There are always lots of new products and business opportunities demonstrated at the ON DEMAND show. With 2008 a designated DRUPA year, there will be a bumper crop of new technologies coming to rock the POD marketplace. The key importance associated with this year’s product, solution, and service announcements are that they reflect the impact that digital technology has on the transformation of our industry and our society. The overriding theme that I saw at ON DEMAND was digital technology forever changing the way that buyers and sellers will interact. In addition, graphic communications services are essential to participate in this new digital world.
To be successful, large and small companies will need to build their micro-targeting skills, identifying small intense subgroups and communicating with them about their individual needs and wants
There’s a recently released book entitled “Microtrends: The Small Forces Behind Tomorrow’s Big Changes.” Author Mark Penn says that there’s a shift taking place in today’s market—it cuts across all facets of our lives. Driven by digital technology, the consumer is in control. Penn says the focus in the future is the individual. The power of individual choice has never been greater. To be successful, large and small companies will need to build their micro-targeting skills, identifying small intense subgroups and communicating with them about their individual needs and wants.
In his book, Penn highlights just how individualized products and services have become. You can’t just buy potato chips anymore—you must choose from baked, fried, rippled, reduced fat, salted, or flavored (barbeque, sweet potato, vinegar, sour cream and chive…). While struggling a bit of late, Starbucks is governed by the idea that people make choices. Some consumers are avoiding caffeine, fat, and sugar, but others embrace them. Starbucks’ success was built on the concept that it can be all things to all people, and the company makes no bets on one set of choices over another. As another example, there’s eHarmony. Individuals are expressing personal preferences online relative to the types of people they want to associate with…not to mention date! Meanwhile, the iPOD demonstrates the perfect power of choice and individualization. iPODs are popular because they let us pick and choose our own songs. When we link this with communication choices, personal preferences abound. There are direct mail pieces, e-mail messages, custom publishing tools, blackberries, and personal blogs. Personal technology has become personalized technology, and this is a “My Media” world!
ON DEMAND 2008 Technologies Targeted toward a “My Media” World
The average person is hit with approximately 5,000 marketing messages each day. Twenty years ago, 80% of the American population could be reached by placing an advertisement on the three major television networks. Today, it would take 150 to 200 advertisements to reach that same audience.
Outside of their mass-marketing comfort zone, marketers are quickly realizing the benefit of segmenting markets and targeting communications. Segmentation means personalization and relevance. In today’s world, it is all about “My Media” and how the consumer wants to be contacted. What was considered a futuristic approach has become a staple of business-to-business and business-to-consumer communications.
In this “My Media” world, there are four guiding principles that will be pervasive across the customer media experience:
- Consistency in communications across all media channels
- Integration of marketing communications (mass and personalized)
- Relevance in content and timing
- Providing tools for marketers to demonstrate knowledge and trust with each interaction
2008 will bring the tools that affordably deliver on this promise for consumers and marketers. From a software perspective, traditional Web-to-print is being transformed from a storefront concept to the much more robust concept of multi-channel Web services. These solutions have expanded in scope to incorporate capabilities such as document and template customization with variable data capability, multi-channel campaign management, digital asset management, inventory control, and integration with production workflow. There has also been a significant expansion of hosted solutions deployments, providing ease of entry and accelerating time to market.
Solutions that were once deemed as multi-channel are further expanding. Key trends include:
- Increasing support for multi-channel marketing campaign management, including creation, tracking, and data analytics
- Continued support for “TransPromo” implementation as well as Web-enabled document composition and collaboration
- Variable image personalization software tools as a source of differentiation for print service providers
The list of software solutions and new partnerships was extensive. Kodak announced its intent to acquire Design2Launch, Elixir announced its DesignProTools 3.0 to accelerate TransPromo market expansion, Canon partnered with Printable, Pageflex showcased its 6.0 Variable Data Software and Campaign Manager, RSA showcased WebCRD Dynamics, RISO became a reseller of Objectif Lune in its pursuit of the TransPromo market, and MindfireInc. highlighted its new ROI calculator.
While this list is nowhere near comprehensive, the message is that software solutions are now readily available to compose customized documents and track effectiveness. Graphic communications providers can individualize communications to compete in a “My Media” multi-channel world.
Leading up to the Drupa 2008 trade show, we are also seeing new high-speed color engine announcements that are designed to make “my media” print communications more affordable than ever before. These products (which are primarily inkjet but include some toner-based products in the mix) represent a new class of ultra-high volume continuous feed color devices. Speeds faster than 2,000 pages-per-minute have been demonstrated. Quality levels have increased, and so has the ability to print on a broader range of substrates. Running costs are well below existing cut-sheet products. While these multi-million-dollar products operate most cost-effectively when printing tens of millions of color impressions per month, they can also produce custom information on each page. What’s more, this isn’t over yet. We will see additional significant production digital color announcements as we get closer to Drupa.
With significant reductions in TCO (< 2¢ per page), entire new markets will open that link to more individualized and personalized communications. The POD versus offset run length crossover will increase to over 10,000 + impressions.
Emerging New Markets – Like Never Before
The combination of robust software tools and affordable digital color will take individualized communications into emerging new markets and transform traditional offset printing.
The photo publishing market didn’t exist 5 years ago, but Shutterfly had total net revenues of $186 million in 2007, representing an increase of 51% over 2006. When we talk about individualization, Shutterfly’s Personalized Products & Services revenues were $105 million. This represented a 69% increase over 2006 and accounted for more than half of the company’s total revenues. Print revenues totaled $81 million, an increase of 34% over 2006. That’s affordable digital technology driving a new market opportunity that is designed to focus on the individual.
Traditional book publishers in the United States publish roughly 120,000 books a year. During 2007, Lulu published 98,000 new titles globally, created by its 1.2 million registered users
While Lulu.com is not a printer, the firm eliminated traditional entry barriers to publishing, enabling content creators and owners (authors and educators, videographers and musicians, businesses and non-profits, professionals and amateurs) to bring individualized work directly to their audience. The creation of user-generated content—“my content”—has grown exponentially. Traditional book publishers in the United States publish roughly 120,000 books a year. During 2007, Lulu published 98,000 new titles globally, created by its 1.2 million registered users. It’s about “my book” and “my content” in a micro-trend world.
Let’s take this one step further. With very affordable digital color, even more market opportunities will arise. Custom publishing is an existing market that marries the marketing ambitions of a company with the information needs of its target audience. This occurs though the delivery of editorial content—via print, Internet, and other media. Marketers want to deliver relevant content to customers linked to life stages and demographics of micro-targeted groups. Custom publishing was a $55 billion market in 2007, up 20% over 2006. As color becomes more affordable, marketers and publishing executives can segment magazine content and associated advertising even more closely. The publications will be more tightly linked to what author Mark Penn refers to as “small intense subgroups,” and the content will communicate with them about their individual needs and wants.
The 30 to 50+ page inserts in your Sunday paper (known in newspaper-speak as FSIs) are a significant revenue source. These have historically been printed on traditional offset technology with a six-week lead time. The cost and time historically precluded many smaller local retail firms from taking advantage of the Sunday paper's targeted distribution. Why not print them in the newspaper packaging operation with a digital press? Small quantities (1,000 - 10,000) could be printed with a few hours lead time and inserted directly into the Sunday ad package.
The North American market for full digital color TransPromo impressions was valued at 1.6 billion in 2006, and InfoTrends forecasts this to reach 21.7 billion by 2010. This is clearly a market driven by better-valued digital printing systems and software tools. The transpromotional approach opens up the door to converting the statement insert to an onsert. It means that the marketer can print custom messaging or coupons directly on the statements where the customer is already focused. It blends “my message” with “my statement.”
“My Media”—The Time is Now!
The overriding message from the ON DEMAND show is that in today’s market, the individual and personalized technology rule. It’s all about “me” and “my media.” This means that graphic communications service providers need to embrace the technologies to deliver:
- Consistency in communications across all media channels
- Integration of marketing communications (mass and personalized)
- Relevance in content and timing
- Provide tools for marketers to demonstrate knowledge and trust with each interaction
For your customers, It’s a cross-media world. This means new business opportunities for you. Personalization is going mainstream in the marketing world. We have been waiting a long time for this and it will accelerate the digital print opportunity. The Internet is a critical driver and it needs to be a cornerstone of your business plan.
In addition, ultra-high-volume digital color opens a new frontier. It will drive digital color printing into entirely new segments for the printing industry.
