CONTRACT PUBLISHING: The Ad Conundrum

Joe Lepper

The quarterly publication, which is produced entirely in-house, now costs £1.4m a year to produce, but as editor Rob Hume proudly points out, this has for the past ten years been entirely offset by selling advertising space. Of its 112 pages, 50 are given over to advertising, with companies paying as much as £11,140 for a full page. Hume says: "A member got in touch recently to complain that we were spending money on this glossy magazine. I was able to tell him that no money is diverted from conservation, and that the magazine pays entirely for itself."

When looking at the magazine's media pack it becomes clearer how the charity's two-strong in-house advertising sales team attracts enough advertising to meet the £372,000 cost of producing each issue . With a circulation of 614,000 it has an estimated readership of around 1.7 million.

Advertisers are further attracted to Birds by the type of reader it attracts: 40 per cent are in the AB bracket and 89 per cent are over 35 years old.

The types of companies that the magazine attracts include holiday and travel firms, binocular manufacturers and clothing companies.

Not all advertising is accepted though. The charity has a blanket ban on oil firms and tobacco manufacturers. In addition, contentious decisions are turned over to an editorial board, which includes senior PR staff.

A firm operating in Burma, for example, would almost certainly be rejected, according to Hume.

One problem that Hume regularly encounters is striking the balance between making money and not offending readers. He says: "A lot of the holiday firms that advertise in Birds are for very expensive trips. Not everyone can afford a £5,000 trip to the Arctic, and that can be seen to exclude a lot of our readers. It's a contradiction that we have to live with."

The charity's corporate PR manager, Bryan Bland, perhaps best sums up the charity's reason for using advertising in his description of it as "a necessary evil".

Advertising is a popular and vital source of income for many charity magazines, yet some choose to keep their pages ad-free. Joe Lepper weighs up the pros and cons.

For charities that allow companies to advertise in their in-house magazines the message is clear and simple - it makes money. In some cases it can be a small but significant way to offset costs, but for the shrewd operators it can create a self-funding service to members.

Not all charity magazines, however, allow advertising, and the feeling from the not-for-profit publishing sector is that they are the ones who are missing out.

Latest figures by marketing analysts Mintel show that third party advertising revenue for the contract publishing sector, including companies, charities, trade groups and local authorities is now worth around £133m a year.

But Hilary Weaver, director of contract publishing trade body the Association of Publishing Agencies, says that only 55 per cent of magazines in all sectors handled by contract publishers are benefiting from the pot of money brought by carrying advertising.

Weaver also believes that charity magazines are increasingly seen as a popular place for advertisers, due to their unique selling point as being ethically sound organisations. "There is an implied endorsement and the expectation from the reader that there is a link - that is very attractive to an advertiser," she said.

The National Trust is one charity that benefits from advertising in its National Trust Magazine to such an extent that currently its entire issue cost, understood to be 25p a copy, is offset by advertising. It is also easy to see the benefits for advertisers when you consider there is a circulation of 1.7 million, and a higher social bracket readership of up to 3 million.

Editor Gaynor Aaltonen says: "We undertook reader research, and the message that came back was that advertising is something that actually adds to the magazine." But mindful of the "huge" cost of producing the magazine she adds: "We need advertising - I don't know how we would do it otherwise."

Despite having a readership to make many mainstream glossies envious, the Trust, like all those in the charity sector, has a number of ethical considerations that restrict who can advertise in the magazine. Aaltonen says: "We are a conservation charity so we couldn't include companies that produced certain types of pesticides, for example."

Those advertisers that do pass the Trust's ethical test include many travel and holiday firms, as well as garden improvement businesses.

Aaltonen adds that in practical terms the charity has found it easier to contract out its advertising sales. It uses Madison Bell to handle the brief. She says: "It would probably be cheaper if we sold ads in-house, but we don't have the expertise and we don't think we could actually do a better job."

Cutting Costs

Many of those who do use advertising, however, have taken another route and either hired their own team, or used existing staff. While a risk, for many it is another way of cutting costs since agencies, according to one senior charity director who declined to be named, are likely to take anything up to a 25 per cent cut of advertising revenue.

The RSPB is one charity that handles advertising in-house, and sells enough to meet the entire cost of the production of its Birds publication (see Case Study). Another is Mencap, which uses advertising to part fund its bi-monthly, 30-page Viewpoint magazine. With a circulation of 7,000, it has carried advertising since its launch eight years ago, and as a result it raises around £10,000 a year to offset the £72,000-a-year production cost. While not on the same scale as the National Trust's operation, Viewpoint is clearly doing something right, as it is the current holder of the magazine section of the Charity and Public Service Publishing Awards. According to Colin Ringrose, managing director of the award's organiser Popcomm, the use of advertising is considered in the judges decision: "It has to be cost efficient, as well as look good," says Ringrose.

While Viewpoint is far from a self funding operation, Mencap's ability to sell advertising space to, among others, the Department for Education and Skills, is still a remarkable achievement, considering all advertising is handled by the magazine's editor Faiza Fareed.

She says: "We find that companies come to us - we've got a niche readership and haven't had any need for in-house staff, although that may be something I will look at one day."

RNID is another advocate of advertising, for its 35,000 circulation, bi-monthly One in Seven magazine. Unlike MENCAP, the charity has decided to invest in outside assistance, with advertising handled by contract publishing firm Centurion Publishing. The charity's director of communications Brian Lamb believes that advertising is a necessity.

While Lamb declines to release figures, it is understood from a source at the charity that the magazine costs around £19,000 per issue, a sum that is almost entirely offset since each issue generates around £17,000 in advertising revenue - even after Centurion's cut, which is understood to be around 20 per cent.

In view of these figures its easy to see why Lamb believes that charities which don't use advertising are "missing out on a major opportunity to generate important and significant revenue".

In terms of who advertises in its pages, the RNID is keen to promote an ethical stance. But there is also a degree of entrepreneurship. One advertiser, for example, is BSkyB, which until a year and a half ago was the target of a vociferous campaign by the charity, objecting to its lack of subtitling on flagship channels such as Sky News. BSkyB has now pledged to increase its use of subtitling, and is in part showing its commitment to the cause by buying advertising space. Lamb says: "We sorted our differences out and I suppose this (advertising relationship) is the result of a better dialogue with RNID."

Different strokes

But advertising might not suit all charities. Weaver says that before making any decision, a charity must carry out research among its readers.

If they don't approve it would be foolish to plough ahead with advertising.

Weaver also says that a number of organisations, not just charities, may not want to risk diluting their message. "Above all," she asks, "will advertising add anything to the product?"

Sally Douglas is marketing manager at Citigate Publishing, which produces the Red Cross's Red Cross Life magazine for members, Prince's Trust's The Business and Scope's Scope News.

She says that advertising is increasing across the board in contract publishing, but many charities are still resistant. With regard to the Red Cross's decision not to carry advertising when it launched four years ago, Douglas says: "In the end, the Red Cross didn't want to be seen to be aligning itself with any other organisation. It was felt that could compromise its independence."

She said that for similar reasons, the Prince's Trust declines to accept advertising. Also, says Douglas, this is because it funds start-ups by young people, and is reluctant to ask them for money or give advertising space to much larger firms.

The Red Cross's head of communications Tim Pemberton says that the charity is no longer averse to the principle of advertising. He also believes that more money might be made from looking at ways that firms can sponsor the publication. "Advertising is not on the agenda, but sponsorship is something we are looking at - this may be having a company's name on the cover, even on every page."

For Peter Denton, principal editor of WWF News, the reason that this quarterly magazine has never carried advertising is because it is believed that readers would not approve. Advertising, says Denton, would detract from the overall look of the product and setting up or hiring an advertising team would be too expensive. He adds that the problems of vetting potential advertisers for ethical reasons would be too great for the charity.

Offsetting costs

This will come as a major disappointment to potential advertisers, especially considering the magazine's readership of 150,000. But it may also one day become a disappointment to members, as there is no advertising revenue to offset the £115,000 annual bill the charity faces in producing the magazine. Denton, though, is resolute. He says: "We review it regularly but there are no plans to have advertising at the moment. We consider it a service to our members."

But like Pemberton at the Red Cross, Denton does accept the need to try and offset the cost in some way. One example is WWF News's reader offer for the Wild Thornberry's DVD, reflecting the charity's corporate partnership with Paramount Home Entertainment.

In local government, those producing some of the best civic newspapers and magazines believe that people such as Denton will eventually have to accept that advertising is vital way to cut costs and enhance a publication.

Stuart Godfrey, communications manager at the London Borough of Greenwich, which this year won the Institute of Public Relations local government group award for best civic newspaper, says: "Charities are missing out. For us it is an excellent way of meeting the costs."

Simon Taylor, director of consultancy TaylorSyms Marketing and PR is former head of communications at the East Riding of Yorkshire County Council, a previous winner of the IPR's magazine award for its East Riding News newspaper.

While at the council, Taylor revamped the monthly newspaper and put more emphasis on using external advertising. He suggests that one day, charities may actually be able to offset costs as well as plough profit back into the organisation. East Riding News currently costs £28,000 an issue to produce, but each issue makes £31,000 in advertising revenue. The £3,000 profit, Taylor points out, has been used to fund other initiatives, such as improvements in internal communications.

He said: "Once the reader research is done, and advertising is seen as something they want, then charities should go for it. It's important to provide services in the most cost-effective way."

CASE STUDY: TRAIDCRAFT

Set up in 1904 under the title Bird Notes and News, the RSPB has allowed advertising in its membership magazine Birds since the 1950s to fund publication.

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