Commentary & Analysis
European demographics and advertising trends – how they will affect print
By Sean Smyth
Published: July 25, 2012
After a sharp drop during the recession, we are forecasting further reduction in paper usage over the ten years to 2021, based on research from our study The Future of Print IV. http://www.smitherspira.com/the-future-of-print-4.aspx
There are significant pressures on paper usage that will continue to intensify, particularly the replacement by electronic methods and environmental issues that will become more prevalent. In considering the future of print volumes there are usually counter effects from the same developments. For example, advertising on the Internet is growing, but many browsers and applications provide pop-up blocking to avoid the adverts. Online advertising provides replacement for many print products but also enables new print markets, allowing individuals and micro-businesses to become a growing market for print. In developing this forecast we have taken many factors into account, economic forecasts but importantly the changing populations.
The European population will grow. In the long term the 15–59 age group will reduce and the number of people aged over 70 will increase. There will be more, smaller households as families fragment and this will lead to more bill recipients. Smaller pack sizes mean higher packaging and label volumes. For print markets these trends augur well. More potential consumers in the more affluent countries will consume printed material, buy packaged goods and receive written mailed items. Older consumers are less likely to switch from books to electronic reading devices, but longer term there will be less resistance to change as the internet and tablet computer generations become the majority of consumers. Affluent older consumers are a key target group for advertisers.
They buy many items such as healthcare products that boost packaging and labels. Economic performance is a key factor in the development of print and printed packaging markets. Following considerable turmoil in the past four years the European economic outlook is difficult to forecast. Real GDP growth in western Europe will average between 1.5% and 2.5% per annum from 2011 to 2016, while it will be a little higher in the developing east. Print is a key component of the education sector, with textbooks, workbooks, test papers and student records all being printed. In all countries the presence of a literate, well-educated population leads to higher consumption of newspapers, magazines and books, with greater use of printed advertising. Changes in the provision of education will affect print, with growth in the distribution of textbooks over to the internet and e-books supplanting many physical books. The practice of school and college students submitting work electronically rather than in written form is reducing the demand for paper in the education sector.
Advertising, as a physical product or as classified and display ads in newspapers and magazines, is a key driver for print volumes. Accelerated demand from advertisers for internet advertising is having an impact on print advertising, with revenues from print advertising expected to decline across all media over the forecast period. New techniques of multichannel communications to engage with consumers are developing, while the return on advertising expenditure is being monitored carefully. The wider coverage of broadband technology will likely accelerate the trend further as it allows faster downloads of large amounts of data, including graphics and photo.
The developments in communications technology are moving towards a connected world through computers, tablets and smartphones. Internet usage figures show that the medium is growing consistently, generally resulting in a downward impact on print readership. These changes cause advertisers to rethink their overall marketing strategies and to devote more resources to experimenting with electronic media. The growth of online quoting and workflow helps to make the pricing of print jobs and the availability of capacity more transparent throughout the industry and has been partly responsible for continuing downward pressure on prices. Additionally the internet has opened up significant new print markets, allowing printers to sell collateral to micro-businesses through web-to-print and products such as photobooks and personalised greetings cards to individual consumers. Firms such as Vistaprint and Flyeralarm use the Internet to serve millions of customers and the market for photo printers in Europe continues to grow.
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This article is based on information from our study The Future of Print IV, which provides quantitative 10-year forecasts for Europe by print product and paper grade, and is based on major new primary research and expert insight. The study is available now.
For more information about Smithers Pira, the worldwide authority on packaging, paper and print industry supply chains, please visit www.smitherspira.com