Custom Publishing Grows Up

American Demographics, July 1, 2002

Byline: HASSAN FATTAH

Chances are you won't find the first issue of Crunch magazine on newsstands; the new glossy sold out soon after its launch. But if you've been anywhere near any of the chichi gym's 18 outlets, you've probably heard talk of the publication, which launched last December and hit newsstands in March. The 230-page, 150,000-circulation semiannual arrived with all the fanfare of a big budget magazine and even landed on the fashion gliteratti's "in" lists. About the only thing that was not played up about its launch is that Crunch is a custom magazine published for the Crunch chain of fitness centers.

Billed as the "almost-nothing-to-do-with-fitness" fitness magazine, Crunch proved fit as a marketing tool. The magazine is distributed to members at Crunch fitness centers in New York, Los Angeles, Boston, San Francisco and Miami. It's also available on various airlines, and for sale at newsstands for $4.99. And like traditional magazines, Crunch is packed with ads. But amidst all the talk of fashion and sex, you'll find its most important asset - the underlying message that Crunch is the "in" fitness club to join.

Welcome to the new generation of custom publishing. These magazines, which blend content with commerce, are morphing from a simple feel-good consumer-retention tool into a sophisticated means of acquiring new clients. The latest fashioning has the look and feel of Vogue or Cosmo, but unlike other titles found on the newsstand, their reason for being is to tout a specific corporate backer. For instance, Sony published Sony Style, sold on newsstands to talk up its electronics and, music recordings. Ikea produced Space, to push its sense of style and design in home furnishings. Cisco launched IQ, to promote its technology and products. And a host of other retailers, manufacturers and service providers, from Home Depot and Costco to General Electric, have gotten in on the act, creating their own custom publications filled with how-to advice and tips on using their stores and products more effectively.

"Custom magazines have become something of a corporate stamp of approval," says Samir Husni, professor of journalism at the University of Mississippi and author of the annual Samir Husni's Guide to New Consumer Magazines. "It's the service aspect that makes all of this so important."

In fact, the editorial quality of some of these custom magazines has risen to such heights that the category is going through somewhat of a reclassification. Magazines that carry independent editorial adjacent to product listings are commonly referred to as magalogs. And publications that are backed by one corporate sponsor, but are designed to be separate profit centers, now fall under the heading of contract publishing. Magazines that accept outside advertising and are sold on the newsstand often fall into this category.

This burst of new magazines that seemingly blur the lines between traditional and custom publishing are flourishing while their mainstream brethren are struggling in the worst advertising recession in decades. Advertisers have slashed ad budgets but have maintained or increased marketing budgets that fuel custom magazines. According to Publications Management, an industry report produced by custom publishing firm McMurry, companies now spend upward of $2.4 billion publishing custom titles, targeted at clients and employees, to push their brands and their products. Much of that content is produced in-house, but a rapidly growing percentage of custom titles are being farmed out to firms like McMurry and Fluent Communications, and to publishing companies like Hearst, CMP and others. In fact, 1 in 13 custom publications is now outsourced, Publications Management reported. And from 2000 to 2001, that market grew 13.1 percent; in 1999 alone, it rose 34.5 percent.

Corporate America is shelling out big bucks on these publications: The average business spent about $500,000 a year on newsletters and magazines in 2001, but some 9 percent of those surveyed spent more than $1 million. Despite a 50 percent drop in the number of companies spending such massive amounts between 2000 and 2001, the ranks of companies spending $500,000 or less have swelled with hundreds of new entrants, according to Publications Management.

This windfall is in stark contrast to previous recessions, when custom content was traditionally the first to get chopped, notes Chris McMurry, president of McMurry Publishing and editor of Publications Management. The most recent economic downturn has actually sparked an increase in spending on the tailored marketing vehicles.

Indeed, 100 out of 250 companies surveyed by Publications Management said they intend to increase spending on custom publishing efforts this year. Says Husni: "The more difficult the economic climate, the more likely companies are to want to put out tailored messages. They're a double whammy - they let you combine advertising with a clear message with a service to their customers."