Ethanol producers aren't exactly feeling the love these days. Critics say they are reducing the amount of food on world markets—ethanol can be made from sugar cane and corn—and driving commodity prices up.
POET Energy, the largest ethanol producer in the world, wanted to address its critics' complaints while providing information to corn farmers and politicians, as well as current and potential investors. In addition, the company wanted to find a different, less wasteful way of disseminating industry information and company news. At the time, it was mailing more than a 100 printed newsletters each year, most produced by the company's individual plants.
POET hired custom publisher Imagination to create a print publication for the company. The quarterly magazine, Vital, debuted in April and almost immediately attracted attention. Its circulation jumped from 11,000 to 21,000 between the first and second issues. Advertising for both issues sold out.
“This is still more expensive than a pure online play, but being as we are able to sell some advertising, it's closer [than it otherwise might be],” said Greg Breukelman, POET VP-communications. “And the quality of the product is so much greater. Before, if someone got a newsletter from a plant it was front and back of an 8½-by-11 piece of paper. Now, it's a beautiful magazine with well written articles, a lot of thought leadership and interesting articles. ... The value is a 100 times greater.”
While many traditional media companies report anemic growth in their print businesses, POET and other marketers are embracing custom products, according to research from Junta42, a division of Z Squared Media, and BtoB, which found that 29.4% of b2b marketing budgets are being allocated to custom content. Another study from the Custom Publishing Council (CPC) and Publications Management said the average U.S. business spends $912,532 on custom publishing or content marketing activities. The same study supports Junta42's results, finding that organizations on average spend 27% of their total marketing dollars on custom content activities.
Moreover, it's not only large international companies making the leap into custom publishing, said Joe Pulizzi, Junta42's founder and chief content officer. “Sponsorships are expensive,” Pulizzi said. “Billboards and print advertising are expensive. Custom is not nearly as expensive, which is why, for small and midsize companies, custom content is very appealing and makes sense.”
There are a number of companies in the custom content business (see chart, page 32). These vendors include operations within established media companies such as Meredith Integrated Marketing, which has been doing custom publishing for nearly 40 years, to relative newcomers such as b2b advertising firm HSR Business to Business, which now counts custom publishing among its offerings.
The results are reflected in the numbers. This year, there are more than 143,000 unique custom titles, an increase of 14.5% from 2007, according to CPC.
“Custom publishing certainly isn't a new trend, but the number of sources on the supply side and the growing demand is making this market what it is today,” said Sarah Rotman Epps, a media analyst at Forrester Research. “On the supply side, you've got publishers seeking opportunities for growth. Their legacy business is decreasing and stagnating, and they see custom as a way to leverage their existing infrastructure so they are boosting their capabilities by acquiring companies or beefing up their own staff.”
Take educational publisher Pearson and technology publisher United Business Media. Separately, they're both seeing big gains from their custom arms, Epps said.
Industry observers say the demand for custom content is coming from marketers that are increasingly audience-focused. Unlike traditional advertising, custom publishing is about the lifestyle—not a specific product or service. Add the fact that it's as expensive today as it was even five years ago to produce multiple versions of the same magazine to target specific demographics, and you've got a vehicle that theoretically can reach the right target at just the right time.
“The cost for me to change a cover—I might customize my magazine based on age or location—might be $500 or less,” said Fred Petrovsky, president-custom media at McMurray. “And there are no paper or printing costs online. I could do 20 or 30 versions. It's a wonderful world of customization.”
Chris Schraft, president-Time Inc. Content Solutions, said custom content also lets advertisers serve their customers and prospects in ways that they couldn't in the past.
“I think all marketers are employing custom content specifically to build or strengthen relationships with their best customers,” Schraft said. “For example, in the b2b space, often--times we're seeing custom content created in the form of white papers or thought leadership pieces.” Bottom line: it's about what advertisers can do for customers and not the other way around.
While custom publishing is hot, digital custom publishing is also seeing significant growth. During the past 18 months, Imagination has seen its revenue from digital content increase from 15% to 45%.
That's a very different story from just a few years ago, said Mike Winkleman, president and chief creative officer of custom firm Leverage Media. Winkleman, who is also the chairman of the 87-member CPC, said that when CPC members were asked in previous years what nonprint media jobs they were doing, only a handful had something to report.
“We found very small percentages, maybe 3% or 4% of CMOs ... were using more advanced Web technologies beyond simple webzines,” Winkleman said. “But what we're seeing going on is moving very quickly.” So much so that the CPC has opened up 11 categories for its Pearl Awards specifically for digital content.
The reasons for the move to digital mirror those of traditional digital advertising. Digital custom content provides instant feedback, is cheaper to produce and can be altered and tweaked on the fly.
“The technology makes things so easy,” said Jane Ottenberg, president of the Magazine Group. “Plus there's no end to what people need. Clients are looking for content that's going to engage people wherever they are looking, and now that's commonly online. Digital content might be [rated] a five or a seven now in importance, but it's going to be a 10 in a year.”
A recent survey of marketers' custom spending habits seems to support this view. Today, according to the March 2008 Junta42 Match and BtoB survey, email newsletters and white papers are at the top of the digital heap, with 69% and 50% of marketers, respectively, reporting they produce such content. But so-called Web 2.0 offerings are on the rise as well. Many custom publishers interviewed are reporting an increased demand for blogs, microsites, podcasts, social media and Web video.
Petrovsky said that many of his company's clients are looking for multiple ways to distribute content. “It's very rare for a company to only deliver content one way,” he said.
This is why, said Simon Kelly, COO of Story Worldwide, that his clients are doing online in conjunction with print. “Every custom pub client has some type of digital component or companion. We're not seeing existing print clients that want to replace print with digital,” he said.
But even those marketers need an education, he said, since it's not enough to create, for example, a beautiful microsite and launch it. Customers will visit once and, not seeing a continual stream of new information, never come back. This may come as a shock for marketers unaccustomed to producing daily content and updates.
“When you think about content on the Web, you need to think about an editorial plan going out a year or two years. From a budget spend, we sit down and have our clients think about it over a long period of time,” Kelly said.
Marketers also need to think about how they are going to publicize their online efforts because, like all online entities, just because you build something doesn't mean people are going to come.
“You have to promote it,” said Forrester's Epps. “So you might spend more of your custom publishing budget on traditional advertising. Things like email marketing, display ads—any of the components in traditional marketing mixes.”
In addition, said Time Inc.'s Schraft, marketers and their custom firms must pay close attention to search engine optimization when creating online content.
“Search is a huge b2b driver. It's how businesspeople find answers,” Schraft said.
Finally, although custom publishing is generally more about providing information to an installed base than prospecting, there should be a call to action or a way for potential clients to get in touch, said Leverage Media's Winkleman.
“There should be some way for people to click through for more details whether it's on a blog or a Web site. Or maybe you're providing something that lets you click through and view video of the person who is being profiled in a story,” he said. “It's always about giving more.”
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