The fluctuation in raw numbers and services for fulfillment bureaus is minimal from year-to-year—2015’s services are nearly identical to 2014’s, in fact—but gradual erosion and consolidation compound over time. A rapidly-changing consumer marketplace means that some companies have been left behind, while others have grown in their absence.
At the most basic level, the number of respondents to FOLIO:’s annual fulfillment bureau survey has dropped substantially. The survey had 32 participants in 2010 and has just 21 this year. The number of total records those vendors service has barely changed though, and the number of titles they manage is actually up more than 20 percent over that same span.
While the survey has never been intended to capture 100 percent of the industry, it offers a reliable snapshot into its evolution. And it’s showing that the companies who’ve survived have swallowed up a lot of business.
The numbers bear it out—fulfillment bureaus are bigger by almost every measure. On average, they service 60 percent more magazines, manage 5.5 million more total records and have 15-percent larger staffs.
However, even with those bigger client rosters, the menu of services offered by fulfillment companies hasn’t changed all that much since 2010. Those services have gotten faster, more accurate and more complex now though. And they apply to a wider range of products and access points than they did five years ago. They’re also often coupled with one another or with third-party products. Moreover, offerings like digital edition delivery may have been standard in 2010, as they are now, but the deliverables have changed.
*Click to enlarge charts
Since 2010, the universe served by fulfillment companies has gotten larger by some measures and stayed similar in size by others. Providers have 22 percent more titles under their purview now, for example, though they have almost exactly the same number of total records.
Meanwhile, the number of fulfillment companies out there has been shrinking, leaving fewer providers for the same amount of business. Consequently, bureaus have become larger than they were just five years ago.
A typical fulfillment provider in 2010 would have serviced 144 titles and 9 million records—now, they’re responsible for 297 titles with more than 14.5 million records. Their staffs have also ballooned from 161 employees to 185.
A similar pattern emerges when we isolate the 21 companies who participated in the 2010 survey and are still around now. They have 53 percent more titles and 23 percent more records,.
Consolidation is the obvious root cause for much of that growth, but fulfillment providers have also been aggressively diversifying their respective client bases. Non-magazine titles made up just a quarter of their business in 2010—now, they account for 40 percent of titles managed.
Within magazines though, fulfillment providers have seen growth in paid circulation far exceed that of controlled circ. Average paid titles and records managed are each up 73 percent, compared to increases of 29 percent and 32 percent, respectively, for controlled circulation.
As always, speed and reliability of reporting are top of mind for fulfillment providers and their publisher clients. Publishers want real-time access to the purchasing, registration and usage data coming in, so they can tailor offerings accordingly. And, of course, they want that data to be precise.
That data is coming in more forms and from more sources than ever before though—often from a patchwork of vendors, each specializing in just one of a publisher’s growing list of needs. As such, fulfillment companies have to accommodate these third-party sources.
“We’re seeing more requests for seamless, automated integration with other third-party specialists managing specific aspects of the publisher’s business,” says Nancy White, director of sales for Strategic Fulfillment. “[We’ve] developed scores of integrations that provide authentication for digital editions and timed access to websites, provide real-time data to email service providers or other-third party vendors. This integration has also led to our clients asking us to be the database of record for information, customer history, preferences and behavior gathered from other sources.”
Bill Coffman, business development officer, for Publishers Data Management Group, says he’s seeing similar challenges. Like White, Coffman’s company is pursuing partnerships directly with the third-party vendors to facilitate the transfer of data for their mutual clients.
“Virtually all of our special interest publications are involved in new digital products, e-commerce, video streaming, etc.,” he says. “Our approach to helping our clients is to ‘partner’ with the suppliers that best suit our customers and find a way to integrate with these vendors and thus achieve maximum benefit to our mutual customers.”
How Publishers Feel About Fulfillment
This year, FOLIO: has added a client-side element to its annual fulfillment service bureau survey. We heard what more than 150 publishers are thinking when it comes to their company’s fulfillment needs.
While fulfillment has been slower to adapt to the changing habits of consumers, publishers haven’t been shy in picking a new provider that can meet those rapidly-changing needs—a third have switched vendors in the last three years and another quarter say they’re currently shopping around.
Aside from a reasonable price, publishers are looking at attentiveness and flexibility from their fulfillment providers. As non-traditional subscription models and other services related to marketing and sales proliferate, it’s become more important for vendors to maintain a close relationship with their clients. Other publishers are simply turning to new providers, in addition to their existing ones, for those supplementary services.
Overall, it seems most providers are keeping their publisher clients happy, but it’s not an overwhelming majority with two in five respondents reporting they’re dissatisfied.
While half of respondents’ companies have been with their fulfillment provider for at least six years, nearly a quarter of respondents’ companies may be shopping for a new solution.
Change has already been the norm, to an extent. More than a third of the publishers we heard from have switched their provider at some point in the last three years.
Consumer publishers have accounted for more of that churn than their B2B or association counterparts. Nearly 45 percent of respondents from consumer publishers say that they’ve changed fulfillment service recently. Meanwhile, just 27 percent of B2B and association publishers have made a switch.
Across all segments, almost 25 percent of survey respondents say they’re currently in the market for a new fulfillment solution.
Interestingly, close to half of the publishers that had switched their vendor 1-3 years ago are now looking for a new provider. Those who have changed recently and those who have been with their current vendor for more than six years had the same rates of attrition.
What Matters Most?
Not surprisingly, it comes down to the bottom line. Cost effectiveness is the single most important factor in selecting a fulfillment vendor for respondents to the survey.
Customer service and vendor support were close seconds however, signaling that raw tools and capabilities may matter less than ease of use. It also speaks to the growing number of publishers that need customized solutions. Responsiveness and flexibility on the part of fulfillment providers can play a big role in getting those custom builds off the ground.
Technology ranked fourth, followed up by vendor stability and satisfaction with system requirements.
Single Vendor Vs. Multiple Solutions
Overall, publishers are split about 60-40 when it comes to using a single provider for all fulfillment and customer data needs, or using a variety of them, but there’s a stark difference between the segments.
B2B media companies commonly offer a wide range of products and services to their audiences that can include bespoke data products and a variety of experiential offerings. Purchase, registration and lead-capture methods—as well as the back-end capabilities to tie all that fragmented data together—mean that B2B publishers are more likely to require multiple solutions. About half the trade media respondents say their companies use more than one fulfillment provider.
Meanwhile, consumer (64 percent) and association (80 percent) publishers are heavily skewed toward only needing one solution for their offerings.
Significant differences in the number of vendors used also appears when looking at how long relationships have lasted. Companies that have entered into partnerships with fulfillment providers within the last three years were far more likely to have a single service meet all their needs. Those who have been in longer-term relationships with their primary fulfillment provider tended to have supplementary services provided by additional third parties.
A significant number of respondens—about half—are experimenting with using some sort of non-traditional subscription model, like tiered subscriptions, membership plans or bundling. That means fulfillment providers have to be able to adapt to a wider variety of purchase options and access points for consumers.
Again, differences between segments arise. Consumer publishers are more aggressive in implementing non-traditional models, with two-thirds of respondents from those companies saying they’re exploring alternative subscriptions.
B2B and association publishers are being more conservative in their approaches here though. Less than half of the respondents from those segments say their companies are looking to move beyond traditional subscriptions.
This experimentation might be a key factor in why companies are looking for new fulfillment providers. Two-thirds of publishers that have switched providers within the last 12 months are employing non-traditional subscriptions.
Publishers are also looking for non-traditional services outside the realm of subscriptions. Here as well, consumer publishers are pushing the envelope with a willingness to explore ecommerce (59 percent), email marketing (56 percent) and other digital marketing solutions (30 percent).
Respondents from B2B publishers aren’t as far behind their consumer counterparts here though. Large swaths of the B2B segment have been willing to look into email marketing (64 percent) and audience data tracking (55 percent). Associations remain the most conservative though, with few trying any non-traditional services.
While most publishers report some level of satisfaction with their fulfillment vendor’s technology and reporting capabilities, nearly 40 percent of the industry is left wanting more.
B2B companies tended to express the highest levels of dissatisfaction, though the difference between the segments is slight.
Not surprisingly, the satisfaction and length of time with a provider were positively correlated. Two-thirds of publishers that have been with their current fulfillment service for six or more years reported being satisfied with them, including 20 percent who say they’re “very satisfied.”
Newer relationships tended to be rockier—respondents that have switched fulfillment vendors within the last 12 months are split evenly on whether they’re satisfied or dissatisfied with their new partner.