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Custom Publishing Spending Down 20%, More Companies Outsourcing

Expenditures on custom publishing totaled $912,532 per company - that’s down 20% from 2006 and the first decline in five years - despite an increase in the percentage of marketing budgets allocated to custom publishing, up from 24% to 27%, according to a new study.

Released by the Custom Publishing Council (CPC) and Publications Management, the study found that 40% of the companies surveyed said they plan to increase their custom publishing outlay in 2008, while 48% said they will maintain at the same level and 12% said they plan to decrease spending.

The use of external agencies to create custom publications also increased - from 43% in 2006 to 48% in 2007. For companies that outsource, custom publishing companies are their top choice, up to 35% from 23% in 2006, followed by design firms (30%), advertising agencies (28%), other companies (10%) and PR firms (8%).

Spending allocations to e-publications remained relatively flat with 17% of market share (compared with 19% in 2006), while 83% was allocated to print.

Spending by large companies (defined by revenues of over $1 billion) decreased 21% to $1,329,286 per company in 2007; small-company spending decreased 12%, to $863,857 in 2007.

“We’ve had steady spending increases since 2002, so we are expecting that this dip in expenditures is temporary,” said Lori Rosen, executive director of the Custom Publishing Council. “The good news is that more and more companies are not only outsourcing, but they are going first to custom publishing companies. That’s a trend we expect to continue because of the quality of work offered by custom publishing firms.”

Other notable trends found by the CPC/Publications Management survey:

• For-profits increased their spending 6.2%, to an all-time high of $1,116,082 per company; however, nonprofits decreased their spending on custom publishing 33.6%, to slightly less than $800,000, bringing the overall average down this year.

• Of a total custom publishing budget, 42% is spent on production; 38% on personnel; and 20% on distribution. For the first time in four years, spending on distribution decreased.

About the data: This research has been conducted annually by Publications Management for seven years via a mailed survey targeting a random sample of companies across all industries. Among the 200 companies represented were Aetna, Coca-Cola, General Electric, Lockheed Martin, Re/Max International, State Farm Insurance, Sunkist, and VistaCare.