by Heidi Tolliver-Nigro February 9, 2006 -- When we think of Web-to-print personalization and customization, we often think of applications hosted by printers. Customers log into the printer's Web site, select from a variety of templates, customize or personalize them, then order as needed. For clients, this allows them to both increase the relevance of their documents and benefit from a zero-inventory solution. For printers, it provides a high-margin, captive, and recurring revenue stream that can provide them with much needed revenue stability. Web-to-print is changing the relevance of print. All things have become new, in a sense. But not all Web-to-print customization works this way. There is another side that works a bit in reverse. It allows the client -- the corporation or ad agency -- to create their own solutions. On one hand, it's easy money for printers. They receive ready-to-print files that keep their presses busy without any additional investment. On the other hand, it puts the customer right back into the driver's seat. The printer loses the high-margin design, hosting, and application development services, as well as the potential to lock in long-term customer relationships. One of the suppliers involved in producing Web-to-print applications for customers (as well as printers) is JGSullivan Interactive. This month, I'd like to share some back and forth I had with Brett Knobloch, executive vice president of JGSullivan, about the changing in the Web-to-print marketplace and what this means for the future of the printing industry. ODJ: What do you see as the biggest changes in your business over the last couple of years? We had always thought that many agencies weren't getting it, but over the last year, we've started to see that change. BK: We are starting to work with more advertising agencies, branching out from our historical relationship with Ogilvy & Mather. We had always thought that many agencies weren't getting it, but over the last year, we've started to see that change. Also, instead of having to beat down customers' doors, we are starting to see them coming to us. For example, we recently developed a couple of applications for an agency in Detroit: one for an insurance company, and one for a recreational vehicles company. We've also built more second-generation systems, replacing older Web-based systems that didn't scale or have enough flexibility. Ease of use and integrated business logic are often lacking in [our competitors'] first-generation systems. ODJ: What kinds of applications are you producing? KB: Most are for ads. The sizing and customization of ads for different retailers, dealers, or distributors drives agencies crazy. But what once starts with the need to size and customize print ads often diversifies into Web-to-print for direct mail, point-of-purchase, and marketing collateral, as well as "Web-to" for other media, such as email. Other systems start out with direct mail and email, and scale from there. ODJ: Can you elaborate? KB: We've been running an application for a Fortune 500 equipment manufacturer for customizing its retail advertising for a few years, but in November, 2004, we launched the direct mail portion. It's done about two million pieces just in the last year. That's a heavy amount of use by dealers. In the last 12 months or so, it has been so successful that it bested the old application by 200-300 percent in volume and usage. The client is continuing to expand that into stickers and other advertising and marketing specialties. The printer is happier than a clam. ODJ: What would you say to printers who are concerned about losing control of these applications? Instead of offering a high-margin service that locks in customer relationships, they end up back in a price-sensitive commodity situation ("here's the file -- how much to print it?"). KB: First, I would say that we develop solutions for printers, as well as agencies and end users. So we serve the printer community. Second, in almost all cases, once users experience the system they want more templates and functionality -- and it grows fast, so printers should be mindful of their own capacity to scale up before disappointing the client. Finally, at least in our client base, we haven't seen commoditizing due to applications-hosting by clients. Nor do we know of any clients who have switched from printers since they launched our system. In fact, we have been asked to re-build printer-hosted systems that didn't scale for the client. Furthermore, while it might seem that any printer can output a file, it actually is more complicated. On the direct mail end, for example, there are issues of handling prospect lists, fulfillment, and other data feedback services bundled in with their pricing that a competitive printer would have to build from scratch. ODJ: Where do you see your fastest growth in this market? KB: It's hard to say, but we are getting more requests from advertising agencies. One thing that drives many agencies crazy is last-minute requests on Friday afternoon, "I need a custom ad for this." They don't have the staffing to accommodate those kinds of requests, and often, their clients may not really know what they want anyway, so the agencies are creating on the fly. This gets very expensive. With Web-to-print, they can put the client in front of a Web page, give them a variety of choices, and let them create their own ads, while still maintaining control based on established rules and parameters. With Web-to-print, they can put the client in front of a Web page, give them a variety of choices, and let them create their own ads ODJ: Web-to-print, in itself, doesn't require a digital press. Do you see customers running these applications both on digital and offset presses? KB: Not really. All of the work we see is being output on digital presses. One printer we work with, for example, keeps three iGens humming, in part due to their production of Web-to-print applications. ODJ: Are you creating off-the-shelf solutions? Or are they all custom? KB: Most of them are custom, so we can adjust the capabilities to be as simple or as complex as clients need. There is a lot more to these systems than many people realize, and unless your needs are very simple, off-the-shelf systems can be very limiting. There are four main components in any system, and these components can vary widely. These are: (1) templates (the number and complexity), (2) workflow (workflow for direct mail is different from POP), (3) database integration (will the application be general access? will there be a user authentication system, with user names and passwords? will customers able to build and maintain an image library, like logos or signatures?), and (4) reporting. ODJ: What would you say is the biggest change to this market over the last five years? End users are more demanding -- they want everything now KB: Because of the familiarity with the Internet, users are much more anxious to try out these systems. The whole scary "it's on the Web" thing isn't there anymore. Also, end users are more demanding -- they want everything now -- and systems can do a lot more. They can change the sizing of ads on the fly. They can spell check. They offer filtering for text for forbidden words. (If you are an appliance manufacturer who sells to both independent dealers and to Home Depot, you don't want dealers to put in their ads, "We beat Home Depot every time.") They can host ad libraries, so once dealers create an ad, they can save it for later use. These applications are much more flexible, mature, and user-friendly than even a few years ago. ODJ: Are they changing the way customers view print? KB: Yes, Web-to-print is changing the relevance of print. All things have become new, in a sense. Customers have the ability to infuse pieces with a greater value proposition and not just accept what comes off the shelf. That changes the expectation forever. It's like, once we had FedEx and fax machines, snail mail didn't cut it anymore. Web-to-print is a game-changer. It resets the expectations.