Sitting Pretty

Simon Kelly

September 09, 2004

“Reports of my demise,” Mark Twain purportedly once declared, “have been greatly exaggerated.” Never in the short history of U.S. custom publishing has Mr. Twain’s statement rang so true, since, four years into the 21st century, the once struggling industry is positively exploding.

Unfortunately, up to now, efforts to record and quantify the explosion have been at best sporadic and at worst, anecdotal. So, to help marketing professionals chart a sound course through the custom content world, the Custom Publishing Council recently embarked on an ambitious program to collect—and even conduct—several studies that benchmark custom publishing’s growth and effectiveness.

The results are now in.

STAYING POWER

First of all, data still shows that magazines continue to slice through the thick fog of mass media to reach, capture, and hold consumers’ attention. Mountains of research demonstrate this, most recently a 2003 Magazine Publishers of America study that revealed a whopping 77 percent of America’s “influentials”—politically and socially active consumers, trusted for their product opinions and who influence the levers of change in the U.S.—are regular newsstand magazine readers, with an impressive 72 percent finding consumer magazine advertising “useful.”

What’s startling, however, is that most marketing professionals now know that they, too, have the power to propel their message from a medium that looks, feels, and reads like a newsstand magazine. According to a recent study conducted by the CPC and newsletter Publications Management, leading U.S. companies now spend, on average, nearly a quarter of their marketing, advertising, and communication budgets on custom publications, up from 13 percent in 2001.

This smashes U.S. custom publishing’s previous reputation as a relatively small marketing-strategy tributary. Rather, it seems custom publishing has grown into a raging river, a marketing channel much larger than previously thought. Statistically speaking, if a company isn’t using branded content to capture the hearts, minds, and dollars of its customers, chances are a chief competitor is.

And as with most trends, growth and success tend to go hand in hand, which is the case here. In a separate NOP Business Media study commissioned by the CPC, marketing directors reported custom publications outranked the effectiveness of Internet marketing; telemarketing; and print, television, and radio advertising when it comes to establishing longer-term customer relationships, promoting loyalty, and retaining existing customers.

Not only that, the same study found that an overwhelming 92 percent of marketing directors with first-hand custom publication experience rated custom publishing effective at relationship building, with 88 percent reporting it effective at generating loyalty, and 83 percent rating it effective at client retention.

OUTSOURCING IS IN

Custom publishing researchers have also turned their attention to the issue of staffing, which generally falls into two main categories: in-house production and outsourcing to professional custom agencies. Right now, according to the CPC–Publications Management study, a majority of companies choose to publish in-house, spending much of their collective $29 billion in custom-publishing expenditures on in-house publishing staff.

But that comes at a price: According to the same study, as general customer-magazine quality has increased, and with it higher target-audience expectations, companies that publish in-house must dedicate significantly more staff-hours to keep pace—spending 31 percent more time than they did two years ago.

As a result, outsourcing has increased dramatically in the last few years in order to handle U.S. companies’ myriad custom publishing needs, which include everything from glossy customer magazines and newsletters to snappy websites, e-newsletters, and annual reports. Publications Management found that 40 percent of leading companies now use external publishing agencies.

And companies that outsource are leveraging a beneficial custom-publishing trend: Since the custom publishing boom, custom publishers have increased the value they place on their staff. Once seen as the poor relations of consumer newsstand titles, custom publishing agencies now draw from the same creative talent pools as newsstand publications.

CASES IN POINT

One of the benefits of outsourcing, of course, is that many custom publishers track content-effectiveness results on their clients’ behalf, a rich pool of helpful data which the CPC now collects.

Take Charles Schwab’s On Investing, for example. Research found that 83 percent of recipients report that, as a result of reading On Investing, they are “more educated investors” and “more aware of Schwab services.” Nearly 40 percent said they would consolidate more assets at Schwab.

In the auto industry, Lexus magazine readers reported similarly high levels of customer engagement: 73 percent of readers shared the magazine with their family or friends; 87 percent of readers found the articles to be relevant or useful; and 89 percent of readers said that they enjoyed reading some or all of the articles.

And on the retail front, The Home Depot’s custom publisher, which produces Style Ideas magazine for its client, found that the magazine helps drive the retailer’s décor-related sales. In one survey, 40 percent of customers said they were likely to embark on a project featured in the magazine, and 98 percent said they found Style Ideas useful.