titles by Publisher, Client and Circulation, 2007

DISTRIBUTION

RECENT DEVELOPMENTS

5. The Travel Sector

BACKGROUND

CIRCULATION TRENDS

Table 9: Selected Leading Audited Travel Titles by Total Average Net Circulation per Issue, 1st July to 31st December 2002-2006

THE MARKETPLACE

Table 10: Selected Leading Audited and Non-Audited Travel Titles by Publisher, Client and Circulation, 2007

DISTRIBUTION

RECENT DEVELOPMENTS

6. The Finance Sector

BACKGROUND

THE MARKETPLACE

Table 11: Selected Leading Audited and Non-Audited Finance Titles by Publisher, Client and Circulation, 2007

DISTRIBUTION

RECENT DEVELOPMENTS

7. An International Perspective

UK COMPANIES' INTERNATIONAL CONNECTIONS

Archant Dialogue

Brooklands Group

Forward

Haymarket Network

John Brown

Publicis Blueprint

Redwood

Specialist Publications

Story Worldwide

MAGAZINE LAUNCHES

8. PEST Analysis

POLITICAL FACTORS

ECONOMIC FACTORS

SOCIAL FACTORS

TECHNOLOGICAL FACTORS

9. Consumer Dynamics

OVERVIEW

Table 12: Customer Magazines — Attitudes and Usage (% of respondents), March 2007

Usage

General Attitudes

Personal Relevance

USAGE OF CUSTOMER MAGAZINES

Travel Magazines

Table 13: Those Who Read Customer Magazines Provided by the Travel Sector (% of respondents), March 2007

Retail Magazines

Table 14: Those Who Read Free Customer Magazines Provided by the Retail Sector, and Those Who Buy and Read Paid-For Customer Magazines (% of respondents), March 2007

Automotive, Finance and Telecommunications Magazines

Table 15: Those Who Read Customer Magazines Produced by Car Manufacturers, and Those Who Read Customer Magazines Produced by Finance or Telecommunications Companies (% of respondents), March 2007

Disinterest in Customer Magazines in General

Table 16: Those Who Do Not Usually Bother to Read Customer Magazines (% of respondents), March 2007

GENERAL ATTITUDES TOWARDS CUSTOMER MAGAZINES

Customer Magazines as a Communication Tool

Table 17: Those Who Think That Customer Magazines Encourage Companies to Communicate With Their Customers (% of respondents), March 2007

Customer Magazines Versus Conventional Magazines

Table 18: Those Who Do and Do Not Think That Customer Magazines Are Generally Just as Well-Produced and Interesting as Other Magazines (% of respondents), March 2007

PERSONAL RELEVANCE OF CUSTOMER MAGAZINES

Interest in Features/Articles, and Relevance of Coupons or Special Offers

Table 19: Interest in Features/Articles, and Relevance of Offers and Information in Customer Magazines (% of respondents), March 2007

Discovery and Purchasing of Products and Services as a Result of Reading Customer Magazines

Table 20: Those Who Find Out About New Products and Services From Customer Magazines, and Those Who Have Bought Things Seen in Them (% of respondents), March 2007

Use of Coupons or Special Offers

Table 21: Those Who Have Used Coupons and/or Special Offers From Customer Magazines (% of respondents), March 2007

Preference for Receiving Customer Magazines by Post

Table 22: Those Who Prefer to Receive Customer Magazines Through the Post (% of respondents), March 2007

10. Company Profiles

INTRODUCTION

CEDAR COMMUNICATIONS LTD

Corporate Strategy

Profitability

Table 23: Financial Results for Cedar Communications Ltd (£000 and %), Years Ending 31st December 2003-2005

Recent and Future Developments

FORWARD LTD

Corporate Strategy

Profitability

Table 24: Financial Results for Forward Ltd (£000 and %), Years Ending 31st December 2003-2005

Recent and Future Developments

HAYMARKET NETWORK LTD

Corporate Strategy

Profitability

Table 25: Financial Results for Haymarket Network Ltd (£000 and %), Years Ending 31st December 2003-2005

Recent and Future Developments

INK PUBLISHING

Corporate Strategy

Profitability

Recent and Future Developments

JOHN BROWN PUBLISHING LTD

Corporate Strategy

Profitability

Table 26: Financial Results for John Brown Publishing Ltd (£000 and %), Years Ending 31st March 2004-2006

Recent and Future Developments

PUBLICIS BLUEPRINT LTD

Corporate Strategy

Profitability

Table 27: Financial Results for Publicis Blueprint Ltd (£000 and %), Years Ending 31st December 2003-2005

Recent and Future Developments

REDACTIVE PUBLISHING LTD (REDACTIVE MEDIA GROUP LTD)

Corporate Strategy

Profitability

Table 28: Financial Results for Redactive Publishing Ltd (£000 and %), Years Ending 29th February 2004 and 28th February 2005-2006

Table 29: Financial Results for Redactive Media Group Ltd (£000 and %), Years Ending 28th February 2005 and 2006

Recent and Future Developments

REDWOOD PUBLISHING LTD

Corporate Strategy

Profitability

Table 30: Financial Results for Redwood Publishing Ltd (£000 and %), Years Ending 31st December 2003-2005

Recent and Future Developments

RIVER PUBLISHING LTD

Corporate Strategy

Profitability

Table 31: Financial Results for River Publishing Ltd (£000 and %), Years Ending 31st March 2004-2006

Recent and Future Developments

OTHER COMPANIES

Brooklands Group Ltd

ILN Group (The Illustrated London News Group)

PSP-Rare Publishing Ltd

Seven Squared

Seven Publishing Group Ltd

Square One Group Ltd

Specialist Publications (UK) Ltd

Sunday Publishing Ltd

11. The Future

INTRODUCTION

MARKET FORECASTS

Table 32: Forecast Total Revenue of UK Publishers of Customer Magazines (£m), 2007-2011

Figure 3: Forecast Total Revenue of UK Publishers of Customer Magazines (£m), 2007-2011

THE CONSUMER

12. Consumer Confidence

METHODOLOGY

KEY FINDINGS THIS QUARTER

THE WILLINGNESS TO BORROW

Confidence Improves

Table A: The Average Amount Consumers Are Willing to Borrow in Order to Purchase Expensive Items at Current and Constant November 2004 Prices (£ and £bn), February 2006-2007

Willingness to Borrow Slips Slightly

Table B: The Number of Adults Willing to Borrow in Order to Purchase Expensive Items (000 and %), February 2006-2007

SPENDING FROM SAVINGS

Slight Increase in Spending from Savings

Table C: The Average Amount Consumers Are Willing to Spend from Savings in Order to Purchase Expensive Items at Current and Constant November 2004 Prices (£ and £bn), February 2006-2007

Saving Grows in Relative Importance

Table D: The Average Amounts Adults Are Confident Spending to Purchase Expensive Items (£ and %), February 2006-2007

13. Further Sources

Associations

Publications

General Sources

Bisnode Sources