Custom Publishing; Are You Sitting on a Gold Mine?
Publishers looking to increase revenues often launch new publications, adding page counts and sales dollars (as well as a few gray hairs). However, starting a magazine is a risky endeavor with failure rates equal to starting a restaurant. Instead of going through the high-risk wringer of conventional publishing, magazines are increasingly turning to custom publishing as a surefire method of increasing profitability, especially during times of still-slim page counts and ad dollars.
Unlike the speculative reward potential of traditional publishing, custom publishing provides guaranteed revenue because the publisher establishes production costs and prices in advance that guarantee a profit. Custom publishing's rock-solid business model is attractive to publishers who contend with the ebb and flow of ad dollars on a quarterly basis.
"As a business model, it is almost like an advertising agency relationship because the fees are set ahead of time," says Lori Rosen, executive director of the Custom Publishing Council (CPC), an industry association.
Rosen says trade and consumer publishers are expanding into custom publishing because it can balance a company's cyclical revenues with stable profit centers.
According to the CPC, 32 billion copies of custom-published titles were distributed in 2004, a 170-percent increase over 1999. The average circulation per title grew by 37 percent during the same time period. Veteran magazine publishers with custom-publishing divisions include Bloomberg, Hearst, Penton Media and Thomson Media.
The appeal of custom publishing spans virtually every industry, says Joe Pulizzi, the director of the custom media group at Penton, publisher of 50 business magazines. "Every major company does multiple titles," he says. Automotive, airlines, hospital networks, professional associations and health clubs are all expanding their use of custom publications, for example. "If you give valuable information that will help [readers] do their jobs better, they will read [a custom publication]," Pulizzi says.