B-to-B Advertising: The Custom Publishing Solution

Folio: The Magazine for Magazine Management, May 1, 2004 by Anthony DeRico

Byline: Anthony DeRico

If custom publishing isn't part of your business-to-business publishing company's advertising plan, it should be. Custom pub has mushroomed into a $20 billion business in the past 10 years, according to a 2003 white paper from American Business Media. Although growth slowed during the recent ad recession, custom-pub budgets keep rising.

Custom publishing also has become an increasingly important vehicle for b-to-b marketers, accounting for 13 percent of ad budgets in 2001, according to Publications Management, an industry newsletter put out by McMurry Publishing.

The reasons are obvious, says Chris McMurry, CEO of custom publisher McMurry. Clients see custom mags as low-risk propositions - a way to reach customers directly with a message they control at a time when they're questioning the efficacy of display ads in b-to-b publications. "With declining newsstand sales, subscriber acquisition difficulties and advertisers wanting integrated promotional solutions, it's easy to see why custom publishing's time has arrived," he says.

THE CANNIBALIZATION MYTH

To date, however, only a small fraction spent on custom-pub marketing solutions has gone to b-to-b publishers. The lion's share goes to independent custom publishers such as Massachusetts-based Triangle Publishing Services, which produces such corporate-sponsored titles as Compaq's Extreme Business and Microsoft's OEM.

While some b-to-bs, including International Data Group, Thomson Media and Advanstar, are gaining ground, many b-to-bs opt for an arms-length relationship and farm out custom projects to companies like Triangle, whose clients include Penton Media and Ziff Davis. By using outside vendors, these companies maintain clear lines between their regular editorial and custom content, which the advertiser controls. Also, notes Triangle CEO Larry Marion, "b-to-b companies have to worry about cannibalizing their ad base, while custom publishers don't have to worry about internal politics or separation of church and state."

However, companies such as Thomson Media say they've had no trouble jumping into custom publishing and calling on the same clients to advertise in traditional print and online products. Robert Whitaker, national sales director for Thomson's Accounting Media Group (Accounting Today, Practical Accountant) helped develop a custom Website and tax-prep content sponsorships in print for clients such as the IRS in its e-file campaign. He admits to some collaboration between Thomson's custom pub and magazine staffs but says there's no content crossover: "Our custom clients have no say in any of the editorial products we produce."

Nor has custom publishing cut into client sales of print ads, says Whitaker. He forecasts that as the economy improves, both print and custom pub budgets will keep rising. "Cannibalization is a myth," he says. "If you package them correctly, publishers should only see an increase."

Tyler Schaeffer, SVP/director of media brand planning for Foote Cone & Belding, agrees. He advises a "holistic" approach that combines custom pub, the Web and print ads. "Savvy advertisers understand they must cut through the clutter, get close to the client and keep selling the brand, not just the properties," he says.

At IDG's Network World, the focus on custom intensified in 2002 when advertisers such as Quest, Lucent, EMC, HP and Nortel came knocking. After producing advertorials, online events and educational print products, NW created its own custom-pub division, the Customer Access Group (CAG), says Tom Davis, associate publisher and general manager.

"Custom publishing allowed us to leverage our print and online programs to bring them to the next level of profitability," says Davis. And it hasn't hurt NW's print ads, either. NW's ad revenues soared 15 percent, with ad pages climbing 9 percent year-over-year through February 2004, according to CMR.

CUSTOMER CONTROL

Davis points out that the new division has allowed NW to separate the custom business from the magazine staff. Director of custom sales Sean Budka and his team wrote the proprietary applications and developed the systems that provide accountability for NW advertisers. CAG's custom program includes the ability to track return on investment and generate client leads though micro-Websites that give marketers access to up-to-the-minute customer data compiled from online custom campaigns.

Cisco, one of NW's largest clients, uses CAG's print and online custom solutions to target the optical and security markets. CAG's custom solution for Cisco includes single-page book ads, three or four inserts, online banner ads and e-newsletters, custom content for co-branded e-mails and a micro-site that provides premium content and allows Cisco marketers to track ROI. Davis claims clients enjoy having control over the delivery of their message.

Quest marketing communications manager Rebecca Cramer, agrees. Quest turned to CMP and IDG to help launch its "Application Confidence" campaign in 2002. Using b-to-b publishers that offered custom solutions versus ad space, Quest could tailor Web event and print programs, says Cramer. "This is such a great platform because it gives you so much flexibility with the content, and it's easier to track."