American Printer's mission is to be the most reliable and authoritative source of information on integrating tomorrow's technology with today's management.
Dec 1, 2008 12:00 AM
A few years ago, some industry observers doubted web offset's ability to compete with sheetfed presses' shorter run lengths, quality and technical advancements. But web offset press manufacturers have responded to the challenge. Print quality matches sheetfed, run length thresholds are decreasing dramatically thanks to automation, and new technology is enabling some unique new production scenarios.
Hurdles ahead include an uncertain economy as well as rising paper, postal and energy costs. Almost half of our respondents indicated the biggest challenge facing their companies is a declining demand for printed products.
These are particularly trying times for newspaper and publication printers who are feeling the fallout from rising production costs coupled with slow ad sales.
As we go to press, for example, Ziff Davis Media announced it will cease publishing a printed version of PC Magazine as of January 2009. Ziff Davis CEO Jason Young told the New York Times that while the print magazine would be profitable in 2008, it would lose money in 2009 due to rising costs and decreasing advertising. PC Magazine derives most of its profit from its website — more than 80 percent of the profit and about 70 percent of the revenue comes from the digital business.
In previous AMERICAN PRINTER articles, consultant Bob Rosen observed that profit leaders have enough sales month-in and month-out; they produce work cost effectively and quickly, and they find new ways to add value for customers so they don't have to compete on price alone. Our survey respondents generally seem to be following Rosen's advice.
Web offset printers represent the largest segment of the printing industry in terms of volume and total sales. Their activities influence the way manufacturers plan product introductions and how smaller printers will plot their future. Because of web offset's prominence, AMERICAN PRINTER publishes an annual report for this market segment. It is prepared in conjunction with the marketing research department of Penton Media, AMERICAN PRINTER's parent company.
A special thanks to Goss International (Dover, NH) for once again sponsoring this exclusive report. For more information, see www.gossinternational.com.
New standards for letter-size catalogs, aka slim-jims, could be released by the end of the year, says U.S. Postal Service spokesperson David Partenheimer. “We plan on publishing new standards for slim-jims in the Federal Register soon, based on the results of this year's testing,” he says.
Slim-jims have helped many mailers survive cost increases by reducing postage and paper costs. The tall skinny trim size (roughly 6⅛ × 11½ inches and typically up to ¼ inch thick) is cheaper to mail than a full-size book, and uses less paper.
But a proposed USPS rule adjustment to slim-jim requirements could eliminate significant savings. The Postal Service says slim-jims are too fat under the current requirements, and the tabs required to seal the pages aren't strong enough, resulting in equipment jams.
Partenheimer says the first round of Federal Register notices will announce the changes the USPS hopes to implement. “Customers will have about 45 days to comment on our proposal and then we will retool our standards as much as operationally feasible to accommodate the concerns they express,” he says.
“If that can be accomplished in time for a May implementation,” he adds, “then that is what will happen.”
But Partenheimer insists that mailers won't find major size changes when the new standards come out. “We want to work with the industry to find solutions that work for [catalogers] and the Postal Service,” he says.
While there are some size issues that likely will be addressed
in the Federal Register notice, he notes, “they are not
significant changes, and do not involve any changes to
— Jim Tierney, www.multichannelmerchant.com.
Mailing fewer pieces: 59%
Reducing paper basis weight: 53%
Reducing mailing frequency: 49%
Reducing page counts: 37%
Changing trim sizes: 37%
Moving more print online: 28%
That was one blunt write-in comment. Better keep an eye on proposed slim-jim changes for 2009.
We asked printers which of the following they plan to purchase in the next 12 months:
Digital press: 27%
Mailing/distribution capability: 17%
Four-color proofing system: 9%
Sheetfed offset press: 12 %
Heatset web offset press: 6%
Coldset/open web press: 5%
Hybrid offset press: 3%
Develop sales in new markets: 27%
Improve cost of manufacturing: 19%
Sell more to existing clients: 17%
Specialize in a targeted market niche: 10%
Understand what jobs your company prints most profitably: 9%
Add more non-print services: 5%
Improve customer relationships: 4%
A combined 69% indicated it was “extremely” or “very” important.
The Direct Marketing Assn.'s (DMA's) “State of the Catalog Industry, 2008 edition” found that similar to prior years, some 62% of respondents said catalogs were their primary sales channel; websites were second (20 percent), followed by retail (6 percent). There was a large increase in circulation from 2003 to present, likely a result of more companies using catalogs to drive web business.
Why don't more people read newspapers? “Lack of time” was the top reason cited in a Harris survey of adults in five European countries, Australia and the United States. Half of adults in Germany and Australia as well as more than half of French (54 percent), U.S. (56 percent) and Spanish (58 percent) adults access online news and information sites at least once a day. In Italy, this number jumps as three-quarters of adults (74 percent) access online news sites at least once a day. See www.harrisinteractive.com.
NAPL asked its Printing Business Panel members what actions they've taken in response to the downturn in the U.S. economy. Figures exceed 100% because many cited more than one step.
Cut costs: 48.9%
Delay hiring: 40.2%
Delay or cancel capital investment: 39.1%
Reduce hours: 35.3%
Cut staff: 35.3%
Cut benefits: 9.8%
Ad spending across all media, including print, broadcast and the Internet, might fall 1.8 percent this year and 3.6 percent in 2009, according to a Citigroup report. Citigroup had originally projected growth of 0.2 percent in 2008 and a decline of 0.3 percent next year. Newspaper spending might suffer the biggest drop, slipping 16.3 percent this year and 12.5 percent the next. Internet spending growth, projected at 11.4 percent for 2008, could slow to 5.8 percent in 2009, according to the report.
About 30% of our respondents indicated they have earned FSC or SFI certification; 45% didn't cite any environmental certifications.
Declining demand for printed products: 44%
Commodity pricing: 42%
Increasing paper prices: 40%
Rising energy costs: 21%
Limited capital for improvements: 19%
Lack of skilled employees: 18%
Selecting directions for future growth: 17.9%
Selecting new technologies: 13%
Production inefficiencies: 10%
Rising postage costs: 9%
Environmental issues: 3%
Special Editorial Report
NAPL's (Paramus, NJ) annual “State of the Industry” report defines the challenges and the historic opportunities facing today's graphic communications executives. “It's a look at where we are and a forecast for 2009,” says Andrew D. Paparozzi, NAPL vice president and chief economist. “Topics covered include capital investment trends and how to maximize those investments, executing a plan of action more effectively; turning the recession into an opportunity; and a detailed look at the structural changes within the industry.”
The report is based on data provided by 600 companies with annual sales ranging from less than $1 million to $200 million. Participants included NAPL members and nonmembers. The publication is free to NAPL members; $299 for nonmembers.
We asked printers how much of their total revenue is derived from ancillary services (anything except ink on paper). It seemed unlikely that anyone would indicate 100% — and no one did. Surprisingly, 5% didn't know what percentage their ancillary activities might represent — we hope they will invest in an MIS in 2009! Here's what the rest had to say:
Percentage of total revenue from ancillary services:
80 to 99% of total revenue: 3%
60 to 79% of total revenue: 4%
40 to 59% of total revenue: 16%
20 to 39% of total revenue: 37%
1 to 19% of total revenue: 32%
According to Audit Bureau of Circulations (ABC) FAS-FAX preliminary numbers, only four of the top 25 daily newspapers in the United States had circulation gains vs. the prior year for the six-month period that ended September 30, 2008.
USA Today, the largest U.S. newspaper, increased circulation 1.04 percent, to 2,293,137; No. 4 Los Angeles Times increased 0.5 percent; No. 16 The Philadelphia Inquirer increased 2.31 percent; and No. 22 St. Petersburg Times increased 0.04 percent.
|106 to 120 minutes||5%||1%|
|More than 2 hours||3%||1%|
Improve the front-end link from customer to prepress 27%
Install new production equipment 23%
Improve the planning and scheduling process 18%
Speed press makeready 9%
Improve postpress operations 5%
Obtain better data on plant productivity 5%
Advanced pressroom training 5%
Looks like workflow & MIS are the winners, here!
The majority of our respondents indicated they are on track to apply Intelligent Mail Barcodes (IMB) as a replacement for POSTNET and PLANET barcodes.
We'll be following up with readers about another key postal change. The Move Update Standard took effect November 23, 2008. It requires all commercial First-Class and Standard Mail mailers to update their customer data within 95 days prior to the date of the mailing, down from 185 days under the current rules, to continue to qualify for certain postal discounts. Specifically, mailers will be required to use a USPS-approved solution to match address records with customer-filed change-of address (COA) orders received and maintained by the Postal Service.
The new standard is designed to reduce the amount of mail that is either undeliverable or must be forwarded, to lower USPS costs. In 2004, the Postal Service handled almost 10 billion pieces of Undeliverable As Addressed (UAA) mail. Approximately 76 percent of this was move-related address changes, and Standard Mail accounted for 63 percent.
Look for more information in the January 2009 issue of AMERICAN PRINTER.
What's the average makeready and running waste in your shop?
Coated paper: 82%
Uncoated paper: 71%
Multichannel Merchant's (www.multichannelmerchant.com) Jim Tierney reports the fourth quarter marks the sixth straight price rise for paper. Most of the major mills announced price increases for many paper grades — $3 per hundredweight (cwt) or $60 per ton — effective October 1, 2008.
We asked respondents to indicate where they expect to see key progress in the next five to 10 years.
Digital soft proofing and overall workflow were tied at 17% each; hybrid press technology: 18%; inline finishing: 15.4%; makeready: 13%; press controls: 11.5%; color management: 6%
In previous surveys, makeready has topped the list. Admittedly, given the impressive Drupa 2008 demonstrations, it's hard to imagine there are many makeready peaks left to conquer!
Before we get too carried away, note that “more efficient makeready” topped respondents' suggestions for building a better web press.
What's the main thing web press manufacturers can do to improve their product?
More efficient makeready: 23%
Reduce start-up waste: 13%
Make electronic components more reliable: 12%
Enhance press versatility: 12%
Reduce manpower requirements: 10%
Simplify operation: 10%
Speed spare parts availability: 8%
Faster startups: 4%
Make mechanical components more reliable: 4%
Print coupons are still tops, reports PROMO magazine (www.promomagazine.com). Including freestanding inserts (FSIs), 99.5 percent of all offers still come on paper, according to Charles Brown, vice president of marketing for coupon agent NCH Marketing Services and co-chair of the Promotion Marketing Assn.'s Coupon Council.
Nonetheless, online coupons are gaining ground. While they account for a small percentage of all those distributed, online coupons increased 80 percent last year (vs. 1.5 percent for FSIs), Brown says.
“Internet coupons are the fastest growing because more people are online,” he adds. “So marketers are using the Internet as a way to reach consumers more effectively.”
One reason is that redemption rates for online coupons average 15.4 percent vs. 0.5 percent for FSIs, says Matthew Tilley, marketing director for grocery coupon processor CMS and the other PMA Coupon Council co-chair.
Also people are snubbing newspapers and getting news on the Net. Tilley believes young people are particularly hard to reach through FSIs: “The Internet certainly has possibilities. It makes sense to promote in an environment where a lot of consumers are.”
Ocean Spray sees the logic. The fruit-juice maker is distributing online coupons in addition to traditional FSIs. The goal? To expand its reach and drive new product trials. Visitors to www.cranergy.com can print a $1-off coupon for its Cranergy juice drink.
As of June, the company reported 157,000 online coupons had been printed. The effort, which Coupons Inc. is handling, is slated to run through September.
General Mills has doubled spending on Internet coupons in the last two years. It has signed on to Coupons.com Brandcaster, a new service that tailors coupons based on site content and sends them to clickers' printers. Hundreds of other companies use the technology, including Johnson & Johnson, Kraft Foods and Clorox.
Print in the Mix, a clearinghouse of research on print media effectiveness sponsored by the Print Council (Rochester, NY), recently featured a Magazine Publishers of America (www.magazine.org) study. The report reconfirms prior studies that show including URLs in magazine ads drives readers to advertisers' websites. The biggest lifts came in the women's service, home, and travel categories, where ads featuring web addresses were, respectively, 98 percent, 103 percent and 186 percent more likely to boost website visits.
Web printers aren't too worried about competition from flexo or gravure printers. When asked which print processes they perceive as a threat to web offset volume, they cited digital/toner (49%) followed by high-speed inkjet presses (42%) and high-speed sheetfed perfectors (40%).
IT Strategies' Marco Boer predicts:
“Growth for inkjet will be in transaction printing, manuals and some books, direct mail and, to a lesser extent, community newspapers.”
But this won't happen overnight. Digital printing took at least a decade to take hold and it is still the early days for inkjet.
Source: NPES News
The Web Offset Champion Group (WOCG) (www.wocg.info) has issued a special collection of its popular best practice guides. This first ever 242-page “Tool Box” compendium combines seven publications:
The best practices Tool Box costs $100 for GAIN members; $150 for non-members. See http://tinyurl.com/3d3xjo.
Balanced capacity: 45%
Too much capacity: 31%
Not enough capacity: 24%
The Web Offset Assn. (WOA) (Pittsburgh) (WOA), a PIA/GATF special interest group, has issued a call for entries for its 2009 WOA Annual Print Awards Competition. Entries are due January 16, 2009. Recipients will be honored and winning entries will be prominently displayed during the Offset and Beyond Conference, May 3-6, 2009 in Las Vegas.
Competition sponsors include Central Ink, Flint Group, Goss, INX, Manugraph DGM, Prime UV Systems, and US Ink-A Sun Chemical Corp.