by: Julie Shaffer, Printing Industries of America
Statistics are a funny thing. Depending upon the story you want to tell, you can spin the same data to report almost diametrically opposed stories. To illustrate, consider this March 8 headline from an article reported on the Folio: magazine website: “Print Magazine Advertising to Grow in 2010 Despite Popularity of Online.” The story reports the results of a just-published study, “Marketing and Ad Spending Study 2010: Total U.S. and B2B Advertising,” a survey of 1,000 advertising executives conducted by research and advisory firm Outsell, Inc.
Sounds optimistic, doesn’t it? Advertisers are spending more on print! The report does, in fact, indicate that ad spending for magazines will rise this year by 1.9 percent, reflecting a spending boost of 4.2 percent for consumer titles and 1 percent for B2B.
The bigger news in the report, however, as reported in virtually every other news outlet, is reflected in headlines like this one: “Digital Marketing Spend to Overtake Print This Year.” The story, as reported in minoline, an outlet for media watchdog firm Access Intelligence, begins, “The long-awaited print-to-digital tipping point is about to be passed. According to information industry consultancy Outsell, the level of marketing spent on the web and in print will finally cross over this year, with $119.6 billion of revenues flowing online and $111.5 billion going to newspapers and magazine ads.”
The news shouldn’t be that surprising, considering the accelerated rate at which publications are moving some or all of their content online. The big takeaway from this story for those in the commercial printing space is in those words “tipping point.” We see the phrase, lifted from Malcolm Gladwell’s book of the same name, more and more today, especially in regard to how communication methods are shifting from traditional media (read: print) to newer, mostly digital, media. As Gladwell defines it, tipping points are “the levels at which the momentum for change becomes unstoppable.” It does seem that the shift from print to digital is reaching a tipping point.
This is not necessarily a bad thing for printers that are providing more than just ink on paper, but are rather offering communication services that embrace this digital shift.
The Outsell report offers some news that is much brighter than the report of a slightly increased print ad spend. The study also indicates that 30.3 percent of the $368 billion marketers plan to spend this year will go to print. More notable is that B-to-B advertisers cite direct mail as one of the methods used to achieve the highest ROI, and this group considers cross-media marketing as the most effective option with 78 percent combining three or more marketing methods.
Positive News for Printers
This is actually positive news for the enlightened commercial printer that has opted to recognize this kind of shift in advertising and marketing communication and offer products and services to help these communities connect with their audiences. Whether we call this being a “marketing service provider” or some other name, the basic premise is that we expand our services to be able to provide what our customers (and to a large degree these have always been marketers) see as essential to effective communication. This means becoming a provider of not just the static print portion (in the event that there is one) of a cross-media marketing program, but also personalized communication including variable print, personalized URLs, micro sites, branded web portals and even interactive mobile links via 2-D barcodes.
Of course, personalized printing can’t be accomplished without a digital press (well, not with any kind of positive ROI anyway). That leads to another tipping point within our own industry – the commercial printer that offers only offset has become a thing of the past. Estimates vary, but it is generally believed that more than half of commercial printers now have some kind of production digital printing device on the floor. While we all know that 2009 was not a stellar year for print, those digital devices have proven to be the one bright spot in the economic picture. In his March 2010 Flash Report, Printing Industries’ Chief Economist Ronnie Davis reports that 2009 ink-on-paper print sales declined a whopping 14.8 percent while digital print sales increased, albeit a marginal 1.4 percent (for inkjet and toner).
These printers are increasingly using their digital and offset presses for hybrid projects, in which jobs combine both conventional and digital printing. Davis notes in the 2009 report Beyond the Horizon: Key Dynamics Shaping Print Markets and Printers over the Next Decade, that almost 12 percent of current jobs combine digital and conventional print, a number that increased to almost 25 percent for sales leaders (printers in the top 25 percent of sales growth).
The “New” Printers
Gary Garner, president of GLS Companies, a Minneapolis, MN, printer with 300 employees and $50M in sales, can attest to this. In a presentation at the 2010 Printing Industries Presidents Conference, Garner detailed case studies of three very different digital/offset projects managed by GLS. The company publishes a customer newsletter, including sections printed offset and digital. Each issue features a “crossover” image where the digital and offset forms stitch together to show how close the color matches across printing processes.
Garner changed the name of the company to GLS from General Litho Services in 2004, anticipating the current trend of removing reference to print in a company’s name. The company is devoted to the philosophy “we’ll get it done” and positions itself as a one-stop marketing service provider of Integrated Communication SolutionsSM. “We’ve had a tremendous amount of success integrating various technologies and getting the message out to our customers,” says Garner. “We do a lot of focused direct mail marketing to very targeted lists, data processing and direct mail dimensional packages where customers go to the Internet to find details about the offer – just a whole myriad of things we’ve been able to do as our business has changed.” Garner stresses that it’s important to get away from the transactional-type projects the industry has traditionally worked on and focus on developing programs that help forge partnership with customers.
This transition isn’t happening just for general commercial printers, but in packaging as well. Bryan Hall heads Graphic Visual Solutions, Greensboro, SC, a 20-year-old company that offers a mix of commercial offset, flexo and folding carton work. In 2009, Hall and his management team decided to change the direction of the company, adding a new mix of capabilities including digital printing, wide-format graphics and cross-media services. To reflect the companys new direction, the name was changed to Graphic Visual Solutions. The rebrand, says Hall, was something he felt the company had no choice but to do. “When you’re trying to get a seat at the table with a new prospect, you mention your company name,” he says. “Graphic Printing Services says ‘print’ and doesn’t reflect everything we can do. It’s possible that this prospect will never purchase printing, but may need one of our other services. So we thought that broadening the name would help open doors for us.”
The Digital Tipping Point
The digital tipping point, whether it is adding digital printing options in an ink-on-paper printer or digital/electronic delivery of a communication message, is indeed upon us. While it may not be essential to the success of every print service provider to take part (there are still a few successful letterpress shops out there), for most, getting on the right side of the way things are tipping will be key to future growth and success. Pay attention to what advertisers and marketers are doing – it points to what you need to do to be their service partners.
Julie Shaffer is vice president, digital technologies for Printing Industries of America. She can be reached at 412.259.1730 or at jshaffer@printing.org.
Reprinted with permission from the Printing Industries of America: The Magazine. Copyright 2010 by the Printing Industries of America (www.printing.org). All rights reserved.
