Commentary & Analysis
FREE SPECIAL: Frank Romano & Bill Lamparter: Is Variable Data a Niche Market?
Addressing the issue of whether variable data is a niche market at the On Demand Conference were Frank Romano,
By WhatTheyThink Staff
Published: April 26, 2002
Addressing the issue of whether variable data is a niche market at the On Demand Conference were Frank Romano, Administrative Chair, School of Printing, RIT, and Bill Lamparter, President of PrintCom. Charlie Corr, Group Director, CAP Ventures Inc., introduced the topic by stating that "what sells digital printing today is not variable data but fast turnaround time and static POD is a larger opportunity." However, he added, "as print output drops in price, printers will be forced to provide services and solutions that provide higher margins.Variable data and the related services do this."
Current estimates of the variable data opportunity vary considerably, although there is agreement that it is growing. One question asked is-- if it’s so great how come it’s not more widely adopted? Another is-- how big is the opportunity, really, and can variable data printing actually become mainstream?
Romano gave his thoughts on the major barrier to growth, which, he predicts, is about to be removed. He declared that digital print quality is "acceptable in most cases" and "printers are the only ones who really look at quality." He then pointed to the real reason that users buy digital print – "automatic collation, output while-you-wait, very short runs ("like one") and variable data."
As to why the variable data industry has not grown as it could have, Romano blamed the manufacturers. I think that’s what he meant when he said, "they are abysmally stupid." Romano stated that manufacturers created the main barrier to widespread adoption-proprietary front-end software for creating the pages. Determined to "have control over their workflow," vendors expected graphic designers to be willing to use their design tools even though they worked only with the one device. "Graphic designers don’t work that way," declared Romano, "they don’t design for a specific machine. They want freedom."
As a result, the early variable data jobs were large and complex, aided by the need to pull together a team that was willing to focus on one output device. "Since teams could not be assembled for the smaller jobs at the entry level part of the market," stated Romano, "vendors had succeeded in starting at the top." Where do you go from there? The good news is that, after many years of effort, a standard is expected to be adopted in 30 days. This is PPML/VDX-one package that will go to any device. Romano believes "the pieces have now come together" to launch the variable data market.
Lamparter called variable printing "a 30 year old embryonic niche market" in its current state. It is 30 years old because the inkjet has been around that long, embryonic because it is at the beginning of "an explosion" and niche because it is still very small. He estimates that only 6% of print is currently variable, but expects this to grow to 25% by 2010-2015. Describing his position as "very bullish," Lamparter gave his reason as "it meets the growing needs in the marketplace." He listed these needs as "a strong drive to reduce costs, the replacement of mass marketing with target marketing and the requirement for a faster time-to-market."
Lamparter acknowledged that electronic media is also moving towards meeting these needs, but are similarly experiencing barriers to adoption. The barriers for variable data printing, according to Lamparter, are "lack of knowledge of what can be achieved by marketing managers, database limitations and the high cost of databases and printing." High response rates are an attractive potential, but he is dubious that buyers know how to "use their data" and "can predict the kind of personal data that should be used to get the prospect to buy something they would not have bought otherwise."
The cost of operation must be lowered; says Lamparter, even though variable data jobs will produce higher response rates, "printers will also use the equipment for static jobs." The costs for creating and maintaining a database "are a major inhibitor." Lamparter urges vendors to focus on the database issue "at the customer level and include the IT guy and marketing manager in the fold." In fact, a study of buyers by printbuyersonline.com and PODi showed that, although only a small number of buyers have looked to the vendors for education, they were satisfied when they did.
As for the printers, studies show consistently that buyers are looking to their printers as a main source for education. Since the marketing person must be educated for variable data to move to the mainstream, Lamparter concludes, "the printer must develop a project approach to selling, costing and pricing."
So, is variable data a niche market? It certainly is now. In fact, printers are using it as a business differentiator. But, as the barriers are identified and overcome, it seems certain to have double digit growth. It also seems likely that, after getting used to customized materials (assuming privacy concerns are overcome), that consumers would want more. Yet, no one can really predict how far variable data printing will go--one reason being that we don’t know to what extent its electronic competition will challenge.