Keep your eyes on the prize

Those 'free' gifts stuck to your magazine aren't free at all. The giveaways cost publishers millions each month. It's a bonanza that's breaking the bank - but they're scared to stop, reports Virginia Matthews

Simon Kippin, publishing director of Glamour magazine, is in a bind. "If I could stop all the gifting tomorrow, I most certainly would," he says. "But many magazines are in a state of warfare, and freebies have become essential ammunition for all of us."

The battlefield extends way beyond the women's market. This year, the three leading men's magazines - FHM, Loaded and Maxim - will spend an estimated £5m on throwaways, giveaways, add-ons and spin-offs, many of which are destined to be ripped off and tipped into the bin within minutes of purchase.

Yet, despite the increasing alarm among magazine executives over the growth in freebies - particularly at a time when some of the titles are suffering serious declines in circulation - the fashion for giveaways has become a publishing merry-go-round that only the hardiest of souls can afford to jump off.

Pre-eminent in the freebies pack is what is known as the "gift with purchase" (GWP) or "cover mount": the glued-on or specially wrapped pair of sunglasses, compilation CD or beach bag that is now ubiquitous in women's and men's glossy monthly magazines. The gifts range from collections of erotic fiction - reasonably inexpensive for a publisher to produce - to more costly items such as sarongs, cosmetics, make-up bags and T-shirts.

Given the big numbers of magazines sold, the little presents from publisher to customer do not come cheap. Ross Thompson, chairman of Giftpoint, which manufactures or sources more than £6m-worth of freebies for UK publishers and marketers each year, has made a career out of the add-ons and is best placed to outline the cost. He says: "My bottom-line price would be 5p for a decent gift on a kids' magazine and about 13p to 15p on an adult title, but the vast majority of bags or hats will cost a publisher between 13p and 40p per unit. Those who can afford it will pay more in order to boost circulation at a crucial time in the year." Most of the freebies, it may not surprise you to learn, are made in China.

While the bigger-circulation magazines such as Glamour (577,000) and Cosmopolitan (462,000) would baulk at spending more than 30p - on perhaps a make-up bag or a sunhat - for every reader, there is a growing feeling that GWP costs are now spiralling out of control.

"Looking at some of the gifts this summer, such as CDs and travel bags, I simply cannot believe that some of my rivals are paying any less than 50p per item, which, for a magazine that sells at well under £3 and supports a print run of more than 200,000 or so, makes them an enormous cost factor," says Kippin, who was publisher of National Magazines' Cosmopolitan for eight years before decamping to its two-year-old rival.

"As a new magazine, we use gifting to encourage people to sample our title and to encourage them to come back next month. Others in our marketplace simply use the freebies to prop up ailing circulations and make their ABC figures look good; that's where the freebies are going slightly out of control."

If the mountain of key-fobs, flip-flops, soft drinks and chocolate bars that now attach themselves to glossy magazines are hated by distributors and newsagents, and do little for the posture of paperboys and -girls, they have a champion in Martin Cork, a senior ad director at IPC, who believes that, far from being cheap window-dressing, gifts can be genuine circulation-boosters.

"Unlike the sachets of body lotion or shampoo that are found inside the magazine and are paid for by advertisers," Cork says, "the cover mount, which is dreamt up by marketing and paid for by the publisher, can be an important extension of the magazine's personality. As long as you get it right - and that means that you don't put a bottle-opener or a pack of condoms on the cover of Smash Hits or any other young teen magazine - it can be a great way of attracting new readers and temporarily lifting circulation."

But it is that short-termism that worries Niall McKinney, marketing director of IPC Ignite!, who is responsible for the circulations of Loaded, NME and Uncut. "Giveaways don't engender long-term loyalty and they don't boost profits in the long term," he says. "We use cover mounts to attract attention and alert new readers, but we also take the view that they are a blunt instrument to be used with caution.

"The men's-magazine market is in a gifting war right now, and there is a definite correlation between the magazines that are struggling and the desperate frequency with which some of them are launching ever more cover mounts - up to 10 every year."

Of course, not everyone is complaining. Thompson of Giftpoint says: "It is still possible to buy tens of thousands of ballpoint pens that look as though they cost a fiver, but may actually cost you only 13p each." Yet even he acknowledges: "The cost of freebies is rising fast, and publishers are terrified of insulting their readers with rubbish."

He adds: "There have in the past been instances of newspapers cover-mounting really cheap T-shirts that literally rip apart on the first wash, but you'll find that nowadays gifting is taken far too seriously to bother with the real tack."

At Cosmopolitan, where recent cover mounts have included flip-flops, a beach bag and a novel, the group publishing director, Jan Adcock, backs that up: "We have used a GWP five times this year, which is fairly restrained," she says, "and each one has been carefully selected to reflect the lifestyle of our readers. To be totally frank, I would love Cosmo to stay at the top of the market simply through great journalism, but as long as my rivals offer gifts to encourage new readers and reward existing ones, I have no option but to do the same."

MOUNTING COSTS: RECENT MAGAZINE FREEBIES

Zest - mirror compact

Elle - reversible bag

Top Santé - free CD: The Ultimate Feelgood Collection

19 - make-up bag

Company - clutch bag

Elle Girl - eye and lip palettes

Prima - tote bag

InStyle - travel bag

Eve - beach bag

Esquire - playing cards

FHM - 108-page book: High Street Honeys 2003

Loaded - Kelly Brook photo book

Red Line (car magazine) - chamois leather

DJ: last CD in series of global dance music

Fast Car - key-fob

Your Horse - horse-food sample