Custom Publishing: Opportunities Abound

For B2B Publishers

An American Business Media White Paper

Sponsored by the Brand Extension Committee

Prepared by
The Publishing & Media Group

January 2003
Custom Publishing: Opportunities Abound For B2B Publishers

Table of Contents

Section I Introduction: What Is Custom Publishing? Page 4

Section II The History of Custom Publishing Page 7

Section III Size, Structure & Growth of the Industry Page 11

Section IV Major Trends & Drivers in the Industry Page 14

Section V Why Custom Publish? Page 17

Section VI Custom Publishing Best Practices Page 19

Section VII Custom Publishing Case Studies Page 22

Section VIII Sources & Contact Information Page 30

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Custom Publishing: Opportunities Abound For B2B Publishers

Introduction: What Is Custom Publishing?

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Custom Publishing: Opportunities Abound For B2B Publishers

Introduction: What Is Custom Publishing?

Although custom publishing in some form has been in existence for at least a century,
only in the last decade has it gained noticeable momentum in the U.S. And while interest
in custom communications has accelerated throughout the media industry, perhaps
nowhere has it become more important than in the business-to-business and consumer
magazine segments.

The reasons for the rise of custom publishing, like its definition, vary depending upon
which media segment is being considered. But while custom communications is simply a
buzzword or an experiment in some media sectors, it has become an increasingly
significant component of the product mix at the average B2B and consumer magazine
publisher.

The role of custom publishing has become even more important to magazine publishers
over the past two years, as their traditional publications struggle with declining
circulation numbers and a brutal advertising downturn. These negative trends have
merely highlighted the accelerating growth of custom publishing that has been building
for the past 10 years. Once viewed as a feel-good supplemental business carried out at
the behest of a few core clients, the custom publishing phenomenon has spawned new
divisions within traditional magazine publishers, as well as standalone custom publishing
houses and an industry trade organization.

The groundswell of support for custom publications by corporations nationwide has

fueled tremendous growth in what has become an industry within the traditional
magazine industry. Corporations spent nearly $20 billion on custom communication
vehicles in 2001. And while only a fraction of that figure was spent on outsourced work,
industry statistics show that outsourcing is becoming increasingly prevalent, providing a
wealth of opportunities for independent publishers. Even the large advertising and
marketing services rollups, such as Interpublic Group and WPP, have joined the fray by
acquiring private custom publishers in an effort to expand the services they provide to
clients.

“Add a sponsor-funded, typically no risk economic model to the picture in a day and age
headlined by declining newsstand sales, subscriber acquisition difficulties and advertisers
crying out for integrated promotional solutions, and it’s easy to see why custom
publishing’s time has arrived,” said Chris McMurry, chief executive officer of
independent custom publisher McMurry.

Custom publishing in the U.S., however, is still in its infancy. Approximately 60% of the
companies involved in custom publishing established their in-house or standalone
operations during the last decade, according to a recent survey by Publications
Management, an industry newsletter published by McMurry. The industry’s trade
organization, the Custom Publishing Council, itself is only four years old. In addition,
the survey found that no single company dominates the industry. A handful of leading
firms generate between $20 million and $50 million in annual revenue, while the majority

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Custom Publishing: Opportunities Abound For B2B Publishers

are small in-house divisions and standalone firms. These statistics appear to reveal an
enormous opportunity for B2B magazine publishers to either buy their way into the
market, or launch their own operation and get in on the ground floor of a burgeoning
market.

While the definition of custom publishing varies even within the B2B magazine business,
most publishers agree that such publications are editorial-based marketing tools used to
achieve specific business objectives. Among these goals are to increase brand awareness,
improve customer loyalty, cross-sell products and increase consumption.

The frequency of these publications varies, and the media used to reach the end user do
as well, from magazines and newsletters to websites and e-mail. Sponsorship models
also vary. The most common form of sponsorship is the single-sponsor model, which
gives one client complete control over every aspect of the publication. The other, less
common form, is syndicated sponsorship, in which several clients share the costs and
creative control of the publication.

But while several aspects of custom publishing vary, one thing remains constant: custom
publishing has become a strong tool for advertisers and marketers to reach narrow target
audiences. And if expectations are met, a long-lasting and lucrative relationship can
develop.

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Custom Publishing: Opportunities Abound For B2B Publishers

The History of Custom Publishing

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Custom Publishing: Opportunities Abound For B2B Publishers

The History of Custom Publishing

Most custom publishing experts believe that farm equipment maker John Deere first
hatched the idea of using a custom publication to cultivate relationships with customers.
The publication, Furrow, was originally published in 1895, and it’s still in circulation
today.

Back in 1895, John Deere was a growing agribusiness on the cusp of a bull market in
farming after a decade of market turbulence. The company was facing increased
competition, while at the same time experiencing a management transformation, when
founder John Deere stepped down as president and his son took over. Deere’s son,
Charles, was known as a shrewd businessman with a knack for marketing and a penchant
for new ideas. His idea to open up regional marketing centers across the country to serve
local dealers is considered a landmark in American business.

Then in the mid-1890s, L.B. Kuhn, who served as John Deere’s one-man advertising
department at the time, concocted an idea to produce a quarterly publication that would
help solidify the firm’s relationships with local dealers, who, in turn, would use it to
expand their client bases. The publication’s mission then, as now, was to present useful
information about modern farming methods, introduce new agricultural technology and
encourage the purchase of John Deere products through advertising. Kuhn was left with
the unenviable task of selling the idea to company management and the firm’s local
dealers.

The harder sell may have been to the dealers, who were being asked to submit mailing
lists of their customers, as well as pick up part of the distribution costs, according to
Andrew Markwart, current managing editor of the Furrow. “All the dealers were
independent back then, and they were unaware of any other companies doing such a thing
at the time. They had to be convinced that this new publication had real value,”
Markwart explained. To do this, Kuhn would have to court dealers one at a time.

What followed was a nearly two-year promotional effort that included direct mail and
face-to-face promotions aimed at signing up a sufficient number of dealers to warrant a
full-scale launch. The Furrow was in full swing by mid-1897 and it would double and
redouble circulation during the 20 years that followed, which would mark the most
prosperous time in history for American farmers.

At its peak in the first decade of the 20th century the Furrow reached a circulation of
almost 5 million in North America. Since that time, of course, the number of farmers has
declined substantially, but the Furrow still claims a circulation of 1.6 million worldwide
(685,000 in North America) through 31 regionalized editions.

“The Furrow has become an institution in U.S. agriculture. It’s been read by generations
of farmers,” Markwart said. “As the market has shrunk over the years, we have found it
even more important to capture the attention of those readers. Although our mission

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Custom Publishing: Opportunities Abound For B2B Publishers

remains the same, we’ve worked hard to create regionalized editions, make the
publication more photogenic and, generally, create a pleasing environment for ad
messages to be there.”

The success of the Furrow caught the eye of other major corporations in the first half of
the 20th century. The large automobile manufacturers were quick to follow John Deere’s
lead with custom publications of their own, as that business grew at exponential rates
through the 1950s. Most, if not all, of the automobile conglomerates today produce a
series of custom publications for their dealers and customers. The major airlines
followed suit with in-flight publications in the 1960s and 70s.

“John Deere’s success with its publication really launched this business,” said John
Caldwell, a custom publishing consultant and former industry executive. “John Deere
wanted to build and maintain relationships with its dealers, and the dealers wanted to do
the same with the farmers. This is how it still works today, whether you’re talking about
the B2B or B2C markets.”

Business-to-business and consumer magazine publishers reportedly didn’t test the waters
of custom publishing until around the late 1960s. Traditional magazine publishers like
Meredith and independent publishers like Putman are recognized as pioneers in this realm
because they realized that not only could custom publications fortify relationships with
current advertisers, but they also could open up entirely new relationships with non-
advertisers.

“Only a few companies early on understood that you could have a profitable relationship
with an advertiser even if you didn’t have them as a traditional client,” said Rex
Hammock, president of custom publisher Hammock Publishing.

Most of the leading corporations today, including General Electric, Home Depot and
Sony, produce custom publications for employees, dealers and/or customers. In addition,
many of these corporations use other custom communication vehicles, such as websites,
videos and in-house television networks, to reach the same audiences. But while almost
all custom publications were produced in-house by corporations a couple decades ago,
about one in 13 custom publications were outsourced in 2001. According to McMurry,
this trend is accelerating, which offers B2B publishers a growing opportunity to either
launch or expand custom publishing operations.

“Although it appears that a majority of the custom magazines published today are on the
consumer side, my sense is that B2B publishers tend to be closer to and more
knowledgeable of their markets,” Caldwell said. “This could give them an edge as they
forge into custom publishing.”

The edge Caldwell mentioned can take many forms, which will be discussed in later
sections of this paper. The key is to keep your eyes open and don’t limit yourself to one
contact, division or subsidiary at a given advertiser or non-advertiser client when seeking
new business opportunities.

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Custom Publishing: Opportunities Abound For B2B Publishers

In an age when customers rely on different forms of media to help them perform their
jobs effectively, it is important to integrate messages across multiple media platforms.
Doing so has essentially become the "holy grail" of B2B marketing. For many
companies, this is possible through custom publishing that can provide an effective
platform to achieve the following objectives:

• Gain third-party credibility

• Rise above noise levels
• Manage editorial content
• Choose who receives the magazine
• Provide original content for your site
• Educate your sales team, your clients and your prospects
• Maximize marketing dollars across multiple media platforms

“For the publisher, custom publishing is not just a great way to create new revenue
streams, it’s a great way to get close to your clients and your potential clients,” noted
John Blatnik, vice president of business development at custom publisher Putman Media.
“Accountability and trust have become very important factors within corporations in
recent years. They want to work with firms that are familiar with their needs and wants.”

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Custom Publishing: Opportunities Abound For B2B Publishers

Size, Structure & Growth of the Industry

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Custom Publishing: Opportunities Abound For B2B Publishers

Size, Structure & Growth of the Industry

Spurred by a number of trends that will be discussed in the next section, spending on
custom publishing over the past 10 years has grown at exponential rates, although growth
cooled off in 2001. But even though spending contracted in 2001, experts see the
slowdown as a temporary respite, and the available data support that theory.

Total spending on custom publishing by U.S. corporations reached approximately $20

billion in 2001, roughly half the combined advertising and circulation expenditures on
traditional B2B and consumer magazines for the year. Corporations spent about $14
billion of that total on the production of custom publications, while the other $6 billion
was spent on distribution, according to Publications Management. Of the $14 billion
spent on the production of custom publications, only $1 billion went into the pockets of
publishers. This data, again, points to the enormous opportunity that exists for B2B
publishers to expand or create new custom publishing revenue streams. In addition to the
$20 billion spent on producing and distributing custom publications in 2001, the Custom
Publishing Council estimates that another $700 million was spent on advertising in these
publications during the year.

While total spending on custom publications declined 18.8% in 2001, these publications
commanded a larger share of the advertising and marketing budgets at corporations.
Custom publications accounted for 13% of the advertising and marketing budgets at
corporations in 2001, up from 11% the previous year, according to Publications
Management. This data indicates that although spending on custom publishing declined
in 2001, it didn’t decline as fast as corporate expenditures on magazine advertising.
Spending on custom publications surged 34.4% in 2000.

Despite the slowdown in 2001, roughly 40% of the companies surveyed by Publications
Management reported that they plan to increase spending on custom publishing in 2002.
Meanwhile, many of these same corporations have significantly reduced their magazine
advertising expenditures for the second consecutive year. The average corporation spent
$500,000 on custom publishing in 2001, and hundreds of new companies began custom
communication programs during the year.

“The reported increase in custom publishing expenditures for 2002 contrasts sharply with
previous recessionary periods, when spending on custom projects was the first to get
slashed,” McMurry said. “The new trend appears to be that the more difficult the
economic climate, the more likely companies are to spend money on tailored marketing
vehicles, which allow them to control the content and the environment of their
messages.”

About half of all expenditures on custom publishing in 2001 came from the combined
healthcare, technology and finance sectors, with healthcare poised to significantly
outpace the other two in 2002. McMurry estimates that there are at least 50,000 custom
publications produced each year, and that the average publication is a quarterly magazine
that grosses $478,000 annually. The fastest-growing type of custom marketing tool is the

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Custom Publishing: Opportunities Abound For B2B Publishers

e-publication, which accounted for 17% of all custom vehicles in 2001, compared with
3% in 1999, according to Publications Management. Newsletters are the largest
category, accounting for 53% of all custom publications in 2001, although that was down
from 63% in 1999. Custom magazines comprised 24% of the market, a fairly stable
share over the two-year period, while tabloids accounted for 6%, down from 11% in
1999.

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Custom Publishing: Opportunities Abound For B2B Publishers

Major Trends & Drivers in the Industry

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Custom Publishing: Opportunities Abound For B2B Publishers

Major Trends & Drivers in the Industry

The growth of custom publishing is being driven by many factors, both primary and
secondary. These factors are impacting custom publishing on both the client and
publisher side of the business.

Perhaps the driver with the most impact on both sides of the business is the growing use
of various customer relationship management (CRM) tools to build loyalty among
current clients. These tools, such as Internet and telephone response systems that feed
customer information into databases, have revolutionized marketing techniques
throughout American industry. These technological advances have made it much easier
for corporations to pinpoint customer characteristics and buying habits, as well as to
interface disparate information to formulate more effective marketing strategies.

While customer retention has always been a primary goal of custom publishing, in more
recent years new technologies have allowed corporations and publishers to use the tactic
to generate new business. For corporate, traditional and independent custom publishers,
new technology can be used to better target potential clients at the corporate level and at
the divisional level.

“Whether you know it or not, all of your clients and potential clients are doing custom
publishing in some way,” McMurry said. “The trick is getting in touch with the right
people. Often times, one division of a large company has no idea what another one is
doing. In addition, your contacts at a company may not be the same ones involved in
custom publishing. So, expand beyond your current contacts and you’ll increase your
chances for success.”

In addition to the emergence of CRM tools, there is a growing desire among U.S.
corporations to communicate their messages directly with customers and to control the
environment through which those messages are delivered. Custom publications also have
become much more sophisticated in their look and content, as publishers strive to provide
relevant and actionable information to the target audience, while avoiding
communicating in ways that are overtly promotional.

Corporations are outsourcing custom publishing activities at a growing rate, which is

fueling the growth of both independent and traditional custom publishers. As mentioned
previously, only about 8% of corporate custom publishing is outsourced, but that
percentage has grown steadily as the sophistication and quality of custom publications
improves. And this trend is likely to continue.

“There is a lot of opportunity for custom publishers in both the B2B and B2C markets,”
noted Carroll Dowden, president of Dowden Health Media. “We got into this business
about 10 years ago, and one thing I’ve found is that this business is often times a function
of your creativity and salesmanship. This isn’t a high-cost entry type of business. You
need to dedicate resources to the effort, and get to know your clients and potential
clients.”

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Custom Publishing: Opportunities Abound For B2B Publishers

These trends, according to industry experts, point to a huge opportunity for B2B
publishers because they already employ a controlled circulation model, and they tend to
be closer to their markets than consumer publishers. This has led more B2B publishers to
pursue custom publishing ventures with their advertisers and non-advertisers, although at
a slower pace than their consumer counterparts. Both B2B and consumer publishers,
however, have been more aggressive in pursuing new business over the past two years as
they’ve watched their advertising revenues dwindle and circulation numbers decline.

“We’re reading with more frequency about traditional magazines going off rate card,
cutting rate bases and supplementing paid circulation with controlled copies,” McMurry
said. “Custom publishing is suddenly looking like an innovative approach, where
publishers shift more of the financial burden from consumers to corporate clients, a smart
business practice long since the backbone of custom publishing.”

Custom publishers, and even some traditional magazine executives, expect the lines
between traditional and custom publishing to get even blurrier in the coming years, as
convergence begins to break down the walls between church (editorial) and state (sales).
While there are some custom publications sold on U.S. newsstands, convergence on a
monumental scale is already well under way in the U.K. Seven out of 10 magazines on
the newsstand in the U.K. are considered to be custom publications, or “customer
publications” as they’re referred to in that country, according to the Custom Publishing
Council.

Hammock estimated that the U.S. is about 10 years behind the U.K. in custom
publishing, due to a more mature English market there, as well as wider acceptance of the
practice on the part of publishers and consumers. “Custom publishing has been more
organized for a longer time over there,” said McMurry. “They’ve had a trade
organization priming the pump for many more years than we have.”

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Why Custom Publish?

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Custom Publishing: Opportunities Abound For B2B Publishers

Why Custom Publish?

Besides the rising corporate demand for custom publishing and the growth opportunities
that trend offers B2B publishers, there are a number of other reasons why both publishers
and advertisers should look closely at custom publishing.

The reason most often cited is to form strong customer loyalty through the establishment
of trust and credibility. This goes for publishers and advertisers alike. “Custom
publishing is all about customer relationship management,” said Diana Pohly, president
of custom publisher Pohly & Partners. “Trust and credibility are probably the most
important attributes in building brand loyalty and making purchases.” And magazines
rate high in that respect with consumers. According to a recent survey by Applied
Research and Consulting, magazines deliver attributes customers want most in a brand,
including trustworthiness and personalized attention.

For the B2B publisher, custom publishing can also provide a competitive edge, given the
amount of untapped business there is in the marketplace. It could become a necessity in
the coming years, as advertisers search for innovative ways to market their wares and
look to B2B publishers for custom publishing ideas. The average corporation in the U.K.
now spends 25% of its advertising and marketing budget on custom publishing,
according to Publications Management.

In addition to customer retention, recent surveys suggest two other selling points that
B2B publishers can use in their pursuit of new custom publishing business. First,
advertisers view magazines are superior to television, newspapers and radio in
communicating marketing messages to special-interest targets and building brand
awareness, according to a survey by the Magazine Publishers Association. Second, the
more money companies spend on magazine advertising, the more effective their
advertising in other media becomes, a survey by Television Awareness found.

But perhaps the most compelling reason to custom publish is the control these
publications offer marketers. The ability to control every aspect of the publication, from
the look and message to the frequency and target, is a driving force in this business that
becomes even stronger when the aforementioned survey data is taken into account.

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Custom Publishing Best Practices

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Custom Publishing: Opportunities Abound For B2B Publishers

Custom Publishing Best Practices

Outlined below is a list of best practices that were gleaned from a poll of leading custom
publishing experts and executives. While some of these practices may be more important
than others, they are not listed in any particular order.

The Do’s

1. Sell the client on the idea of custom publishing, then position your company as the
go-to firm when they’re ready to launch. “The choice to launch a custom publishing
project is really the client’s. So, you want to sell them first on the idea of doing custom
publishing,” Pohly said. “Then you want to sell them on using your firm to do the project.
Hopefully, that will put you in the pole position when the client’s ready to move.”

2. Try to get long-term deals. The best way to build a custom publishing venture is to
sign multiple-year deals with clients. “This is very important. You want to shoot for at
least a two-to four-year window,” said McMurry. “This will give you time to seek out
other clients.”

3. Offer to develop a business plan up front and charge a fee for this service. Several
custom publishers reported they have had potential clients who took months to make the
decision they really didn’t want to custom publish. Waiting that long is time-consuming,
costly, and can siphon resources away from pursuing other prospects. Make sure a time
line is in your business plan.

4. Establish expectations up front and develop measurement tools to ensure they are
met. Almost every publisher interviewed for this article mentioned this as a best
practice. “You can’t deliver on expectations if you don’t know what they are up front,”
said LeDonna Buschmann, director of custom publishing at Primedia’s business-to-
business group. “And if you don’t have measurements, how are you going to know
whether the project was successful or not?”

5. Agree on pricing before work begins. In addition to establishing expectations,

measurements and pricing, custom publishers should also determine whether they have
the staff in place to do the job agreed upon. These practices are all important because
contingencies will arise during the course of an engagement and you want to be prepared.

6. Institute a regular review process. The practice of meeting with a client weekly,
monthly or at some other predetermined intervals will ensure that expectations are being
met and that measurements are effective. It will also provide regular contact with the
client throughout the process.

7. Always assign an account manager as the primary contact on any project. Ideally,
you want this person to have a strong marketing background and a good understanding of
custom publishing. “Client service and marketing expertise gives you an edge in this
business,” Caldwell noted.

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8. Alert the customer that if they go with the syndicated option over the single-
sponsor model, they will lose full creative control. As explained previously, a
syndicated custom publication means there’s more than one sponsor or advertiser, which
often means the creative direction, as well as the cost, will be shared in some way by the
participants.

9. Advise your editorial team that the customer has full control over every aspect of
a custom publication. This is important because editors are used to a separation of
church and state. In a custom publishing project, the editorial, many times, is an
extension of the advertising.

10. Be as flexible as possible. Remember, in custom publishing the customer is King.

Do your best to accommodate their demands.

The Don’ts

Outlined below is a list of practices to avoid when custom publishing, which were also
culled from a poll of industry experts. Again, they are not listed in any particular order.

1. Don’t assume custom publishing is an easy sell, even to a good client. Custom
publishing typically includes a slower sales process, longer lead times and unusual
production schedules. “But don’t be deterred by this because there is a lot of opportunity
out there. Whether you know it or not, all of your clients are custom publishing in some
way,” McMurry said.

2. Don’t limit your custom publishing business to current clients. Industry experts
urge publishers to expand their universe of clients as much as possible. Even within a
current client’s firm there may be a key decision maker in another part of the company
that you were unaware of. Do your due diligence.

3. Don’t promise you can do a custom publishing program at no out-of-pocket cost

to the client. This is a common mistake, according to the experts. “The better option is
to convince your prospects to fund a custom publishing program 100%,” McMurry noted.
“This is the harder initial sell, but it will pay off in the long run. And it solves the
problem of dealing with an advertising shortfall to cover costs.”

4. Don’t be afraid to charge a premium price for the value delivered. Custom
publishing allows your client to tailor an effective marketing tool to a targeted audience
in order to increase sales. The process of creating a custom publication is different and
more time-intensive than developing a traditional magazine. Therefore, it’s important
that you sell the value you are delivering, while making sure you’re prepared to cover
contingencies as they arise. “You always have to prove the value of your program,”
Blatnik said. “Realize that you will be working on that from the beginning to the end.”

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Custom Publishing Case Studies

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When a client and a custom publisher’s expectations are clearly identified at the
beginning of a project and these guidelines are followed throughout, successful
publications are produced. The following case studies are good examples of custom
publications that have been profitable for the publisher as well as meeting the business
objectives of the client.

Medium Magazine
Publisher Hammock Publishing
Contact Rex Hammock
e-mail rhammock@hammock.com

About 10 years ago, Hammock Publications was called upon to revamp a custom title in
the trucking industry. For more than 40 years, Pure Oil Company had been distributing
the magazine to truck drivers as they passed through their truck stops. The title, Road
King, was a digest sized magazine with 6 issues a year. It carried very little advertising,
but it targeted truck drivers and was viewed by Travel Centers of America (the current
corporate brand) as a marketing tool. The objective of the publication was to get drivers
to come by the stops more often, stay longer and purchase more goods and services. At
the same time, they wanted to create something the driver would enjoy reading and
receiving.

Hammock assumed the role of the readers’ advocate and searched for an un-served
editorial niche that would be of value. Ultimately, Hammock was able to create a
product far more in touch with the trucker, which ultimately encouraged them to come
into the truck stops more often.

On the business side of this project, Road King enabled Travel Centers of America to
measure the fuel purchases from their affinity club members. The Road King title was
the first measured “pick up rate” custom publication, in addition to the traditionally
audited circulation. In the end, the publication’s “pick-up rate” grew and its measurable
affinity club fuel purchases have surpassed objectives.

Medium Custom Electronic Newsletter

Publisher Advanstar
Contact John Payne
Phone/e-mail jpayne@advanstar.com

While Advanstar has generated dozens of custom print projects over the years, producing
a custom e-newsletter was a new idea for them. It all started at a client/agency meeting,
where Advanstar offered-up the idea of producing custom e-newsletters. The
communications director and account supervisor had just come from a 3-day marketing
symposium regarding online marketing and were very interested in developing e-
newsletters for their three primary markets. Since Advanstar’s publications covered the
target markets and had active Web sites, they were uniquely positioned to meet the
client’s needs. At that time, one publication was already producing a weekly e-

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newsletter. If Advanstar could produce a regular e-newsletter, it seemed logical we could

produce a custom newsletter.

Within two weeks the publisher had developed a prototype e-newsletter and micro site
for the client/agency to view. They delivered a basic outline of what we should do, what
they needed to do and came up with a schedule. This helped Advanstar focus on their
expectations and gave an idea of the resources it would take to deliver this each month.
The time it would take to produce this project was the key to pricing it.

After looking at different scenarios, Advanstar wound up charging the client a flat fee to
develop the "architecture" for the project, a simple text based e-mail with story leads and
links to the site that contained the newsletter. When one clicked on the link it lead them
to the e-newsletter. Advanstar built this to fit all three newsletters.

Advanstar provides delivery stats within 24 hours to the client and detailed reports once a
month for all newsletters. This gives the client and agency a clear picture of what took
place.

From Advanstar ‘s perspective, the keys to getting into the custom e-newsletter business
are:

1. Having a talented Web content/technology person on staff. This person is our point
person and our most valuable player. This person develops content, works with the
client and delivers monthly reports.
2. Having a cooperative and flexible IT/internet team. Advanstar relied on them to
develop the "architecture" for this project and work with us every step of the way to
ensure we delivered what we promised our customer.
3. Having a cooperative magazine editorial team. They are key in content development.
4. Having a patient and cooperative client. Given this new medium, they need to be part
of the process, especially working with us to meet deadlines.
5. Having a good e-mail database. The greatest content can only get you so far.
Developing and maintaining an up-to-date e-mail list is key.
6. Having a contract that spells out everything.

Like most successful custom print projects, content is critical. If you have good content,
you'll get good results. Poor content gets deleted and the chances of getting that reader
back are limited.

How is Advanstar doing? They just renewed their contract with this client for another
year.

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Medium Catalog/product guide

Publisher Primedia
Contact LaDonna Buschmann
Phone/e-mail LBuschmann@primediabusiness.com

PRIMEDIA’s custom publishing division recently created a catalog/product for a

technology advertiser, Leitch Technologies. This product was modeled after the old
Sears’ catalogs where one side was advertising one thing and when the publication was
turned over something entirely different appeared on the flipped pages. This guide was
produced as a special buying guide twice a year. In terms of printing and postage rates,
this guide was exceptionally efficient as it was ultimately joined at the spine of the
existing catalog. Not only was the out-of-pocket cost for this approach substantially less
for the publisher than something mailed out on its own, but its shelf life was longer as
well.

Broadcast Engineering, the 44-year-old business-to-business magazine owned by

Primedia Business Magazines & Media, is the must-read among engineers and
management for the latest technological information in the television industry. The key
trade show serving the television industry is the National Association of Broadcaster's
Show and in 2002 Primedia Business sales reps focused a sales effort specifically toward
clients exhibiting at the NAB to run their product brochures in Broadcast Engineering
magazine.

The pitch paid off, with Leitch Technology Inc. running a 164-page product guide on the
backside of the June 2002 magazine, coinciding with the NAB show coverage. The
creative twist to the project is that to get to the Leitch product guide, all you have to do is
flip the Broadcast Engineering issue over and turn it upside down. The product guide is
bound to Broadcast Engineering. There was also a 15,000 overrun and an online
component to round out the package, which was funded by collateral
budget, not advertising budget.

The customer delivered the finished product guide on disk, and the sales rep made sure to
allow extra time to coordinate the project with production. The client was very pleased to
reach Broadcast Engineering's key decision-making readers in the same issue with the
publications editorial coverage of the NAB show. The product guide will enjoy a long
shelf life as well as a strong association with the leading publication in the industry.

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Custom Publishing: Opportunities Abound For B2B Publishers

Medium Service Catalog

Publisher Farm Progress Publishing Services
Contact Dave Wilson
Phone/e-mail Dwilson@farmprogress.com

Farm Progress entered into the custom publishing business in 1992. It was a natural
extension of our marketing services division that offers database management and list
services. The publishing resources were already present internally within Farm Progress
owned state and regional farm publications.

Case IH was Farm Progress’s first client. Farm Progress produced a quarterly parts and
service catalog that featured a “magalog” approach. Farm Progress brought editorial
services into the mix to position the Case IH dealer as the “expert” in offering parts and
service advice for maintaining farm equipment.

In 1994, the National FFA (Future Farmers of America) Organization approached Farm
Progress on publishing their member magazine. FFA is a non-profit organization that
focuses on the development and growth of agricultural curriculums, primarily at the high
school level throughout the U.S. Current membership is 470,000 and growing each year.
There are currently over 7,000 schools (called “chapters”) that participate in the FFA
programs in the country.

When Farm Progress was awarded the business, it was the first time in over 65 years of
existence that FFA took the project out-of-house. The publication was given a huge face
lift in redesigning the graphics to appeal to a teenage audience. Bright colors, more sub-
headings to better draw the readers into the articles and fun departments were among
some of the changes that occurred. Farm Progress also repositioned the magazine as a
member benefit publication as opposed to an association magazine. Many of the FFA
state associations have 8 to 16 page “versions” that are locally focused editorially. Farm
Progress manufactures these inserts for the states and selectively inserts the sections into
the appropriate state copies.

It was a complete turnkey assignment. Farm Progress also sells all of the advertising for
the publication in a revenue sharing arrangement. It has been a rewarding project for
Farm Progress and their relationship with FFA is stronger than ever today.

Farm Progress currently has twelve custom publishing clients where the scope of the
relationships ranges anywhere from a turnkey service to editorial to printing services. In
many cases, Farm Progress offers a more cost-effective solution in distribution by
inserting the piece into our state and regional magazines. Others prefer stand-alone
products. Custom publishing is not a “one shoe fits all” service. Every client has their
own unique approach to marketing their products and services and corporate culture also
comes into the mix.

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Custom Publishing: Opportunities Abound For B2B Publishers

Medium Pre-show newspapers

Publisher Allured Publishing
Contact Nancy Allured
Phone/e-mail nallured@ALLURED.COM

Allured publishes pre-show Newspapers for trade show organizers. Some trade shows in
the industry are trying to increase their attendance so Allured offers a pre-show
newspaper service. Allured produces and sells the content for a pre-show newspaper and
the show organizer generates free publicity and increased visibility without any effort.
They provide the logos, a letter from the show organizer, and the list of exhibitors,
schedule of events, logistics, etc. Allured fills in the rest. This provides the magazine
with increased revenues and the show organizer with increased status and attendance.

The benefits to the publication are increased revenues and status of being associated with
leading shows. Once you do one, the process is duplicated to add additional shows to
create better efficiencies and greater revenues.

Allured also creates tradeshow newspapers under their custom publishing umbrella.
Allured Publishing produces two newspapers a year for industry tradeshows. They put
together a pre-show newspaper for the industry to inform them about the up-coming
show. They do this with the tradeshow owner and take all the financial risk, developing
the content, selling advertising and mailing six weeks prior to the tradeshow. In 2003
Allured is hoping to expand this to a third show newspaper.

Medium Integrated media

Publisher Putman Media
Contact John Blatnik
Phone/e-mail jblatnik@putman.net

Putman creates media services and solutions that make a difference to customers and the
communities served. Putman content developers (editors) guide users of our magazines
and web sites to better decisions—decisions which help them run their businesses more
profitably and safely. Our account executives and publishers work with our customers to
create unique and integrated media solutions that aggressively build brand equity.

With eight core magazine properties, a vast array of newsletters, annuals, conferences,
Web products and an extensive custom publishing business, Putman Media is a leader in
providing integrated solutions for B2B marketers. One example is A-B Journal for
Rockwell Automation. This 5-times a year publication targets Rockwell Automation
customers, prospects and partners who are primarily engineers and technicians working
within or for manufacturing companies.

The client’s objectives were to be an independent voice that acts as a bridge spanning the
communication needs of Rockwell Automation (and its partners) on one side and the
information needs of readers (proven or potential customers of Rockwell Automation) on

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Custom Publishing: Opportunities Abound For B2B Publishers

the other. The primary goal was to create useful and interesting publications and Web
sites that demonstrate technical solutions for end users and OEMs covering technologies
and products including: PLCs, I/O modules, communications networks, sensors, interface
devices, scanners, machine vision systems, CNCs, logic components, industrial
computers and software.

In terms of results, Putman Media conducts a yearly readership survey for A-B Journal.
This year’s survey was e-mailed to 8,945 names from the subscriber list of A-B Journal
and 989 responses were received. Some of the findings were that:
• Ninety percent reported using it to learn about new equipment and 20% to justify
the purchase of new equipment.
• Ninety seven percent of respondents have a good to excellent impression of A-B
Journal.
• Six of ten respondents spend half an hour or more reading a typical issue of
• A-B Journal.
• 2.5 persons, including the subscriber read the average copy of A-B Journal.

Another project was Demand Solutions, a semi-annual produced for Demand

Management. The target for this magazine is to reach Demand Management’s customer
base, primarily line-of-business manufacturing management involved with planning and
scheduling. In addition, Demand Management reaches potential customers through
mailing to Alchemy Magazine readers. Its objectives were to showcase Demand
Management’s products and services to the target audience by executing a 24-page, 4-
color magazine

Readership survey results sent out with the premier issue of Demand Solutions brought
back positive results:
• Eighty six percent of respondents rated it good to excellent.
• Of those who remembered seeing the premier issue, 45% began reading it, 30%
glanced through it and 35% read the entire insert.
• Close to 50% of respondents said they read the entire magazine.

Medium Directories
Publisher Media Ventures, Inc
Contact David Persson
e-mail dpersson@mediaventuresinc.com

Media Ventures, Inc., a Norwalk, Ct. based custom publisher, came into being in 1985
following the breakup of AT&T into the regional Baby Bells. MVI helped the telcos and
independent directory publishers realize that, to be market specific competitive, they
needed to add additional features or enhancements to their telephone directories in order
to drive up usage. MVI started with one client and has grown to be the largest
independent publisher/supplier of directory enhancements. These include: maps,
community pages, specialized sections (i.e. healthcare guides), restaurant guides, etc.

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Custom Publishing: Opportunities Abound For B2B Publishers

This year, MVI will produce over 15,000 pages of telephone directory enhancements
alone.

Realizing that growth in the directory business was limited, MVI, over the past several
years, has branched out to produce community guides, maps, and directories for
chambers of commerce, national realtors and travel and tourism authorities. In addition,
MVI produces industry specific annuals and publications, and a high profile network of
National Park guides supported by national advertising. They are also currently actively
considering two ventures: regional shopping guides, and, a regional boating publication.
These all, to varying degrees are/will be line extensions of what MVI already does,
leveraging their in-house talent and resources.

MVI now has the capabilities to accomplish all aspects of a custom publishing
opportunity: ad sales, editorial (writing through fact checking), graphic design,
production, printing, and, distribution.

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Custom Publishing: Opportunities Abound For B2B Publishers

Sources & Contact Information

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Custom Publishing: Opportunities Abound For B2B Publishers

Overview of The Publishing & Media Group

The Publishing & Media Group (P&MG) is a full-service strategic and process design
consulting firm that delivers innovative solutions in all dimensions of printed, electronic
and digital media with particular focus on consumer magazines and business
publications. The firm was founded by Dan McNamee in 1979 and is based in New York
City.

P&MG is distinguished by its professional staff, all of whom gained significant

experience in the media industry prior to becoming consultants. The engagements
P&MG conducts for its clients span virtually all media and address key strategic and
operational issues facing today’s media companies.

For more information on P&MG, contact Ed Padin at 212-897-3150.

Sources & Contact Information

John Caldwell Pohly & Partners

Custom Publishing Consultant 27 Melcher Street
115 Atlantic Avenue 2nd Floor
Marblehead, MA 01945 Boston, MA 02210
781-639-9665 617-451-1700
www.pohlypartners.com
Dowden Health Media
110 Summit Avenue PRIMEDIA Business Magazines & Media
Montvale, NJ 07645 7900 International Way, Suite 300
201-391-9100 Minneapolis, MN 55425
www.dowdenhealth.com lbuschmann@primediabusiness.com

Hammock Publishing, Inc. Putman Media, Inc.

3322 West End Avenue 555 W. Pierce Road
Suite 700 Suite 301
Nashville, TN 37203 Itsaca, IL 60143
615-690-3456 630-497-1300
www.hammock.com www.putman.net

McMurry Publishing
1010 E. Missouri Avenue
Phoenix, AZ 85014
602-395-5853
888-McMurry
www.mcmurry.com

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