WhatTheyThink sat down with Francis McMahon, Executive Vice President, and Nicole Tully, Manager, Marketing Communications & Sales Enablement, Production Print Solutions of Canon for a wide-reaching conversation that touched on a Canon business update, how better targeted marketing campaigns can help save print, and education initiatives the company has been involved in to help attract the next generation to the printing industry.

WhatTheyThink: Let’s start with a quick update on the state of the industry. How have Canon and Canon’s customers been doing throughout 2024?

Francis McMahon: Overall print shipments did come down a little bit over the summer, and when you look at the total number of placements this year, it’s down from a year ago, but there’s still a lot of equipment being placed out there. The good news, at least for Canon, is that inkjet print volumes are up. Year over year, the number of inkjet pages our customers are producing are increasing. So although less equipment may be going out, the amount of volume that’s going through these machines is increasing. At the same time, we’re putting a lot more ColorStreams into the market, which I’m really happy about because it says the transaction and direct mail markets are doing a little better. And interest rates came down [in September], so that should help placements moving forward.

WTT: You mentioned that volumes are up. How do you see the overall demand for print?

FM: One of the things that keeps me up at night is corporate CFOs that frown on using print for marketing or other applications due to the cost. They don’t understand the value, they don’t understand marketing, they just see a line item cost. And everybody turns on their computers in the morning and there’s something from Chase or American Express saying, “Opt out of your printed invoice or statement.” They all want to do everything electronically. As an industry, we really need to get our heads around helping our current print providers with this. And it can’t just be Canon, it has to be our collective industry out there as well, providing a level of inspiration for print to ad agencies, marketing companies, and the CFOs that are making these decisions.

Part two of that is we as vendors have to watch the way we’re pricing, because the reason a lot of this is happening is that the cost of print continues to go up in order for our customers to make a profit. And as their costs continue to escalate, they’re trying to charge more for print, which is then influencing these CFOs to go more digital. So as an industry, we have to protect our print service providers and make sure that they can generate a decent profit to keep print going. You look at rising postal rates and other inflationary conditions, and then you look at the pressure I and others are under to generate a profit for our own companies. You push all that onto the print service provider and what do they do? They’re getting squeezed.

WTT: That’s something we have been fighting since the dawn of the Internet, proving the value and effectiveness of print. We’ve collected all this data on the effectiveness of print campaigns, how they have higher response rates, especially with personalization. Our data partner, Keypoint Intelligence, for example, continues to regularly conduct studies that show that print is far more effective than an email. But often it seems like we’re all just talking among ourselves. Somehow we have to get that word out to the people who actually make the decisions about where they’re spending their marketing money.

Nicole Tully: I think one of the things that could factor in here positively for print in the future is if print service providers and marketing services providers started using AI technology and incorporate that into smarter lists and more targeted  campaigns. I was talking with a company called Boost.ai, they were one of the sponsors at thINK, and their audience is marketing services providers because they want them to be the experts in educating brands on how they can use print with better, more effective targeting. Yes, you’re going to spend a little bit less on the actual printing and spend a little bit less on your mailing and your postage costs, but you might pay a little bit more for the use of the AI and the intelligence that goes into selecting your campaign. Ultimately, you should also end up with a better ROI, which helps the print service provider justify their costs. My concern with that is implicit in that idea is you’re going to print less, at least in terms of direct mail, but you’re going to target better. They think that a printer might be able to justify their costs better in terms of value as opposed to number of pieces. As you said, we’ve had all this research about the effectiveness of print and direct mail vs. email. We know it, but we still haven’t figured out how to leverage it and how to actually make it happen. Many campaigns are still just mailing to everyone in a ZIP code or everyone in a demographic, whereas AI can pull super-targeted, precise lists. It’s better targeting than if I as a marketer say, “I think this is our demographic.”

WTT: Getting back to the cost issue, you’re right, Francis, the CFO is always going to look at it like, it would only cost 5 cents to print this, but it costs 25 cents to mail this. Our major problem is we have this distribution issue. But the other part of that is we can’t be selling print in a vacuum of “Hey, you’re paying 30 cents for this touchpoint” when you should probably be talking about how when you send out that printed piece, there’s also a digital component of that campaign. So just price it so that it’s one thing. You’re going to pay 50 cents and print is just one component of the whole program cost.

NT: That actually is Boost.ai’s infrastructure to enable a multi-touch and multichannel smart campaign. What they want is the targeted Google remarketing ad for “Nicole Tully.” They want Nicole Tully to get a postcard at Christmas shopping time. And on Black Friday before I get that postcard, they send me the coordinated email. And then two weeks after I get the printed postcard, they send me a followup email, they want my mobile phone to get all the retargeting ads. And all of that is based on AI data that they know they are  targeting Nicole Tully who loves to buy toddler girl clothes, here’s her email address, here’s where she lives. But in order for the printing industry to benefit from that, they need to understand email advertising and digital advertising, and they need to invest in tools where they can launch all of those in coordination with the printed product. Or an agency needs to do that for them. And therefore, our customers need to be tight with the agencies who are doing this.

FM: I think Boost.ai really has the model down, but it’s going to require our customers to become a little bit more savvy and and learn how to use it. Some of our customers are there and can do it. DS Graphics, The Mailworks—many of our customers totally get it and they’re doing it, but it’s going to require a lot more print service providers to adapt a little bit and do more than just print. They need to understand how print fits in.

WTT: Which it seems like we’ve talked about for years. And it’s still…how do we do that?

NT: (Laughs.) I think Boost.ai is a tool that can get them there. It doesn’t have to be the only one; I’m sure there are going to be a few that can do the same thing. We’ve talked about omnichannel marketing for forever, but unless you had someone who knew how to do it and run each individual component, print service providers were just doing the print part.

WTT: Let’s shift gears and talk more about education and inspiring the next generation. In June, you received the Champion of Education Award from the Graphic Communications Scholarship Foundation. At the time, you stated that you hoped the award “can serve as a call to action” to help young professionals. Typically, the industry has a tendency to throw money at this issue. But beyond cash that can help fund education and programs, what else should we be doing?

FM: As we continually build upon this and we become more successful, we have to be able to recruit. We have a lot of organizations out there trying to encourage the next generation to enter the industry, but is everybody really doing enough? My promise for next year is I’m going to put a huge effort personally into just getting everybody together and trying to fund the next generation and encourage them to be a part of the industry.

WTT: This year, Canon’s “University Inkjet Program” completed its fifth year. Why is this program important to Canon? How can we get wider industry support—and support from other equipment manufacturers—around a similar program? And how can we get printing companies to participate and support regional and local efforts?

FM: Imagine if in January we could get leaders from the major hardware manufacturers, from large printing companies like Quad and Taylor, and even people from Amazon, and put together a calendar action item that says, “We’re all going to work together and visit high schools and universities.” The Big 10 or the Big 20 are going to take a leading, proactive role in providing encouragement and education, and we’re going to raise enough money where we can donate equipment and we can provide scholarships.

WTT: Or you look at a shop like Quantum that has access to a variety of machines. You could have the vendors came together and bring in 50 students, give them access to those machines for a week, show them how to operate them, how to design for them, show them what the modern print workflow looks like.

FM: I love that idea.

WTT: Obviously it’s going to need vendor support to do things like that. Canon built the University Inkjet Program, but how do you measure the ROI? How do we define what a “successful” program is, and them how can we sell that to somebody else that might like say, “I can’t sell that to my boss at Landa or Ricoh or HP so I’ll leave it.”

NT: Part of the success was connecting the students with our customers. That is one of the things that has really moved the needle for the students because they don’t know what a career in the printing industry is. It’s not something they see every day. It’s not something that people talk about unless they actually know someone in the printing industry. So for the students, what they envision is being a graphic designer or working in marketing; they’re not really envisioning all of the different careers that are part of the printing industry. What seems to be really transformative for them in this program is when they do get to visit a Canon customer and actually see the print production floor and speak with the people who work there. Similarly, this summer we invited the students who were in the University Inkjet Program class at Clemson University to thINK, so they got to be a full part of the conference and some of our customers set aside an extra hour or two to speak and network with the students and let them pick their brains. And from what I heard from the students, that was the best part because now they could see what the possibilities are. 

FM: And the University Inkjet Program doesn’t cost a lot of money. It’s more a question of time.

NT: It’s a cost-effective program because the universities know that they also need to adapt, so they’re willing to fund the topic and add the classes and other components. But they also need the education from our team. Canon employees will be guess lecturers and offer remote demos from our Customer Innovation Center. Canon also sponsors the class projected, which is designing a print sample to be printing on inkjet technology. Canon employees will assist in judging the applications and helping them get printed, allowing the students to bring their deigns to life.

For more information about Canon’s University Inkjet Program, visit here.