2009 Fulfillment Service Bureau Survey

Responses this year indicate an upward trend in overall business, while the bureaus set their sites on the call for ‘customer-centric’ operations.

By AD Staff
Thursday, January 15, 2009

Last year, we opened the survey analysis by noting that the Palm Coast and Kable merger triggered a rather large movement of titles between bureaus. Well, once again this year, PCD initiated another contraction, officially merging the Kable brand into Palm Coast and moving operations down to Florida. Yet it’s not necessarily as much of a sea change this time around. More significantly, however, survey responses indicate an upward trend in overall fulfillment business.

As part of this year’s survey, we asked the bureaus how they are strategically preparing for 2009. We’ve seen over the last couple years a steady build-up of digitally-focused product offerings from publishers, and fulfillment companies have been building out their services to keep the pace. Now, however, things have come to a head. This year, fulfillment bureaus are answering the call from publishers to build services that accommodate “customer-centric” operations—supporting the concept of anywhere, anytime and in any format.

And this year, we’re pleased to welcome a new company to the list, the Portland, Maine-based Oyster Group.

Click on the image below to view the fulfillment survey charts.

Title Density Looking Good

The overall number of titles made a dramatic jump in 2008 after a slight dip in 2007. In fact, this number is the highest it’s been since 2005. In 2008, surveyed fulfillment bureaus claimed a collective 4,857 titles—handily beating 2007’s 4,392, 2006’s 4,428 and 2005’s 4,284.

In 2008, the number of print magazines represented in that total is 3,789, up from 3,674 in 2007. Consequently, non-magazine titles are also up quite significantly from 760 to 1,079 in 2008.

Drilling further down into the print magazine numbers reveals a relatively flat paid title total: 2,719 in 2008 compared to 2,712 in 2007. Yet controlled titles continued their growth, moving from 1,538 in 2007 to 1,628 in 2008.

Total Records Regulating?

Last year, we reported with some shock that total number of records bounced up 34 percent, from 323.8 million in 2006 to “an incredible” 435.1 million in 2007. That number has since dwindled to a slightly less incredible, but still impressive, 404 million (403,976,000 to be exact). Last year, we attributed the 34 percent increase to a noticeable growth in email lists, not to mention the controlled title increase. However, 2008’s numbers also indicate still more growth in email lists being managed by the fulfillment bureaus. Since 2006, the number has grown from 670 to 1,047 in 2007 to 1,340 in 2008. Yet this is even as total controlled records shrank in 2008 to about 121 million from 147 million in 2007.

Staffing Remains Stable

A glitch in the 2007 report incorrectly noted that staffing suffered a significant 35 percent drop from 2006. The report should have stated that staffing saw a slight decline, as it did in 2008. Total, full-time staffing for the 36 companies tallies to 6,209, a slight dip from 2007’s 6,260. However, there is a downward, but slowing, trend. In 2006, the bureaus reported 6,615 full-time staff.

Account reps, however, are on the upswing. In 2008, bureaus reported 588 reps, up from 2007’s 570, but not as high as 2006, when 629 were tallied.

Auditing Support

Last year’s report picked up on a shift in auditing support. The number of BPA audits supported was up by 312 in 2007 over 2006, while the number of supported ABC audits was down by 360. In 2008, that trend reversed. Fulfillment bureaus reported 1,307 BPA audits—down 128—and 680 ABC audits—up by 225, but still not as high as 2006’s 815.

Customer-Oriented Systems At the Top of List

When it comes to strategically preparing for 2009, the keyword for circulators seems to be “customer-centric.” As a result, fulfillment companies are looking to improve and expand the services they offer to publishers that are now operating in a multi-platform environment.

“We embrace a ‘community-based’ publisher that generates revenue from multiple revenue streams, including subscriptions, advertising, products, events and specialty data,” says one fulfillment provider in the verbatims. “To assist these publishers, we incorporate a database approach to allow for multiple tasks to be maintained for customers, not just subscribers.”

More Integrated Databases

When AD asked the companies that participated in this year’s survey to list the new services they’ve launched within the last year or will be launching in 2009, marketing databases appeared high on the list. “Audience development managers and directors want to be able to view customers and see their overall purchase patterns, and you can only do that when you have a customer-oriented system,” Carole Ireland, president, Quality Circulation Services, told AD. “I think many vendors have different ways of accomplishing that, but there are still many systems that just offer flat files.”

One company is releasing a new version of its Web-based, self-serve relational database management system with enhanced functionality in January 2009. “It integrates all data for all touchpoints for all products and platforms for all market spaces served enabling unprecedented monetizing and intelligence to cross-sell, up-sell, and launch new and highly-targeted media and information products,” one company representative says.
Some vendors claim they are ahead of the curve and have been supporting multiplatform environments for years.

“Our relational databases infrastructure has always enabled multi-product transactions and analysis,” one vendor says. “We enhanced this functionality so our clients can get to the data for multi-platform applications as many of them are already providing content across multiple platforms. The technology is in place to facilitate queries, fulfillment, deployment and tracking.”

One company feels that developing the proper tools for this new environment is more of an ongoing process. “Obviously, this is critical due to the ever-changing traditional publishing technology. We see this as a continuous moving target—one that can be quite different from publisher to publisher and, ultimately, the challenge we face is the development of systems that work for everyone, yet is that possible? Weekly, if not more frequently, we review what our clients needs are and, naturally, we feed that to our developers.”

Hervey Evans, head of publishing consultancy firm Erasmus Inc., says that what can prevent fulfillment companies from staying on top of their clients’ needs is the fact that circulators have such a unique and broad set of requirements, plus very little time to figure them out and express them. “[Circulators’] time is precious, but often eaten up by other minute issues,” he told AD. “They rarely have time to look at their long-term marketing needs. When you’re facing certain problems, like rate base pressure, and a fulfillment company comes to you with a service that’s going to cost you more money, you’re not going to give it your full attention.”

Online, Digital Improvements to Continue

It seems, in general, that vendors will continue to improve their online and digital offerings like they did in 2008. Email blasting, Web registration management and product fulfillment, email auto response, digital subscription fulfillment and Web 2.0 capabilities are just a few of the services that companies will be offering in 2009.

“It’s sometimes difficult to find a fulfillment company that offers a wide range of enhanced Web services,” Ireland says. “Most vendors are just doing the very basics, but publishers are looking for more value. For b-to-b titles specifically, there’s going to be a demand from a certain segment for vendors to support site licenses, where a publisher sells a customer a group electronic subscription based on the number of users in the company.”

Evans adds that although vendors are offering more online services, they remain cumbersome. “Fulfillment companies are still using the same print patterns of responsiveness to their customers rather that being as responsive as they can be,” he says. “They need to offer stronger, more capable tools that publishers can use on their own. I’m not sure yet, though, if those tools even exist.” For the time being, however, vendors continue to roll out new services.