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Oct 1, 1998 12:00 AM

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Communication using the Internet has been growing by leaps and bounds. In 1995, seven percent of all adults accessed the Internet. By 1998, that number had jumped to 36 percent. The dramatic growth of the Internet and the World Wide Web is affecting every sector of business, and the graphic arts industry is no exception. The latest figures show there are more than 1,500 printing-industry related Web sites, for example, but in an industry with 35,000 companies, that's still a drop in the bucket.

To better understand the printing industry's coexistence with the Internet, the Graphic Arts Marketing Information Service of Printing Industries of America (GAMIS/PIA) commissioned a study to investigate how printers use the Internet and the Web as a value-added service, a profit center, a promotional tool, a production tool and a communication enhancer. Gordon S. Black Corp. conducted the research.

Who's doing what with the Internet? Today, four out of five graphic arts firms have access to the Internet in some form. However, those companies with access do not necessarily have their own Web site.

Ninety percent of large companies (50 employees or more) have Internet access, compared with only 73 percent of firms with fewer than 20 employees.

Even though 80 percent of commercial printers and trade shops have Internet access, often these companies do not allow universal use of these services. About two-thirds (65 percent) of locations allow Internet access only through specific departments. Prepress and administrative functions are the most likely to use the Internet, probably because those departments are already equipped with networked computers and, at the least, modem connections.

Of those companies with Internet access, just under half (48 percent) maintain a Web site. And if you consider the entire industry, 38 percent have a Web site. On a percentage basis, more large firms (61 percent) have a Web site than small (less than 20 employees). However, considering that 80 percent of all graphic arts firms have fewer than 20 employees, there actually are seven times as many Web sites representing small printers as compared to the larger firms.

Why don't more printing companies maintain Web sites? Of the study respondents, 34 percent were in the process of developing a site and another 26 percent considered it an important step but were too busy to move ahead with it. An additional 23 percent didn't think a Web site would be useful to their companies at this time.

The GAMIS study also looked at why printers launch Web sites-what do they hope to accomplish? The main reasons given were for marketing purposes (41 percent), followed by sales-related functions such as quotes and requests (21 percent) and to facilitate customer service operations (20 percent). An additional 17 percent see their Web site as being ideal for file transfers.

"We established a Web site to get our name out there and to continue our sales and marketing effort in a different venue," states one innovative printer. Another points to better exposure using the Internet. "Instead of being restricted to our geographic market for orders, we would like to receive jobs from throughout the state or other parts of the country."

One printer even said that it was exciting to "see how we've become known from Oregon to Maine" using the Internet. "That wouldn't have been possible without the Web, considering the size of this firm."

If those are the major goals, then what types of services are most frequently offered on printers' Web sites? Most everyone (99 percent) believes that a listing of business services is a basic requirement, and 98 percent include general company information. E-mail was a high-ranking service at 95 percent, along with information on production capabilities (91 percent) and sales information (87 percent).

More Web savvy companies specify that the basic requirements for their Web site include ease of use, targeting to both current and potential customers and a high level of impact. "It needs to be easy to navigate, informational and tell our story without being too complicated," explains one trade shop owner. Another stresses the importance of having the Web site be distinctive and "a little fun."

What is a bit disturbing is that the offerings beyond the basics are amazingly sparse. Only 60 percent offer links to other helpful sites, and barely 24 percent list employment opportunities.

Everyone seems to understand that services need to be listed, but few move beyond that to actually make their site interesting and interactive enough to have people return on a regular basis. This is an opportunity missed by the majority of printers, who obviously see their Web sites as nothing more than electronic "brochures" that needs updating every year or two.

In fact, when asked how frequently Web sites were updated, only 40 percent intend to modify their sites monthly and one-third (33 percent) believe its okay to make changes only quarterly. Another 25 percent don't see the need for changes more than once or twice a year.

Although this reluctance to update Web sites may be traced to a lack of time or personnel, it is an opportunity missed. Visitors at sites need to be fully involved. Offering special weekly or bi-weekly promotions, contests or updates on the latest news gives customers and potential customers a reason to participate with printers' firms. And it can position printing companies as innovative and willing to adapt to changing customer demands.

The biggest gap in the printer Web site offerings relates to electronic commerce. As e-commerce begins to take off in the consumer arena, the printing industry still appears reluctant to venture into these uncertain waters. Only 69 percent of respondents sell services of any type directly through their Web sites. File transfer services are most frequently mentioned (49 percent), but we do not see this as an e-commerce sale. Instead, this is a production tool to speed the handling of files. The industry doesn't sell file transfer services; it sells printing or prepress.

On a more positive note, 48 percent of respondents directly sell prepress services and slightly more than 40 percent sell printing, with color digital printing being more likely to be "sold" than offset.

Interestingly, approximately 16 percent of the survey respondents claim to sell Web-related services, such as site hosting and maintenance, along with design services and digital image management. In spite of this, a whopping 31 percent do not offer customers the chance to purchase any services directly. Again, these may be opportunities lost for printers to sell selected services and products through e-commerce on the Internet. Small firms, in particular, could develop opportunities to sell products over the Internet in a consumer environment using credit cards and fast deliveries.

The GAMIS study also wanted to know if maintaining a Web site was worth it for printers. The survey, therefore, asked if graphic arts firms perceived that their sites generated some profit.

Only 11 percent reported that their Web site makes money, while 43 percent think it breaks even and 38 percent report losing money. However, when asked if the firm tracks revenues and costs related to its Web site, a whopping 67 percent admitted that their responses were based on perceptions, not actual numbers. "We don't have hard data to draw upon," states one survey respondent, "but we see our Web site as an increasingly important component or contributor to our sales and marketing services."

Companies are collecting information about their Web site "hits" through tracking software that generally is part of the site design. And although it is possible to document numbers of visitors to the site, where they are located and what parts of the site they visit, this tracking software only tells part of the tale.

Graphic arts companies need to evaluate their Web site offerings and their cost tracking process in order to get more out of the Internet. It is quite possible to use a Web site as a sales tool with the goal of generating additional income. It doesn't have to be just a "cost of doing business."

To do this, however, printers need to evaluate what customers like about their Web sites-and don't like. The GAMIS study asked if firms evaluated customer satisfaction. Eighty-two percent said "no" and only 17 percent indicated they used some form of tracking. Of those, barely half measured customer satisfaction by using a survey on the site to collect data.

As with all else, it is important to develop procedures to measure success or failure. Web sites are no different. We recommend printers develop a process that regularly assesses a Web site's usefulness to both current and potentential customers. Communicate with your customers to develop and grow your Web site offerings. Without this regular measurement and evaluation, you will not be able to allocate resources properly to this new and potentially powerful sales and production tool.

Try using a 10-point scale denoting levels of satisfaction. Identify which factors and features are most important and more fully develop those that have the most impact on establishing customer relationships and loyalty.

It appears, suggests the GAMIS study, that there is no "best way" to develop and evolve a Web site. Many sites are built in-house; only one-quarter were created off-site by an independent designer or other vendor. It remains to be seen, however, whether graphic arts firms really understand that their site is constantly a work-in-progress.

On the bright side, more than 80 percent of respondents indicate they will be adding new products and services to their site this year. This suggests that printers understand their site needs to remain dynamic to maintain its effectiveness.

With all the shortcomings of the media and the lack of focus in setting goals for establishing and maintaining Web sites, study participants remain somewhat undecided on how effective their efforts have been in improving their companies' bottom lines. However, printers do believe they are deriving benefits from the Internet. It increases exposure for printing companies in the business world, makes file transmission easier and quicker, and increases work cycle efficiencies, especially for those printers and service bureaus using some type of remote proofing procedure (even if it isn't full color).

"I don't think you can do business in 1998 and beyond and not have a Web site. Without one, you'd be seen as outdated and not technologically up to date," observes one printer when discussing the Internet. "It shows we are staying current with technology, creates a tighter link between our customers and us, and eliminates distance issues, speeding transactions."

"We designed our own Web site because all of our future business plans revolve around the Internet," asserts the exec of a $1 million service bureau. "Our goal was to expand on our interaction with customers and streamline our production capabilities."

This service provider considers the Internet a natural migration, boasting that 30 percent of its business can be attributed to the Web site. Part of the service bureau's business is developing and hosting Web sites for other businesses. "It has been a positive experience," claims the exec, observing that hosting sites is profitable for their company. "The reason we're profitable is because we handle the entire package and provide a complete solution."

But there are problems--providing this top-to-bottom service means having support personnel available on short notice 24 hours a day, 365 days a year. For a small firm, that has presented a challenge. Still, points out the prepress exec, "The Internet is a strategic option for us. It represents what we are migrating toward."

For one large commercial printer, establishing a Web site was an extension of customer service activities. The Internet is used for PDF proofing and file distribution, job flow tracking, remote digital color proofing and media asset management services. "The Internet allows us to preserve and promote our brand while adding products and services for our customers," asserts the technology vice president.

This commercial printer provides prepress, print and multimedia services--all under one roof. And customers seem to like this type of one-stop shopping. "We live in a society in which branding is becoming increasingly important. To our customers, having a one-stop source of prepress, print and new media services helps them preserve their branding," comments the exec.

Although the printer's Web site generates no revenue by itself, it does facilitate customer interaction, allowing managers at client sites to contact the graphic arts firm and its interactive services such as media asset management.

The concerns still linger and printers need to work on making their Web sites more useful to customers and, ultimately, to their sales efforts. But the GAMIS study clearly points out that the graphic arts industry is well on the way to integrating the new on-line media with traditional print products and services.

Printers and the Internet" study is available from GAMIS. It includes complete research details and 35 case histories of printers and trade shops with Web sites. The GAMIS Internet report is available for $295 to PIA members; $395 to nonmembers. Contact GAMIS at (703) 519-8176 for more information.

You don't have to be a big company to use a Web site effectively. Such is the case with one service bureau doing less than $5 million in sales. The company's Web site was originally launched to increase the number of sales leads.

"Our company is unique," comments one company exec. "We offer prepress, creative design, packaging and point-of-purchase services. We needed to be able to customize our site for each of these areas."

The service provider solved its problem by using case studies and samples on its site. Customers can click through the samples to obtain more detailed information on production and use. In addition, quote forms are attached to samples to encourage client interaction.

The service bureau also provides Web site development and hosting for its clients. "We believe that we provide better service to our customers by hosting Web sites." And the shop specializes in state-of-the-art animation, sound, video and control features for its clients' sites.

Bottom line: Do they make a profit? "We are actually able to make a net profit on our Web-related services and that generates additional print business," claims the exec.