Print works - Keynote, Sydney Australia
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Keynote given at the 2010 PrintWorks Conference and Exhibition in Sydney Australia
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Print works - Keynote, Sydney Australia
- 1. Global Developments in Print Tuesday September 21, 2010
- 2. Agenda • Most recent sales data • Key trends for the future • Example of value added solutions • Final thoughts on the evolution of the industry
- 3. 2009, A most unpleasant year. • September 2009 US Shipments were down $907,000,000 compared to 2008. • In Australia: printing industry gross value added stood at $3,480 million which is 4.1 per cent lower that the previous financial year's outcome, and 20.9 per cent lower than the reported outcome of two years ago.
- 4. Profit Picture Isn’t Pretty
- 5. On the Other Hand • 1st and 2nd quarters of 2010 showing slights improvements in both US and Australia. • US increase due to continued downsizing and the departure of weakest printers, not more demand or higher margins.
- 6. Key Trends • Migration of print communication to digital media • Explosion of color • Ink jet technologies will take volume from both toner based digital devices and offset presses. • Faster and faster turnarounds demanded • Workforce evolution • The revenue mix is changing to include more sales from non production services.
- 7. Migration to Digital • Slow economies fueled a faster migration to digital methods of messaging. • Digital advertising spend will surpass print in 2010. – Out of collective spend of $368 Billion, 32.5% will go to digital advertising with 30.3% going to print.
- 8. Non Local Production • 1980, 70% of all printed products were purchased from a company within 100 miles of the customer. • Today it’s 45% and dropping. Country Production US US, Canada, UK and the Far East Western Europe Estonia, Poland, and other Eastern European countries Asia-Pacific Asia Pacific
- 9. Asia Pacific • Asia-Pacific is fastest growing market • Publication and commercial printing growth fueled by developing economies in China and India. • High-end packaging applications increasing rapidly especially in Vietnam, Philippines, Thailand, and Malaysia.
- 10. Color Exploding • In 1970 most pages were black and white. • Full color will be 85% of all print volume by 2020. • Today, full color represents 59% of print volume.
- 11. New Technologies • Half of all printing will be done digitally by 2020. • Inkjet printing promises to take volume from both toner based engines and offset presses.
- 12. Turnarounds Type of Project % of All Volume Short run, time sensitive 45% Short run, non time sensitive 9% Long run, time sensitive 24% Long run, non time sensitive 19% Not Classified 3% Total 100% Short Run classified as under 2,000. Time Sensitive is classified as less than 2 days. In U.S. 8% of work is required in less than 24 hours. That percentage is expected to grow to 30% by 2020.
- 13. Current Revenue Mix $1.1 Trillion (US dollars) Industry Type of Service Percentage of Revenue Creative Services 7.6% Prepress, printing and finishing 70.2% Distribution and storage of print 16.7% products Print related paper and 2.9% consumables All other services 2.6%
- 14. Future Revenue Mix • As traditional print volumes decline, revenue will come from new services. – Strategic marketing and creative services – Programming – Database services – Email distribution – Tracking and analysis
- 15. Watch Out For • Buying equipment, software and people before there is business to justify the expense. – Develop partners who can supply critical services – Squeeze costs out of integration processes – Consider new business models for access to services and talent
- 16. It’s a One to One World • Run lengths continue to decrease. • Getting the right message to the right person at the right time via the right channel is the future of marketing. • Customized markets not mass markets. • Social media is providing a way for niche businesses of all kinds to reach interested constituents. – Presents opportunities for one to one marketing for these new businesses.
- 17. Direct Mail • Remains an effective marketing tool when used correctly. – Direct mail offset print volume has peaked and is dropping. – Growth is in personalized print and shorter run lengths.
- 18. Encouraging News • 18 – 34 year olds prefer to learn of marketing offers via direct mail rather than email. Market Segment % Preferring % Preferring Direct Mail Email Personal Care Products 62% 22% Food Products 66% 23% Over the Counter 53% 21% Medicines Insurance 43% 21% Financial Services 44% 19% Travel 42% 34%
- 19. Reflection of Email Proliferation and Spam • 25 percent of respondents perceive they're getting more postal mail compared to a year ago • But… • Nearly three times that amount say they're getting more e-mail.
- 20. Sainsbury – The UK Program objectives: • Engender loyalty among a key segment of customers using – personalized messaging and offers Significant results reported by user: • Increased redemption rate to more than 50% • Representing a 50% increase over non personalized tactics. Free gift varies according to Shopping behaviors
- 21. Solution Development • Agency for strategy and creative • Printer/Mailer • Digital Press • Variable data software • Direct Smile for icing fonts
- 22. Cross Channel Anatomy Trackable Capture Messaging Response/Purls Information /Channels Gurls/Curls Data Nurture Revenue Activities Best Practices
- 23. Girl Scouts – Arizona, USA • Business Need – Declining donations – Needed to engage alumni and cultivate new donors • Strategy – Personalized postcards sent to targeted alumni segmented by age group – Second channel used when email address was known – Recipients directed to Personalized URL and encouraged to join Facebook Cause page
- 24. Results – Girl Scouts Arizona • Results – 4.9% unique response rate – 31% of respondents donated – Increased average donation amount from $50 to $250 – Grew Facebook membership – Captured information on referrals
- 25. Solution Development • Franchise provided marketing understanding to develop a thorough multi- channel solution • Sales professional with ability to build a business case for a multi-channel solution • Variable data print, email and purl software • Digital print engine • Mailing capabilities
- 26. QR Codes
- 27. QR Codes • Merge print and digital communication to enhance the recipient experience and drive results. • Provides way to integrate video, audio, additional relevant content and e-commerce into print.
- 29. Augmented Reality • Offers tremendous potential to add value to educational, entertainment and marketing oriented print.
- 30. TransPromo - Spain • TransPromo – Increases effectiveness of the information communicated – Provides a way to easily integrate billing and sales messages – Color and graphics improve response – Improves readability and reduces traffic to call centers
- 31. TransPromo: More Than a Pretty Redesign Automobile Finance Lease Statement ) BEFORE: Preprinted color (logos & tints) sent through laser printer AFTER: “Full color imaged on white paper. 100% variable data
- 32. Solution Development • Transactional print, data and forms design expertise • Sales professional who could build a business case for workflow process engineering and combining transactional and marketing documents • Print Service Provider specializing in transaction statements • High volume print engine, GMC software • Distribute and print capabilities
- 33. Re-engineering the workflow/value chain – Books – Enrollment kits – Specialty photo products – Magazines – Web to Print • Print On Demand • Collateral management
- 34. Short Run Book Publishing • 20-40% of all books printed by traditional publishers are destroyed. • A re-engineered supply chain can reduce waste and associated warehousing, inventory, and shipping costs. • The result is more publishing of first run books by digital technology.
- 35. Short Run Book Printing • Advanced and Review Copies • Keeping books in print • Backlists • Short runs
- 37. Threat of Electronic Substitution • Sales of wholesale e-books for February 2010 were $28,900,000, a 339.3% increase over February 2009 ($6,600,000). • Opportunities is in niche markets where hard copy is preferable.
- 38. Magazines – Hansaprint, Finland Business Objectives – Test the concept of personalized magazines (Magazine 2.0) – Research the brand effects of personalized magazine ads – Compare personalized magazine ads to printed direct mail – Introduce Magazine 2.0 concept to potential customers
- 39. Hansaprint - Results Personalized ads vs. static ads • 93% of all responses came those receiving personalized versions. Personalized direct mail vs. personalized ads • Direct mail drew higher response rates – 3% vs. 2%. • Personalized ads in magazines generated response over longer period of time.
- 40. Solution Development • Printing firm specializing in printing, logistics services and e-media solutions • Both magazine and digital printing capabilities • Variable data and Direct Smile software
- 41. MyPhotoFun - Netherlands Program Objectives – Offer amateur digital photographers a convenient method of making quality prints from digital images – Print images in book form – Offers faster and more convenient production compared to traditional methods Results Reported by User – Significant new revenue for TED Gigaprint – Print volume doubled during the first few months – Number of business partners grew – Business continues to grow 10% per month
- 42. Solution Development • Management team with foresight to develop a business model using other printers as channels and other consumer websites for advertising. • Application programming expertise for downloadable end user application. • Digital printing capabilities.
- 43. Enrollment Kits – New York, USA • Business Objectives – Streamline production of information kits and reports to individuals – Reduce production costs – Increase participation and investments in plans – Improve customer experience by making the document understandable
- 44. Prudential Retirement Plans • Plan sponsor name and logo, call out instructions, web links, step by step instructions, retirement income projections Michael Maria
- 45. Results • The length of the average kit was reduced from 40 pages to 25 • Production costs were reduced by approximately 30%
- 46. Solution Development • Marketing agency specializing in highly personalized strategic documents. • Size and expertise to go after #66onFortune 500 list of Top American companies. • Sale professionals who could position the company as trusted advisor on “mission critical” communication. • Database and security expertise. • Variable data and design expertise. • Digital printing and mailing.
- 47. Collateral Management - UK • Business Need – Increase brand awareness for Diageo products – Increase sales of premium spirit brands • Strategy – Online portal where sales representatives create customized drink menus & posters for pubs throughout Ireland and England. • Fully automated workflow from order to delivery.
- 48. Diageo Personalized Menus • Results – Sales of Diageo spirits have risen by 10% – Competitive brands have been delisted by some Diageo clients.
- 49. Solution Development • Agency creative. • Print service provider designed workflow, web portal and providing programming. • Sale professional built business case for a transformed marketing process to improve customer loyalty and drive sales. • Variable data and web to print software. • Digital printing presses.
- 50. Opportunity Exists • Personalized and relevant multi channel campaigns. • Short run book publishing. • Photo imaging books and products. • Trans-promotional documents. • Collateral management.
- 51. As the Print Industry Evolves • Don’t confuse pent up demand with a return to pre downturn levels. • The industry has changed forever. • Focus on developing differentiation strategies so prospects have a clear understanding of what you do and why they should buy from you. • Make strategic decisions that will maintain your differentiation.
- 52. Differentiation Strategies • Niche manufacturer • Price Performer – Most efficient, low cost producer. • Supply chain management consultant – Providing customer with savings and control of one vendor doing it all. – Specific types of business with defined needs. – Can’t just execute, must integrate. • Marketing services provider – focused on delivering specific results to customers. – Does not require ability to produce all aspects of the solution. – May also focus on market segments.
- 53. Your Differentiation Strategy • May also mean changes in your distribution model – Internet sales replacing non value adding sales professionals. – Sales professionals who can elevate levels of contact, manage complex sales cycles and develop business cases for their solutions.
- 54. Workforce Evolution • Depending on the differentiation strategy • New Positions may include: – Project managers instead of Customer Service Representatives – Document engineers – Database managers – Direct marketing experts – Solution sales professionals – IT Specialists – Networking Specialists – Distribution Specialists
- 55. Conclusions • Future profitability may come from not being bigger but better. – Profitability from new services with high profit margins, not more production volume. • Higher profits come from taking greater responsibility in the business value chain. • New businesses targeting smaller niches provide opportunity. – Packaging and targeted multi channel marketing solutions. • Proliferation of digital content generates new opportunities in photo imaging, short run book publishing and more!
- 56. Sources • Caslon, the management company of PODi • Printing Industries of America and Australia • Frank Romano, WhatTheyThink.com • NAPL, Strategic Perspective 2010: New Rules of Recovery, Andy Paparozzi
Editor's Notes
- Asia-Pacific is expected to be the fastest growing market. In Asia, publication and commercial printing is a growing business fuelled by developing markets such as China and India. Printing in Asia is ready for a period of dynamic growth, driven partially by high-end packaging applications, especially in Vietnam, Philippines, Thailand, and Malaysia.
- Of all printed work, by revenueShort run and time sensitive...................45%Short run and not time sensitive...................9%Long run and time sensitive...................34%Long run and not time sensitive...................19%Not classifiable...................3%Thus, less than one third of all printing may be applicable for offshore printing.
- The one exception was travel related offers with
- Project: Hansaprint Proves Personalized Magazines EffectiveVertical Market: Printing ServicesBusiness Application: Publishing & Direct Marketing/Lead GenerationBusiness Objectives• Test the concept of personalized magazines (Magazine 2.0)• Research the brand effects of personalized magazine ads• Compare personalized magazine ads to printed direct mail• Invite customers to free “Personalized Brand Communications”seminars• Introduce Magazine 2.0 concept to potential customersResults• Personalized magazine ads were proven extremely effective. For theDecember 2007 issue, 50% of the magazines were personalized, 50%static. 93% of all responses came from people who had received themagazine with a personalized ad.• Personalized direct mail produced higher response rates(3% vs. 2%),but personalized ads in magazines had longer lasting effects, as manyresponses came after five weeks of mailing compared to within onlytwo weeks with direct mail. Personalized direct mail was only sent toprospects in Finland whereas the magazine also went to readersmainly in Sweden, Norway and Russia. (The DM target market waslimited because the seminar being marketed was held in Helsinki.) Ofthe 250 seminar attendees, 120 came from the magazine and 130from the direct mail campaign.• Using this concept, seminars were filled with much less effort thanhad been previously necessary. Almost all bookings were madethrough the personalized Web site instead of through calls andemails from sales representatives. Also post seminar reviews weremade with personalized emails directing attendees to an Internetsurvey.• Personalization of the magazine drew attention and interest – 57 %noticed their own name first. 65% of the recipients described thepersonalized ad as surprising and 60% as positively different.• The use of picture personalization has almost doubled amongHansaprint customers since this program started. Also severalmagazine publishers have considered utilizing the Magazine 2.0concept in their publications.© 2009 PODi, the Digital Printing Initiative www.podi.org/casestudy3• To evaluate the effect of personalization in people’s remembering thead, 30 non-professionals from different backgrounds were surveyed.Here are the results:SpontaneousRememberingRemembered Witha PromptPersonalized Ad(50%)20% 60%Static Ad (50%) 0% 30%Personalized Cover(100%)30% Not availableCampaign ArchitectureHansaprint's Magazine 2.0 concept uses targetedadvertisements to guide the reader to a customized webpage containing content and advertisements fitting thereader's profile, as well as various additional services,questionnaires and customer relations managementcontent.The personalization of the magazine is a pleasantsurprise to most readers, and tests show that they willremember the effect for a long time. Magazine 2.0 turnsthe magazine into a targeted and genuinely interactivemedia, creating a continuum to electronic media andfrom there to other commercial activities. While Web2.0 changed a personal media into a communal media,this concept is turning a communal media – themagazine – into a personal media without losing thecommunity building effect.Product-wise, this concept consists of a magazine witha personalized portion, for example the covers, and acommon part which would be the rest of the content.The personalized part can be used for localized orreceiver-driven content and special personalized adswhich drive the reader to their personalized landingpages on the web.Magnifying glass and paper note werepersonalized on front covers to add interest.Hansaprint Proves Personalized Magazines Effectivewww.podi.org/casestudy © 2009 PODi, the Digital Printing Initiative4Target Audience and MessagingThe magazine is published by Hansaprint for their customers. Major parts ofthe readership are consumer marketing experts or magazine publishersbased mainly in Scandinavia and Russia.The messaging in the ads for a given product/event didn’t change from thestatic ads; it just incorporated personalization by adding the recipient’sname and a personalized URL (PURL) into the imagery. Several differentversions of the front and back cover have been tested:• For the September 2007 edition, the front coverwas personalized with the receiver’s name on asoccer field billboard. The back cover adextolled the virtues of multi-media channelmarketing and used Venice as the city ofchannels as the metaphor. The ad had a pictureof Venice with clouds forming the receiver’sname. The corresponding campaign website(which was not personalized) consisted ofstreaming video clips of a gondolier talkingabout multi-channel marketing.• In December 2007, the receiver’s name wasformed using wooden toy blocks and placed onthe front cover to promote a line of children’stoys. The back cover ad had a picture of aframed New Years Promise promoting a freeseminar, with the receiver’s name andsignature as well as a personal username andpassword for personalized landing page.• In March 2008, the receiver’s name andcompany name appeared on the front cover,dissolved by a magnifying glass. On the backcover, an ad attempting to get readers to attenda free seminar was featured. The creative used aday planner highlighting the date of the event,while the receiver’s name appeared to becarved into a wooden pen. Their personalusername and password for personalizedlanding page was hand written in the calendarpage of the day planner.© 2009 PODi, the Digital Printing Initiative www.podi.org/casestudy5• June 2008’s cover featured the receiver’s first name on a paper note.In the back cover ad, the receiver’s last name appeared as the nameof world’s largest cruise boat. A personal username and password fora personalized landing page was in the ad text.OfferThe ads did not contain offers. The Hansaprint seminar that was promotedwas free.Creative and Outbound PiecesThe original idea was to incorporate the recipient’s name into an image ofwhat was being advertised. So if the ad was for children’s toys the name waspersonalized in wooden toy letter blocks. If the ad was for a seminar thenthe imagery used a date planner to note the date and time of the seminarand the recipient’s name was added to the barrel of the pen.Reasons for SuccessThe Magazine 2.0 concept turns one-way static media into interactive multimediacommunication offering new earning models for magazine publishersand higher attention rate and traceability for advertisers.This application won PODi’s 2009 Best Practices Award in the Self-Promotion category.Framed New Years’ promise and day planner and pen ad promoted free seminars. Cruise ship with therecipient’s name on the side promoted an updated Web site.Hansaprint Proves Personalized Magazines Effectivewww.podi.org/casestudy © 2009 PODi, the Digital Printing Initiative6Client HansaprintPrint Provider &AgencyHansaprintwww.hansaprint.comBased in Finland, Hansaprint is the biggest printing house in the Nordiccountries and the leading service company in the Baltic region specializing incomprehensive marketing communications solutions. The company concentrateson the development of printing and logistics services and emedia solutionssupporting these services. Hansaprint has subsidiaries and partners in allNordic countries as well as in Western Europe, Russia, Hungary and Romania.A total of more than 1,000 graphics industry professionals work at the variousbusiness units of the company.Hardware Covers were printed on a Kodak NexPress 2500 plus. The rest of the magazinewas printed offset.Software Print Shop Mail and DirectSmile were used for picture and text personalizationNexStation RIPPPML Produced using PPML/VDXFinishing Perfect bindingTarget Audience Hansaprint customers – publishers, consumer goods manufacturers andconsumer goods marketing personnelDistribution 5500, three to four times per year, three language versionsDate 2007 and 2008
- Project:MyPhotoFun Provides Web-to-Print Portal for PhotographersVertical Market:Printing ServicesBusiness Application:Specialty Printing/Retail TED Gigaprint, a large digital printing service in the Netherlands, developed MyPhotoFun, a convenient and inexpensive way for amateur photographers to produce albums, calendars, and agendas from their digital photos. The program has created a significant new revenue stream for the company and has spread across Europe through partner printers.Program ObjectivesOffer amateur digital photographers a convenient method of making quality prints from digital images Print images in book formOffers faster and more convenient production compared to traditional methodsSignificant Results Reported by UserSignificant new revenue for TED Gigaprint Print volume doubled during the first few months Number of business partners grewBusiness continues to grow 10% per monthDescriptionTo generate more digital printing business, TED Gigaprint decided there was a market for printing digital images for amateur digital photographers. The key was coming up with an attractive alternative to the usual practices of uploading images and printing loose prints. The program, dubbed MyPhotoFun, provides users with an easy-to-use Web-based system for arranging digital photos into bound albums and calendars. When they choose to print, they get high-quality color printing at about half the cost of processing film per print. Customers download free software, add captions, and drag and drop their photos into a choice of formats and sizes. Then they upload the file for printing. TED Gigaprint and print partners fulfill orders using automated Web-to-print software to print on Xerox iGen3 digital presses. The customer receives the finished products within five days of the order. DocuTraffic software at TED Gigaprint handles billing and payment to Web and print partners automatically. The MyPhotoFun service generates significant revenue for TED Gigaprint and its partners. Consumer-oriented Web sites post the MyPhotoFun link to collect a percentage of revenue from each job initiated at their sites. Consumers pay in advance, eliminating credit concerns for printers. Print partners receive jobs fully imposed and ready for printing on the iGen3 press; and TED Gigaprint’s workflow enables automated, profitable batch printing. Since the service launched in June 2005, total print volume has doubled in each of the first few months of operation and continues to grow at 10% per month. New partners join regularly, adding geographic reach and incremental revenue for all. ClientConsumersPrint ProviderTED Gigaprint http://www.ted-gigaprint.nlTED Gigaprint is a digital printer in Almere, the Netherlands.HardwareXerox iGen3SoftwareMyPhotoFun Web interface, TED Gigaprint proprietary Web-order-print software (XML); back office software from TED GigaprintTarget AudienceAmateur digital photographersDistributionVariesDateJune 2005, continuing