Drivers and Barriers for Adoption of Color Digital

Within the last few years we have seen the introduction of two high-speed inkjet technologies aimed at the direct mail space. One is the new high-speed color inkjet presses and the other is high-speed color inkjet heads that can be mounted on existing offset presses.

Value of color

As with all new technologies, there are only two reasons to adopt it: it provides additional value or it lowers costs. The additional value of color digital presses and heads comes from the ability to produce fully variable color direct mail. The value is solely in color variable because direct mailers have had the technology to do monochrome variable for quite some time. And there are case studies popping up where full color variable digital printing is adding value. One such case study is in the selling of cell plans to customers coming off a two-year plan. In this situation the cell phone companies are using their knowledge of customers to send offers for a new plan with full color images of the new phones that are available to subscribers. In this scenario the value of full color digital printing outweighs the added costs. Another use case is in the insurance industry. Communications with policy holders or prospects are configured to appear as if they are coming from the local agent. And local agents always want their picture on every communication. And they want the picture to be in color.

Speaking at a Canon analyst event, Dave Johannes, VP of Digital Print and Mail Operations for IWCO, the nation’s largest direct mailer indicated that relevant messaging is emerging as the ultimate targeted communications objective. Many of their customers are seeing triple digit lifts in response rates resulting from matching an offer to a need. He noted that relevant variable text and/or imagery are proven to drive superior results. These relevant campaigns rely on complex data integration, timely processing, and smaller production batches

Hybrid Production

Both high-speed inkjet presses and high-speed inkjet heads can deliver fully variable color images. Using inkjet heads means the design is limited in size to the width of the head, typically 4.25 wide. Stringing two sets of heads together can achieve a full page width. For direct mailers who have invested millions in their offset web production systems, adding color heads makes sense as it is the lowest cost option to produce fully variable images. By just selectively printing full color variable the cost per piece is only slightly higher than if the full piece was printed using traditional offset press technology. This works as long as the direct mailer can get the customer to work within the design limitations of the head configuration.

Eliminating Preprinted Forms

High-speed inkjet presses can offer cost savings in addition to full color variable imaging. Nearly all direct mail letters are first printed with an offset shell and then overprinted with black laser. Using a color digital press allows for printing to be done in one step, eliminating the cost of offset printing, storing, and handling preprinted forms. As the cost of inkjet ink declines this savings becomes more valuable.

Postal Savings

High-speed inkjet presses are enabling another cost savings and this one appears to be significant. With one of these presses the direct mailer can run white paper in and the completed job out providing the direct mailer with the option to co-mingle jobs on press. This allows the direct mailer to bypass a cost center (co-mingling) and create substantial savings.

Workflows

Being able to print the output for a direct mail campaign is just part of the challenge. Customers who value personalization or customization are finding that getting the campaigns ready to print can be quite challenging.

Production inputs are in silos among the different functions (creative, strategy, operations, etc.) The process has been worked out for single version mailings; however as the number of versions increases the complexity of the review and approval processes increases exponentially, making the process untenable without new tools. Solving this problem is critical for the future of color digital printing in the direct mail space.

To overcome this barrier high-volume direct mailers need a new workflow that streamlines collaboration among strategy, creative, and production. Companies like Naehas are now offering workflow solutions to address this issue.

Ad Spending

Direct mail is just one of many choices for marketers today. And with the rapid growth in mobile communications and social media it’s not a surprise that budgets for direct mail are declining while online ad budgets are growing. According to Winterberry Group, spending on direct mail in 2013 in the U.S. is expected to decline by 0.9% to $44.8 billion, while all direct and digital marketing is expected to rise by 5.9% to $137.2 billion. Direct mail remains the largest single direct marketing expenditure, followed closely by teleservices at $41.2 billion.

Cross Media

While according the 2012 Channel Preference Study conducted by Epsilon, direct mail is still the most trusted channel, direct mail alone is not sufficient for communicating with customers. The study found that technological advances play a role in how people choose to consume information and messaging. Also noted in the study, however, was that it is becoming increasingly evident “Mobile device users” were 40-50% more likely to prefer email and online communications, respectively, than non-users. The study noted that three-quarters of consumers continue to prefer direct mail for brand communications, so it is clear that direct mail will continue to be key in consumer marketing, but expect savvy marketers to integrate other channels such as mobile, social and video, alongside direct mail. 

Insurance information and financial information is still preferred in printed form, and the growing proliferation of online banking and insurance portals will offer a unique opportunity to combine these channels with direct mail.

Usage of technology to connect print and the online world is continuing to develop. QR Code usage continues to climb. Companies that learn how to properly leverage the convenience of quick response codes on mail pieces are seeing an increased ROI from immediate conversion. The next generation of technology to connect to the online world involves invisible codes: such as the technologies from Digimarc, Ricoh (Clickable Paper), and Documobi.

Augmented reality applications and print ads utilizing tablet devices are gaining steam and demonstrate that print is an ideal pairing for smartphones and other mobile devices. Technology paired with mail will become commonplace, as the future of direct mail will only benefit from the mediums and data that it is paired with.

The market is moving from cross media or cross-channel campaigns to marketing automation, whereby ongoing tracking and trigger-based communications are employed. Marketers now have the ability to track responses across all channels and can readily determine their ROI.

Summary

The digital printing industry has been promoting the value of variable data printing for quite some time now – a good solid ten years. Adoption occurred first with low volume applications. Now, finally, we are seeing the large direct mail suppliers purchasing high speed color inkjet presses and heads and as the remaining barriers to adoption are being knocked down, we are seeing adoption and rapid growth for high volume color digital printing of direct mail.