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Commentary & Analysis

Custom Publishing... Another Killer App?

By Barbara Pellow September 22,

By WhatTheyThink Staff
Published: September 22, 2003

By Barbara Pellow September 22, 2003 -- We've all heard that old adage, “The best way to grow your business is with the customers you already have.” In a difficult economy, marketing executives are focused on generating more business from current customers. With an existing relationship, the consumer has a higher propensity to purchase and the sales cycle is reduced. One technique that creative marketers are using to grow customer “share” is custom publishing. A custom publication is designed to provide valuable information that has relevance for the specific audience to bring about the desired consumer behavior. Custom publishing achieves this goal through tailoring the content to the customer's past buying behavior, information needs and desires. According to the Custom Publishing Council, 50,000 U.S. companies produce custom publications. Together, companies spend between $15 and $20 billion on these periodicals. The council estimates that custom publishing as a percentage of the dollars companies spent in marketing and advertising rose to 23.2% in 2002 - up from 13.2% in 2001. The custom publication, almost by definition, is a highly targeted vehicle aimed at narrow audiences such as the company's customer base. In fact, the average custom publication has an average circulation of a little more than 18,000 copies. I had the opportunity to interview Carol McCarthy, Senior Vice President of Operations for Imagination Publishing, to assess the impact custom publishing is having on customer relationship management. I also interviewed Imagination Publishing's print service provider representatives, Roy Hogsed, Account Executive, and Joel Bell, Director of Digital Services, from Quebecor World Direct in Atlanta. The objective of the interviews was to understand the implications for the traditional and digital printing markets. Imagination Publishing…Building on the Concept of Knowledge Sharing Jim Meyers, former president of Chicago-based MacMillan Publishing Companies, formed imagination Publishing in 1994. Jim's perspective was that businesses need to build trust with their customer base. Imagination Publishing was founded on the premise that a key technique for gaining customer credibility and positioning an organization as an industry authority is custom publishing. Carol McCarthy said, “Consumers will come to trust a company that provides them with valuable information, versus merely advertising and pushing more product.” Initially, the firm excelled in small business marketing. Imagination Publishing folded in Baumer Financial Publishing in the late 1990s. The goal was to expand its market share in the financial services market, a perennial leader in custom communications. Today, the company's business model is focused on the development and delivery of custom published content across all industries that integrate both print and electronic media to effectively enhance customer relationships. According to Carol McCarthy, “Publications are most successful if they integrate traditional offline printing with the latest online media. Using both print and electronic media gives companies the ability to push readers to online media and pull them back to print in order to provide real-time access and more breadth and depth of content and resources to the audience.” This is consistent with the data in a recent Magazine Publishers Association Survey of online users that indicated that 60% of magazine site visitors prefer both print and online versions of a magazine. Imagination Publishing works with a number of customers ranging from Wells Fargo's small business unit to Sylvan Learning Centers. At Sylvan, they created an integrated solution with tremendous results. The initial implementation incorporated a bi-annual magazine called Successful Student that was distributed to parents through Sylvan locations in Canada and the United States. Editorial content is differentiated to meet the specific needs of suburban, inner city, U.S. and Canadian readers. In addition to the print product, Imagination Publishing launched an e-Newsletter. It included customized articles and interactivity, including printable worksheets for students. Since the launch of the Successful Student magazine and the e-Newsletter, more than 25% of readers have become Sylvan customers. Imagination Publishing creates a quarterly custom publication for Wells Fargo called Business Advisor. The objective of this magazine is cross-selling. It educates small business customers about products and services that at some point might be beneficial to their businesses. While companies want to immediately measure the impact of a direct mail program, Carol McCarthy said, “The results of custom publishing are measured not only by immediate behavior, but also by how they strengthen relationships over time. We set up metrics that measure real-time feedback in addition to an annual review that includes an assessment of customer retention, cross-selling and new business. In addition we perform a readership survey to ensure that the editorial direction is on track. Carol also acknowledged that metrics are even more impressive with clients that use variable data to produce a one-to-one custom publication, “The data driven projects are hugely successful—and, can be very complicated. Imagination Publishing demands the best for our clients and we needed a print service provider partner that could assure us accuracy and excellence…We turned to Quebecor World Direct.” Quebecor World …Delivering Results Once Imagination Publishing has worked with its client on strategy and target market definition, the company turns to a digital service provider for data handling and production of the custom communication. Imagination Publishing's primary partner is Quebecor World's Atlanta location. Quebecor World uses Scitex inkjet print heads to handle personalization. Customization and personalization are achieved using equipment that prints with 240 dpi resolution at 1,000 feet per minute. Once the personalized materials are produced, they are integrated with traditional offset sections to create a completely customized publication. This hybrid manufacturing operation combines the targeting benefits of personalized sections with the economic benefits of longer-run print production. The real value comes in Quebecor World's ability to manage the data. Imagination Publishing sends the layouts and instructions relative to where fields and content are to be placed. Lists of data go through a postal sort. Then the data and program logic requirements come into the hands of the programmers. Quebecor World has a full-time programming staff. Roy Hogsed and Joel Bell explained to me, “These programmers are true programmers. Originally, this group was the Dittler Brothers' team that programmed and printed the original instant-win lottery ticket. The technical people at this location know how to write logic for IBM mainframe applications as well as do PC-based programming. We prepare all of the “if-then” logic to map customer characteristics to the magazine content…including special cover letters; coupons; name, address and maps to local dealer or franchise locations; and content. Once complete, we will coordinate traditional print and variable output with our magazine catalog group to ensure delivery of the custom published piece. While we provide top quality printing, our ability to manage data and programming for our customers provides unique significant additional value. ” Quebecor World knows that a strong understanding of all facets of information technology is required to create a truly “custom” publication. They have the resources and the skills in place to blend data into custom designs provided by Imagination Publishing so the resulting publication has context, organization and usefulness. The Digital Future for Custom Publishing The concept of custom publishing is a reality…especially in the B-to-B market. Companies like Cisco Systems, Hewlett Packard, Pitney Bowes and Wells Fargo are investing substantial portions of their marketing dollars in these types of projects. According to the Custom Publishing Council, forty percent of companies plan to spend more on custom publishing in 2003. Printers need to look at custom publishing as a tremendous opportunity for both traditional and digital color printing technologies. As promotional budgets shrink, targeting the audience most likely to respond with a purchase is the way marketing executives want to allocate marketing dollars. As data improves, the target markets and messages will become more narrowly defined and run lengths will become shorter and shorter. This should have a positive impact on the digital color market. To participate in this market, print service providers need to make an investment in both skills and technology infrastructure. There are a number of creative firms that understand the psyche of customers and how to effectively use information to elicit improved customer response. These firms are looking for trusted partners that can ensure delivery of high quality accurate and timely printed material. With custom publications yielding higher returns than traditional direct mail, they are becoming an integral part of the marketing mix. Print service providers need to position themselves to participate in this emerging opportunity.



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