Custom e-publishing: 10 questions; few publishers have successfully transformed this new media into solid revenue streams

Folio: The Magazine for Magazine Management, Jan, 1998 by Jennifer Sucov

Custom publishing is undergoing an identity crisis. As online and print publishing dovetail, custom publishers are increasingly asking themselves, "Who am I, and what business am I in?"

Rex Hammock, president of Hammock Publishing, has asked himself that question many times since deciding to make Web development part of the menu of relationship-marketing services offered by his Nashville, Tennessee-based custom-publishing company. In August 1995, Hammock developed (and now maintains) a Web site for long-standing print client National Auto/Truckstops, Inc. As of October, he will have added a site for the National Federation of Independent Business (NFIB) as well.

"We've spent many hours asking ourselves,"is this what we do?' "says Hammock. But after seeing increased ad sales for the print version of Road King as a result of the Web site, and increased interest in the Web from existing custom publishing clients, Hammock no longer questions whether online publishing should become part of his business. "If you deconstruct what a Web site is," he posits, "it's all the elements of a great magazine."

But Hammock's experience is so far unique in the custom-publishing community. Although many of his peers embrace the idea of online ventures as a part of "custom communications," few have found a business model for transforming new media into new revenue streams. Most custom publishers are still asking a lot of questions about the larger role of new media in their field. Here, a group of custom publishers respond to the most common concerns about the financial viability of custom electronic publishing, and share insights gained through firsthand experience.

Should custom publishers consider adjusting their media mix?

When custom-publishing pioneer John Caldwell Jr. formed Boston-based Custom Communications Partners (CCP) in January 1995, he wanted to get back to the basics. Caldwell's initial focus for his new venture was on developing traditional print clients that now include IBM, Harvard Pilgrim Health Care and Booz-Allen & Hamilton. But after almost two years in business, Caldwell is beginning to look down the road -- and online services are definitely part of his future communications mix.

We're in a stage with our clients in which they're all aware that we can provide Web-site assistance for them," says Caldwell."As we get into 1997, there will be a greater opportunity to present Custom Communications Partners as a mix of print and electronic publishing. We need to stay flexible and find out how the communications explosion will turn out."

But won't offering online services fragment my business?

For Hammock, online services are a natural extension of custom publishing. "We've always viewed what we do through relationship-marketing glasses," he says. "We're talking about execution on a platform -- that's not really fragmented."

Other custom firms, however, want to stick to print -- at least for now. Karel Laing, president of Bloomington, Minnesota-based K.L. Publications, is watching online publishing -- but from a distance. To devote enough attention to print clients that include Foremost Insurance, Sun Oil and Patterson Dental Co., Laing says "you do what you do, and you do it the best in the country. To spill out into [Web creation] might not be the best idea."

The same holds true for Chris McMurry, chief operating officer of Phoenix-based McMurry Publishing, Inc. McMurry recognizes the growing importance of online publishing to the communications industry, but sees his role as a custom publisher as predominantly print-based. "As a business, you have to decide what ancillary products you win offer", he says. "There probably aren't many in the Web-site development business who would decide to publish a magazine. It's not their business."

Can I expect my print clients to look to me for online services?

Michelle Berman, publisher of Hachette Custom Publishing, says offering online services in tandem with print services is "part of every one of our discussions."According to Berman, the New York City-based division of Hachette Filipacchi-publisher of Sony Style, Mercedes Momentum and Century 21 House & Home -- is in talks with several clients about creating a presence for them on America Online. Berman feels that leveraging the resources and reputation of Hachette's New Media division will "set us apart from other custom publishers."

Hachette competitor Meredith Custom Publishing, meanwhile, is also reportedly in development on sites for several-custom-publishing clients including The Home Depot. (The Des Moines, Iowa-based publisher declined to be interviewed for this story.)

"Two years ago, clients weren't asking us [online) questions,"says Dick Stockton, vice president and general manager of NYT Custom Publishing, a division of the New York Times Information Services Group. Now, NYT Custom Publishing, in conjunction with the Information Services Group which operates sites for the New York Times Syndicate), works with clients like Blockbuster, IBM and the Connecticut Tourism Board to cross-promote these clients' existing Web sites, provide content and consult on Web projects.