Customer publishing report highlights growth

A report on the customer publishing industry has revealed that the communication channel has experienced impressive growth in the face of a tough economic climate for media and marketing.

The Mintel report, commissioned by APA and sponsored by DHL, reveals that since the last study three years ago, the customer publishing industry has grown to a value of GBP904m.

The research also shows that despite the economic slowdown, it is expected to reach GBP1.1bn by 2012, which will represent a predicted growth of 15 per cent in the next four years with the effects of the recession factored in.

The latest Bellwether Report shows that marketing budgets for 2009 have been slashed.

Main media advertising, which includes television and radio, has been hardest hit, yet internet advertising, which enjoyed strong double-digit growth in recent years, has been cut by a record amount.

The Mintel report shows that to counteract the gloomy forecast, the customer publishing industry is evolving and innovating to promote resilience during the downturn, but fundamentally be in a strong position for growth when the economy picks up.

While print remains the main format for customer publishers, accounting for 75 per cent of the total (including magazines, catalogues and direct mail), this figure has fallen significantly since the last study when it made up 90 per cent of the total.

Digital activity, encompassing web design, e-customer relationship management, e-zines, mobile applications, podcasts, has grown by 15 per cent in three years and customer publishers foresee digital becoming a major revenue stream for the industry moving further into the recession as clients move towards greater interactivity and seek stronger engagement with their customers.

The growth of the industry over the last three years is attributed to a number of factors including an increased client understanding of the medium's capabilities and the flexible nature of the channel, which enable a depth of engagement unrivalled by other marketing tools.

Supporting the growth in new business, the number of pitches increased by 60 per cent since the last report and the number of pitches per agency rose from five to 11 in the same period.

As a result of increased business, the average number of employees per customer publishing agency has increased from 66 to 74 employees.

The four major areas for growth over the last two years as ranked by customer publishers were found to be: new client spend on printed publications; higher spend by existing clients on printed publications, higher spend by existing clients on digital work; and new client spend on digital work However, higher spend by existing clients on digital work rises up the ranks to take second place as an expected main source of growth for the next two years, while higher spend on existing publications drops to number six.

While spend on digital is expected to increase and be a major revenue driver, customer publishers also predict an emerging trend for segmentation and more carefully targeted initiatives, which will see an increase in new projects, both print and digital, with lower circulations in order to deliver more relevant messages to specific market segments.

Additionally, bolstering the industry is its reduced reliance on the advertising-funded model.

While carefully chosen advertising can add to a customer publishing experience, a shift in focus has meant that in 2004 39 per cent of customer publishing turnover was derived from advertising, but this has now fallen to 19 per cent, equating to just GBP49 million.

Retail and distribution account for the largest segment within customer, with 32 per cent of printed titles and 44 per cent of online editorial content.

This sector has also experienced the most growth, with the proportion of retailing and distribution print titles more than doubling since the last Mintel report, when they only accounted for 15 per cent of the titles.

Other sectors to experience growth include utilities, public sector and telecoms with a four per cent rise and charities which have seen a one per cent increase since the last report.

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