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More Support for the “Print That Performs” Theory

September 28, 2017

By Hal Hinderliter

Anyone involved in the printing industry over the last twenty years might be forgiven for the over-use of heartburn remedies! It has been a rollercoaster ride of sudden economic jolts (9/11), devastating recession (2007), and digital displacement by desktop PCs, then mobile phones (a process that is still ongoing). Numerous printshops have merged, downsized, or gone out of business as we struggle to reinvent ourselves for the new realities of today’s marketplace.

HH1PrimirFour years ago, I was deeply engaged in research for PRIMIR that would support my anecdHal3otal observations: while overall print sales had declined since the dawn of the 21st century, the shrinkage had mostly affected “print that informs.” For my PRIMIR study “Value-Added Printing and Finishing for Improved Profitability,” I borrowed that phrase from PIA’s Dr. Ronnie Davis and Ed Gleeson, who first observed that print applications whose intended function is merely to serve as a distribution vehicle for information were in rapid decline.

PDFs, websites, email newsletters, and smartphone apps have made it possible to deliver raw information more rapidly and cost-effectively than print. Add in the search and personalization capabilities enabled by content management systems, and you’ve got a potent competitor for the printed and bound lists of data that once packed our bookshelves.

250Even in those applications where the desire for a physical record has some cache (invoices, statements, financial reports), the looming threat of “going paperless” has exerted a ruthless downward pressure on the price of print. In the March 2017 report “Service Provider Market Pricing Study, 5th Edition,” market research firm Madison Advisors noted that somewhere between 15% and 20% of transactional documents (bills and statements) have converted to electronic presentment, a significant loss of print volume. Facing the potential escalation of e-presentment, Madison Advisors’ report tracked how the widespread adoption of continuous inkjet presses by transactional printers has “driven per image prices down by ~50%” in comparison to the traditional production technique of using high-speed laser printers to add text to lithographically printed web rolls. The report also points to falling ink costs, which “have decreased with the soaring volume of inkjet printing over the past eight years” as a contributing factor in the rapid decline of color inkjet pricing from ~$0.06 in 2011 to $0.035 – $0.04 per one-sided sheet in 2016. 

From an economic viewpoint, this scenario is perfectly reasonable. The price of a good is determined by its perceived value, and one way to quantify that value is through the examination of three fundamentals: cost, utility, and desirability. For print applications that simply transmit data to a recipient, the functionality (utility) of a web page or an email can be equivalent to a monochrome-printed statement on bond paper – perhaps even greater, for those who maintain an organized electronic archive of their bills and investments. Add to this a constant drumbeat of messaging that portrays paper as wasteful and an environmental threat (regardless of the truth), and it’s no wonder that print service providers are forced to slash prices in order to maintain customers.

Does it have to be this way? For some forms of print, the answer may well be yes. Clearly, the value proposition of searchable databases accessed via websites has decimated the market for directories and parts catalogs. Yet catalogs can also provide an insight into the ways that print succeeds when it’s focused on performing a task other than the simple transmission of information…  

The modern catalog is no longer an all-inclusive compendium of every product on offer; instead, they have become an effective form of direct mail marketing, arriving periodically with a smaller assortment of products tied to a specific theme. Many brands are pushing this concept even further, adding persuasive articles and more illustrations in order to transform their mini-catalogs into custom publications (magazines that are not dependent on subscriptions or advertisements, but are funded as a marketing expense). High-profile examples such as GameStop’s Game Informer and Costco’s The Costco Connection are enormously popular custom publications that blur the line between magazines, catalogs, and direct mail. There’s no getting around the success of this approach: data from the PSA Research Center shows that four of the top ten magazines (ranked by circulation) in 2016 were produced by brands, not traditional publishers.

These examples support the conclusions reached by my 2013 PRIMIR study: while print that simply informs is quickly succumbing to digital displacement, print that performs is alive and well! Based on 577 survey responses (209 printers, 52 trade shops, 225 print buyers and 91 brand owners), the desire for enhancements that make print more functional, persuasive, or durable appears to be growing, not retreating. This should be seen as a positive trend for all involved, since the overwhelming majority of PSPs said these value-add services improved their profitability.

HH3Profit

More anecdotal evidence can be found by examining the growing trend for digital press manufacturers to emphasize their inline finishing options: machines that previously did little beyond churning out printed rectangles are now capable of creasing, scoring, punching, folding, gluing, stitching, and many other formerly post-press processes. These capabilities allow digital print to perform functions that go beyond the mere transmission of information: motivating buyers, protecting package contents, combating piracy, differentiating brands, and much more.

For a final example supporting the benefits of high-performing print applications, take a look at the winners in this year’s MUST SEE ’EMS competition. Most of the honorees are focused on enhancing the functionality or beauty of printed output, covering everything from quality assurance for printed RFID tags to systems that print on corrugated board, ceramic tile, or textiles. Two winners are offering new ways that digital presses can be enlisted in the war against counterfeiting: Xerox FreeFlow users can leverage a portfolio of security techniques found in the new Xerox Specialty Imaging product, while five-color presses capable of printing white ink can create security effects via Color-Logic’s Security-FX for Digital Presses.

As I recommended to the audience at FSEA’s Odyssey tradeshow back in May, it’s time to fix a critical gaze on those skids of work in progress scattered throughout your plant. Are these jobs capable of generating revenue for the clients who asked you to produce them, or are they more accurately viewed as budget-draining overhead? By consciously deemphasizing your desire to land no-frills, CMYK-only projects, consider advocating for “print that performs” as a way to insulate your sales against the continuing impact of the Internet, smartphones, and other forms of digital conversion. 

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