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MP22044

MAPS : Customer Magazines and Contract Publishing : September 2004

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This report covers: customer magazines, and, contract publishing, retail sector, automotive sector, travel, sector, finance,

Companies covered include: Cedar Communications, Forward, Ltd, Haymarket Customer Publishing, Illustrated London News, Group, John Brown Citrus, Publishing, Publicis Blueprint, Redwood, Publishing, River, Highbury Customer, Publications, Incisive communications, Just, Rare,

EXECUTIVE SUMMARY

Executive Summary

The customer magazine market is showing signs of reaching maturity. Many of its largest clients are becoming more demanding in their requirements, both in terms of creativity and value for money; publishing agencies are having to work harder as their margins continue to shrink.

The overall market has shown a high level of growth since 1999, but the rate of growth has been gradually slowing down, mainly due to the highly competitive market conditions that now apply.

Customer magazines within the retail sector — especially those produced for leading grocery multiples — encompass some of the highest circulation titles within the whole consumer magazine market. High circulation and strong emphasis on lifestyle content mean that these magazines are often seen as strong rivals to the mainstream women's magazine market — exacerbated by the fact that supermarkets are now important distribution channels for mainstream magazines.

The contract publishing industry has its roots in the travel sector; travel publications continue to be highly important to the industry. The travel magazine sector was particularly hard-hit by the terrorist attacks of 11th September 2001 and their aftermath. However, there are now signs of recovery in the travel market, which should filter down to the travel magazine sector.

The automotive sector includes a number of high-circulation magazines, including those from the Automobile Association (AA) and the Royal Automobile Club (RAC), as well as those from motor manufacturers, which use them to keep in regular communication with purchasers of their cars. The sector has seen a number of changes; for example, the AA has switched from having just one customer magazine to having two separate publications.

The customer magazine market has two types of consumer — those who read the titles and the clients that pay contract publishers to produce the magazines for them. Convincing the latter of the effectiveness of the customer magazine medium has become increasingly important as the market becomes more competitive; much effort is being expended by the industry in doing so. The Association of Publishing Agencies (APA) is currently conducting its own programme of research to measure return on investment across all industry sectors.

Key Note's exclusive research for this report probed the attitudes of general consumers and found that 35% claimed not to read customer magazines, 37% said that they read magazines provided by travel companies and 31% read the free magazines produced by the retail sector. 24% had used coupons and/or special offers from customer magazines and 18% had bought things as a result of seeing them in customer magazines. 19% agreed that customer magazines are a good way for companies to communicate with their customers, with 14% feeling that such magazines are generally just as well-produced and interesting as paid-for titles. Very few (6%) actively disagreed that this is the case.

TABLE OF CONTENTS

Executive Summary

1. Introduction

REPORT FOCUS

DEFINITIONS

Contract Publishing

Customer Magazines

2. Strategic Overview

BACKGROUND

MARKET SIZE

Table 1: Estimated Total Revenue of UK Publishers of Customer Magazines (£m), Years Ending December 1999-2003

CIRCULATION

Table 2: The Top Ten Audited Consumer Magazines by Average Net Circulation, January-June 2004

DISTRIBUTION

COMPETITIVE STRUCTURE

ADVERTISING

Table 3: Advertising Expenditure in Consumer Magazines (£m), Years Ending December 1999-2003

TRADE ORGANISATIONS

Association Of Publishing Agencies

THE CONSUMER

MARKET FORECASTS

Table 4: Forecast Total Revenue of UK Publishers of Customer Magazines (£m), Years Ending December 2004-2008

3. The Retail Sector

BACKGROUND

CIRCULATION TRENDS

Table 5: Selected Leading Audited Retail Titles by Average Net Circulation, January-June 2002-2004

THE MARKETPLACE

Table 6: Selected Leading Audited and Non-Audited Retail Titles by Publisher, Client and Circulation, 2004†

DISTRIBUTION

RECENT DEVELOPMENTS

4. The Automotive Sector

BACKGROUND

CIRCULATION TRENDS

Table 7: Selected Leading Audited Automotive Titles by Average Net Circulation, January-June 2002-2004

THE MARKETPLACE

Table 8: Selected Leading Audited and Non-Audited Automotive Titles by Publisher, Client and Circulation, 2004†

DISTRIBUTION

RECENT DEVELOPMENTS

5. The Travel Sector

BACKGROUND

THE MARKETPLACE

Table 9: Selected Leading Travel Titles by Publisher, Client and Circulation, 2004†

DISTRIBUTION

RECENT DEVELOPMENTS

6. The Finance Sector

BACKGROUND

THE MARKETPLACE

Table 10: Selected Leading Finance Titles by Publisher, Client and Circulation, 2004†

DISTRIBUTION

RECENT DEVELOPMENTS

7. An International Perspective

OVERVIEW

EUROPE

European Corporate Publishing Forum

THE US

Custom Publishing Council

Selected Publishers

8. PEST Analysis

POLITICAL FACTORS

ECONOMIC FACTORS

SOCIAL FACTORS

TECHNOLOGICAL FACTORS

9. Consumer Dynamics

OVERVIEW

Table 11: Summary of Research (% of respondents), 2004

USAGE OF CUSTOMER MAGAZINES

I Usually Read The Free Magazines Which Are Provided For Travellers When I Am Travelling On Planes, Ferries, etc. (S1)

Table 12: Reading Customer Magazines Provided by the Travel Sector (% of respondents), 2004

I Regularly Read Free Customer Magazines Which Are Produced By Shops (e.g. Boots, Marks & Spencer) (S2)/I Regularly Buy And Read Paid-For Customer Magazines (e.g. Sainsbury's)(S3)

Table 13: Reading Customer Magazines Provided by the Retail Sector/Buying and Reading Paid-For Customer Magazines (% of respondents), 2004

I Regularly Read Customer Magazines Which Are Produced By Car Manufacturers (S4)

I Regularly Read Customer Magazines Which Are Produced By Finance Or Telecommunications Companies (S5)

Table 14: Reading Customer Magazines Produced by Car Manufacturers/Finance or Telecommunications Companies (% of respondents), 2004

I Don't Usually Bother To Read Customer Magazines (S6)

GENERAL ATTITUDES TOWARDS CUSTOMER MAGAZINES

Customer Magazines Are A Good Way For Companies To Communicate With Their Customers (S7)

Table 15: Not Reading Customer Magazines (% of respondents), 2004

Table 16: Customer Magazines as Communication Tools (% of respondents), 2004

Customer Magazines Are Generally Just As Well-Produced and Interesting As Other Magazines (S8)

Customer Magazines Are Not Generally As Well-Produced and Interesting As Other Magazines (S9)

Table 17: Quality of Customer Magazines (% of respondents), 2004

PERSONAL RELEVANCE OF CUSTOMER MAGAZINES

I Can Usually Find At Least One Or Two Features/Articles To Interest Me In Customer Magazines I Receive (S10)/I Like Finding Out About New Products And Services From Customer Magazines (S11)

Table 18: Features/Articles and New Products/Services in Customer Magazines (% of respondents), 2004

The Offers And Information In Customer Magazines I Receive Are Usually Relevant To Me (S12)

I Have Used Coupons And/Or Special Offers From Customer Magazines (S13)/I Have Bought Things As A Result Of Seeing Them In Customer Magazines (S14)

Table 19: Relevance of Offers and Information in Customer Magazines (% of respondents), 2004

Table 20: Coupons/Special Offers In and Purchases Due To Customer Magazines (% of respondents), 2004

I Prefer To Receive Free Customer Magazines Through The Post Rather Than Picking Them Up In Stores Or Other Places (S15)

Table 21: Distribution Preferences for Customer Magazines (% of respondents), 2004

10. Company Profiles

CEDAR COMMUNICATIONS LTD

Corporate Strategy

Clients

Profitability

Table 22: Financial Results for Cedar Communications Ltd (£000), Years Ending 31st December 2000-2002