PrintWorks 2010, Sydney Australia
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Global Developments in Print
Tuesday September 21, 2010
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Agenda• Most recent sales data• Key trends for the future• Example of value added solutions• Final thoughts on the evolution of the
industry
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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.
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Profit Picture Isn’t Pretty
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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.
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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.
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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.
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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
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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.
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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.
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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.
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TurnaroundsType 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.
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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 products
16.7%
Print related paper and consumables
2.9%
All other services 2.6%
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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
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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
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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.
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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.
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Encouraging News• 18 – 34 year olds prefer to learn of
marketing offers via direct mail rather than email.
Market Segment % Preferring Direct Mail
% Preferring Email
Personal Care Products 62% 22%
Food Products 66% 23%
Over the Counter Medicines
53% 21%
Insurance 43% 21%
Financial Services 44% 19%
Travel 42% 34%
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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.
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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.
Sainsbury – The UK
Free gift varies according toShopping behaviors
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Solution Development• Agency for strategy and creative• Printer/Mailer• Digital Press• Variable data software• Direct Smile for icing fonts
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Cross Channel Anatomy
Data
Messaging/Channels
Trackable Response/Purls Gurls/Curls
Nurture ActivitiesRevenue
Best Practices
Capture Information
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• 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
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• 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
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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
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QR Codes
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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.
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Augmented Reality
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Augmented Reality• Offers tremendous potential to add value
to educational, entertainment and marketing oriented print.
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• 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
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TransPromo: More Than a Pretty Redesign
)BEFORE: Preprinted
color (logos & tints) sent through
laser printer
AFTER: “Full color
imaged on white paper.
100% variabledata
Automobile Finance Lease Statement
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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
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Re-engineering the workflow/value chain
– Books– Enrollment kits– Specialty photo products– Magazines– Web to Print
• Print On Demand• Collateral management
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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.
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• Advanced and Review Copies
• Keeping books in print
• Backlists• Short runs
Short Run Book Printing
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The Blitzprint Approach
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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.
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Magazines – Hansaprint, FinlandBusiness 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
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Hansaprint - ResultsPersonalized 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.
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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
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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
MyPhotoFun - Netherlands
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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.
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• 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
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Prudential Retirement PlansPlan sponsor name and logo, call out instructions, web links, step by step instructions, retirement income projections
Maria
Michael
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Results• The length of the average kit was reduced
from 40 pages to 25• Production costs were reduced by
approximately 30%
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Solution Development• Marketing agency specializing in highly
personalized strategic documents.• Size and expertise to go after #66 on
Fortune 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.
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• 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
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• Results– Sales of Diageo
spirits have risen by 10%
– Competitive brands have been delisted by some Diageo clients.
Diageo Personalized Menus
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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.
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Opportunity Exists• Personalized and relevant multi channel
campaigns.• Short run book publishing.• Photo imaging books and products.• Trans-promotional documents.• Collateral management.
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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.
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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.
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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.
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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
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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!
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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