The document discusses key global developments and trends in the print industry. It notes that 2009 was a difficult year with sales down significantly in the US and Australia. While 2010 showed some improvements, it was largely due to industry consolidation rather than increased demand. Key trends highlighted include the migration of print to digital media, explosive growth in color printing, demand for faster turnarounds, and the print industry workforce evolving to provide more non-production services. The document provides several examples of companies innovating through personalized and targeted multi-channel print marketing campaigns. It emphasizes that future profitability for print companies will increasingly come from providing differentiated services and solutions rather than prioritizing production volume.

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.

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 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

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

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.

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 Response/Purls Gurls/Curls Messaging/Channels Capture Information Data Nurture Activities Revenue Best Practices

23. 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 Girl Scouts – Arizona, USA

24. 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 Results – Girl Scouts Arizona

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.

28. Augmented Reality

29. Augmented Reality Offers tremendous potential to add value to educational, entertainment and marketing oriented print.

30. 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 TransPromo - Spain

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% variabledata

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. Advanced and Review Copies Keeping books in print Backlists Short runs Short Run Book Printing

36. The Blitzprint Approach

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. 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 Enrollment Kits – New York, USA

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. 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. Collateral Management - UK

48. Results Sales of Diageo spirits have risen by 10% Competitive brands have been delisted by some Diageo clients. Diageo Personalized Menus

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