Print

Trends

Sales and marketing

Customer care

Innovation

The write stuff

Alive and kicking

At your service

Mother of invention

Worth more than £14bn, the UK print

Boden builds on the back of its catalogue,

Traditional printers are moving into the

Pioneering technology and outside-

industry is still a key means of reaching

while BT spends more than £30m a year

communications business and learning to

the-box ideas are securing the future

clients and customers | Page 6

on direct marketing | Page 9

cosy up to the customer | Page 11

of print | Page 15

April 2012

Distributed within The Daily Telegraph, produced and published by Lyonsdown which takes sole responsibility for the contents

Still standing tall With 600 years of innovation behind it, the print industry is not about to give in to competition from ipads, ebooks and laptops

The brand colour is specified in London.

The designer is in Los Angeles.

Prepress is in Munich.

The printer is in Manila.

Yet you have no worries about your brand’s colour.

PantoneLIVE. Where your colour lives. And thrives. pantone.com/live Telegraph-PLiveAd4-12.indd 1

© Pantone LLC, 2012. All rights reserved.

3/20/12 9:59 AM

Business Reporter 路 April 2012

an independent report from lyonsdown, distributed with the daily telegraph

Business Reporter · April 2012

an independent report from lyonsdown, distributed with the daily telegraph

Print – in this issue

3

The power of print Who says print is dead? In this digital world, the industry is evolving and innovating, meeting the challenges of a changing world ByTrevor Merriden

Publisher Bradley Scheffer brad@lyonsdown.co.uk Managing Editor Lucie Carrington lucie@lyonsdown.co.uk Editor Trevor Merriden Sub Editor Amy Dickson amy@lyonsdown.co.uk Production Assistant Fleur Hollett production@lyonsdown.co.uk Project Manager Lee Robertson lee@lyonsdown.co.uk Bradley Scheffer brad@lyonsdown.co.uk For more information on any of our supplements please contact us: Telephone 020 8349 4363 Email info@lyonsdown.co.uk Online www.lyonsdown.co.uk

The way in which people communicate with customers, suppliers and staff has changed dramatically in recent years. Much has been written about the demise of print in this new world and it is true that new technology and online communication has seen both print volumes and the number of firms in the industry shrink. The emergence of foreign competition and the global recession have reinforced this trend.

The untold story of print, however, has been its dramatic evolution in recent years to meet major structural challenges. Many would now agree that print is evolving rather than simply disappearing – finding a place as one of a multitude of channels through which organisations can reach their target markets. In the process, the printing industry has had to change the way it works with its customer simply to keep itself relevant. The sector has had to reinvent itself as a customerfocused provider of many services – and not just print.

In the run up to Drupa, the largest printing equipment exhibition in the world, to be held in Dusseldorf next month, it is clear that it is the relentless march of technology that will drive new business opportunities for printing to build upon this intensified focus on the customer.

Innovation is driving the print industry to greater personalisation and higher quality as routes to

business-reporter.co.uk

Supporters

profitability, because this is clearly what the customer wants from printing as a means of communication.

Some technology has of course affected far more than the world of printing. Online innovations have turned many a business model, including the modus operandi for printing and distribution, on its head. More industry-specific innovations, such as QR codes that can be scanned by smartphones and variable data techniques that allow, for example, individual customer names to be printed on standard letters.

It’s easy sometimes to get carried away with technology. Some innovations have moved too

Print is evolving… finding a place as one of a multitude of channels through which organisations can reach their target markets far ahead of the comprehension of many printers, let alone their customers. The pace of innovation is impressive but ultimately has to be relevant to a print industry craving profit and productivity, and to customers needing to show a clear return on their investment.

The challenge now for the technological innovators is to make new ways of doing things understandable. And the challenge for any printer, particularly the smaller ones, is to invest in the IT skills that its workforce needs to keep pace with what technology can do.

The print industry may not be quite what it was and is unlikely to return to any so-called heyday. As part of a more customer-oriented offering, however, rumours of the demise of print have been greatly exaggerated. There may be fewer occasions where print is the only answer, but perhaps more where it is at least part of the solution on offer. For this reason alone, the medium of print remains a good choice for many customers.

6 Truth be told The industry at a glance. Nick Martindale reports

9 The big sell Stephen Overell finds that hard copy still works

11 Taking a long view There’s more to print than print, says Steve McCormack

13 Shiny and new A look at what’s to come. Trevor Merriden reviews latest ideas

Contributors Steve McCormack is a writer, editor and editorial project manager with experience in the technology, business, construction and property sectors. He has worked for market-leading professional publications in the UK and overseas, as well as written for the national press.

Stephen Overell is a journalist and commentator on work and labour market affairs. He is the author of Inwardness: The Rise of Meaningful Work and Losing Control Again? Power and the Quality of Working Life..

Trevor Merriden was deputy editor of Managament Today and editor of Human Resources magazine. Trevor has written several well-received business books and runs a consultancy dedicated to helping businesses develop “clever content that sells”.

Nick Martindale is a business journalist who writes for national media and trade titles. He is a former editor of New Business magazine, a quarterly magazine for entrepreneurs.

Business Reporter · April 2012

an independent report from lyonsdown, distributed with the daily telegraph

ADVERTISING FEATURE

The global print and communication event Manufacturers and customers from 138 countries will come together to view and discuss developments and innovations at the world’s largest trade fair in the industry drupa is the world’s largest trade fair devoted to print and communications and takes place every four years at the exhibition centre in Düsseldorf, Germany. With around 350,000 visitors and 1,850 exhibitors from all over the world, it reflects industry trends and disseminates technical developments and product innovations throughout the sector on a global scale.

This year’s drupa, running from 3 - 16 May, will encompass a wider range of communications technology than ever before with its championing of cross-media platforms and applications. Rather than seeing digital communication technologies as a threat to their traditional markets, manufacturers and

suppliers of printing solutions and services have been embracing the opportunities that are emerging and, in many cases, initiating the union of all communication functions to offer an end-to-end, complete service.

This approach will be very much evident at drupa, on company stands and in the seminars and workshops around the show floor. Companies such as Canon, Epson, Fujiflm, Heidelberger Druckmaschinen, HP, Koenig & Bauer, Kodak, Kolbus, Konica Minolta, Landa Corporation, Muller Martini, Pitney Bowes, Ricoh and Xerox will present their solutions to the demands they expect traditional, developing and embryonic markets will place upon them.

At this year’s show there will be an emphasis

on the power and effectiveness of print in complementing creative and informational campaigns when combined with digital media.

Advertising and marketing agencies, publishers and designers will find their visits to the show provide great value. Knowing what print makes possible can add a completely new perspective to their proposals to clients.

These audiences will be attracted by the integration of mobile apps, QR codes, augmented reality and touch codes, cross-media networking with print as the leading medium, modern typography in a cross-media context, printed electronics, 3D and functional printing, largeformat advertising, digital innovations in newspaper publishing, dialogue marketing and

the impact of trends in consumption behaviour on packaging design and production.

Due to its location Düsseldorf allows exhibitors and visitors to generate, establish and cultivate contacts in around 138 countries all in one place, at one event. They will be able to network with manufacturers and customers from emerging and established economies alike.

To book a visitor e-ticket for a discount on prices at the door, register at www.drupa.com

For more information contact Paul Evans on paul@itsluk.com ITSL (International Trade Shows Link) is the UK representative of Messe Düsseldorf

drupa 2012 Hall Plan

To use this AR code With PC webcam: visit www.drupa.com/ar-ad On smartphone/tablet PC: download and start the free Junaio app Find the “drupa ad” channel, start it and point the camera at the photo with the AR+ logo For more information visit www.drupa.com/help

Business Reporter · April 2012

an independent report from lyonsdown, distributed with the daily telegraph

Industry view

5

Colour and human behaviour Colours that do not match the designer’s original packaging intentions can be a real turn-off for consumers, but new technology is coming to the rescue We have all seen someone do it, and have probably done it ourselves – snubbed the first item on a store shelf when its label looked a little off-colour and grabbed the one behind it.

This act seems innocent enough until you consider that probably tens of thousands of consumers take part in this little quirk of human nature every day, causing heartache for supply chains of companies around the globe. Graphic designers, pre-press technicians, printers and brand owners all try their best to ensure that shoppers always pick the first items on store shelves because their labels look right.

A new tool, PantoneLIVE, harnesses the Internet cloud, tying together everyone in the supply chain so that the colours of packaging – whether printed on paper or plastic film, by litho, flexo or gravure – all match as they’re supposed to. PantoneLIVE might make bargain bins of neglected goods with suspect labels a thing of the past.

The UK-based subsidiary of food giant HJ Heinz Company recently used PantoneLIVE to tie together a supply chain of European companies involved in its labels and packaging. “Across all of our packaging formats, we saw a reduction in colour variance of 50 per cent and saved time by establishing one colour target that can be applied to all our Heinz Beanz designs,” said Nigel Dickie, director of corporate and government affairs for HJ Heinz Company Ltd. “The results with our Beanz packaging have been so remarkable that we plan to extend PantoneLIVE to additional

Nearly two-thirds of adults will question the quality of a product they are interested in purchasing if the packaging is discoloured Base: All respondents (n=1000) Q3. If the packaging for a product you’re interested in purchasing is discoloured, how likely are you to question the product’s quality?

Very likely

Somewhat likely

Somewhat unlikely

product lines, including Heinz soups and Spaghetti Hoops.”

Colour plays a greater part in our purchasing decisions than most people realise. A study by the Pantone Color Institute in Carlstadt, New Jersey, indicated that more than two thirds of consumers take the colour of packaging into consideration before making a purchase,

Very unlikely

I would never purchase a product with discoloured packaging

and more than half will reach past the first product on the shelf if its packaging appears discoloured. About 65 per cent of respondents in a Pantone survey of 1,000 people conducted in December also said they would be likely to question a product’s quality if its packaging were discoloured.

With so much at stake, it’s small wonder

that professionals involved in the design and manufacture of packaging are so concerned with colour consistency. Another study by the Pantone Color Institute indicated that about half of creatives who are responsible for colour specifications built extra time into their projects to account for errors in colour accuracy and consistency.

The survey also showed that at least half expected to take a minimum of two rounds of reviews between design and press to get colours right. Pantone and X-Rite developed PantoneLIVE to reduce or eliminate the need for these buffers.

Companies can use PantoneLIVE to access digital standards that represent their customers’ desired colours. PantoneLIVE offers libraries of colour data, software that integrates colour information with solutions in the workflow stages, an interface to allow third-party software to connect to the PantoneLIVE cloud, and sophisticated colour-management technology.

The digital standards can be accessed anywhere, any time and by any stakeholder – designer, specifier, printer or ink manufacturer – who has obtained an access licence from Pantone and rights from the brand owner.

The system has been developed in partnership with Sun Chemical, the world’s largest supplier of printing inks.

For more information, email pantone@pantone.com Call +1 201 935 5500

Business Reporter · April 2012

6

an independent report from lyonsdown, distributed with the daily telegraph

Print

From the Bible to the e-book Hold the front page… the printing industry isn’t quite ready to give up the ghost yet. In fact, it’s reinventing itself for the digital age

By Nick Martindale When news broke in March this year that the Encyclopaedia Britannia would in future only be produced in digital format, it seemed another milestone in the decline of the printing industry.

The advent of new technology in the form of the internet, iPads and other tablet PCs and e-books has seen both print volumes and the number of firms in the industry shrink – from 13,600 to around 10,000 over the past 10 years, according to the British Printing Industries Federation (BPIF) – while the emergence of foreign competition and the recession have only served to accelerate this trend.

Unsurprisingly, these pressures have led to decline in the industry. BPIF research in 2010 found the industry had 10,500 companies, employed 140,000 people and had an annual turnover of £14.3 billion. The biannual survey has yet to be completed for 2012, but estimated totals suggest all three indicators have fallen, to 10,000 firms, 133,000 employees and £13.6 billion turnover.

These figures will come as no surprise to David Monks, sales and marketing director at Paragon Group UK who has experienced the twin pressures of increasing focus from customers on price and

Print: myths and reality Stephen Overell sorts the facts from the printing fiction “18 to 25-year-olds are unresponsive to the printed word” People aged 18-24 are 18 per cent more likely than the general population to have bought or ordered something as a result of receiving direct mail – exactly the same percentage as the over-65s, as it happens. (TGI) “Direct mail is junk mail that gets binned unopened” Between October 2009 and March 2010 an average of 92 per cent of direct mail was opened, including 99 per cent for personal banking and 96 per cent for supermarket mail. (Billetts) “Digital media is increasingly democratic” True.

But digital disenfranchisement remains significant.

Some 58 per cent of those over 65 and 46.6 per cent of those in socio-economic group “E” (unskilled) have not used the internet in the past year. (TGI) “People hate receiving marketing mail in the post” In a survey of 2,000 adults, 75 per cent agreed they liked receiving special offers and promotions by post. Some 61 per cent said they liked receiving information from companies they were already customers of. (TGI Postscript) “Digital is the most effective medium” A complex controversy, but Fournaise Marketing Group’s 2010 Global Marketing Effectiveness report claims traditional ads give a 5 per cent better return on investment than digital ads. (Fournaise)

rising production costs. “The industry is very sensitive to raw material price increases,” he says.

With everyone sensitive to cost, the pressure is on to print in smaller quantities, which can have knock-on effects for suppliers, too.

Tim Bowler is director of the National Association of Paper Merchants, an industry directly dependent on the printing sector. “We’ve seen a 22 per cent fall in actual tonnes of paper used by the printing industry since 2008 to the end of 2011,” he says.

“There isn’t the use for paper for junk mail anymore because paper has become more expensive and advertising and marketing are the first things that get hit in a recession.”

With the printing industry facing such challenges, the decision in February by the London Organising Committee of the Olympic Games (LOCOG) to award the £16m contract for printing London 2012 tickets to a US firm was widely condemned. At the time, the Unite union described it as “a slap in the face, a kick in the teeth and a two-fingered salute to print workers and businesses in the UK”, pointing out that many in the industry had lost their jobs over the past four years.

According to BPIF chief executive Kathy Woodward, social considerations that can be taken into account when awarding Olympic contracts meant LOCOG had every opportunity to award the contract to a UK firm. “Many countries out there that are far more protective of their local industries, whether print or anything else,” she says.

Monks points out that plenty of UK businesses had the capability to produce the tickets, including the associated security requirements. “Paragon does a lot of event work,” he says. “We’ve done the Ryder Cup in the past, producing both physical and electronic tickets. When the technology and capability is available in the UK, it’s a bit of a quandary as to why that went overseas.”

The government could also do more to support the UK print industry in its own procurement processes, suggests Sidney Bobb, chairman of the British Association for Print and Communication (BAPC). “Government printing now goes through one print management company and if you’re not on the list of that company, you don’t get the business, even if you’ve been satisfying government needs for a period of time with no problems whatsoever,” he says.

Despite the pressures, though, most believe that print is evolving rather than simply disappearing.

It appears to be finding its place – in the marketing and advertising arena, at least – as just one of a multitude of channels through which businesses can reach their target markets. Research by marketing production firm Charterhouse, for example, suggests 70 per cent of marketers use printed media to interest audiences in online content, often with the aim of driving extra traffic to a website. Augmented reality and QR codes are also playing a role in a more joined-up approach, suggests Anthony Hawkins, Charterhouse’s new

business director (see innovation, page 15).

This is something Ian Simpson, managing director of Catalogues4Business, has seen as well. “Our recent research has highlighted that businesses still see catalogues, and direct mail in general, as an important part of their marketing mix,” he says. “While many customers will place their order online or by tablet or smartphone, the trigger to that is very often a catalogue or piece of direct mail.”

The BPIF’s Woodward points out that some 9m people don’t use the internet at all, and that the government for one clearly sees the value of printed media with high-profile campaigns around bowel cancer and self-assessment. Just

“While many customers place their order online or by tablet or smartphone, the trigger is very often a catalogue or piece of direct mail” – Simpson as significant, though, is the idea that even those who might be assumed to be more attuned to digital media tend to respond well to printed communications. “If 18 to 25-year-olds get a direct mail shot through the post, their take-up rate is actually quite high,” she says.

The industry itself is evolving, too. The BAPC’s Bobb says many firms have moved into providing a range of services for clients that go far beyond the conventional image of the industry. “We’re changing from being a production industry to a service industry,” he says.

“One of our members has about 40 or 50 staff and does traditional litho and digital printing, and the most profitable element is program-writing for his clients. He’ll write programs, create DVDs and CDs and distribute them. Packaging has

also become very important for him.” The BPIF, meanwhile, estimates that around 25 per cent of a print company’s income now comes from non-print sources.

Smaller and more nimble operators have also emerged, with the internet allowing them to compete with larger players based in the traditional areas of the South-East, the Midlands and cities such as Leeds and Manchester. Online business Printed.com, for instance, has seen increase in sales of more than 100 per cent over the past year on the back of online orders and digital printing technology, according to founder Nick Green.

There are other reasons for cautious optimism, too. Changes in labour rates in places such as China and the Far East, coupled with higher transport costs and fluctuating exchange rates, mean sending print jobs abroad is less economically attractive than it once was.

Customer demands for lower volumes and more personalised communications – as well as tighter turnarounds – are also playing into the hands of local printing, says Martyn Eustace, director of industry pressure group Two Sides.

“People don’t want to print 20,000 books any more – they will print one if necessary – so the big chunky orders that used to go overseas are coming back,” he says. “The cost of having remains of stock and out-of-date supplies is far greater than having somebody locally who can do a very good job very quickly.”

The print industry may not be quite what it was even two years ago, and is never likely to return to its pre-internet heyday. But as part of a wider industry, rumours of its demise have been greatly exaggerated. “Putting words on paper has meant everything to the civilised world, from the Dead Sea scrolls right up to the Ikea catalogue,” says the National Association of Paper Merchants’ Bowler. “It’s certainly not going to go away overnight.”

Business Reporter · April 2012

an independent report from lyonsdown, distributed with the daily telegraph

7

Print UK advertising expenditure 2009, % share of £15.7 billion

Turnover share by product sector

direct Mail

other printing

10.7%

internet

24.2%

17%

outdoor and transport

5.4%

radio

advertising literature + event programmes, tickets etc.

printed packaging and labels

2.8%

34%

14%

cinema

1.1%

press

29.6%

television

newspapers, magazines, books, brochures etc.

security printing

5%

26.2%

30%

Source: British Print Industry Federation

Source: Advertising Association

The UK is the fifth largest printing country in the world USA

Consumers’ environmental perceptions of print & paper 198

Japan

What’s the most environmentally friendly way to read?

99

China

Electronically

On Paper

Newspapers

67%

13%

Book

52%

28%

Magazines

62%

17%

Mail

71%

10%

59

Germany

41

UK

33

India

16

0

20

40

60

80

100

120

140

160

180

200

Source: Pira International

Worlds fifth largest producer of printed products

Marketing and sales

£14.3 billion turnover 10,500

companies

£6.4 billion

gross value added

140,000

employees

£1 billion

of positive trade balance in 2009

£700 m

capital investment in 2008 Source: British Print Industry Federation

Emergence of digital printing Worldwide production-led printing revenue 2000-15 (€ billion) 2000

2005

2010

2015

Copying (office)

59

29

19

12

Digital

51

139

189

220

Flexo

92

98

87

74

Sheetfed offset

189

140

119

99

Commercial web

182

155

142

129

Newspaper

212

144

131

106

Gravure

101

70

60

49

886

775

747

689

Total

Source: Two Sides

Source: Pira International

Print continues to drive sales for businesses of all sizes. Research into the marketing habits of 123 UK firms shows that 78 per cent sell directly through sales catalogues, 54 per cent still use brochures, 62 per cent direct mail and 34 per cent point of sales literature. More than one in three firms also reported that half their sales were generated directly through a sales catalogue.

However, the research also shows that print is just part of the sales and marketing mix – it’s not an alternative to telesales or digital marketing. For example, companies that use sales catalogues are almost three times as likely to have an e-commerce website in their list of top sales tools.

The research, conducted last year by Catalogue 4 Business, also offers a fillip to direct mail. One in three businesses say that email overload means post now has more impact. However, businesses

are not entirely happy with their print collateral. For example 51 per cent of firms are unhappy with their sales catalogue’s performance and 33 per cent are keen to reinvigorate it.

Make the most of catalogues

•T he back cover is a key selling page – use it to it’s maximum • Don’t forget calls to action to get people to open the catalogue •C arefully designed order forms can drive further sales • Ensure order-line numbers are prominent

Which sales tools does your firm use?

Brochure

54%

Direct mail (via post)

62%

Sales catalogues

78%

Email marketing

82%

Social media

53% Source: Catalogue 4 Business

Business Reporter · April 2012

8

an independent report from lyonsdown, distributed with the daily telegraph

Industry view

High performance at a low price Industrial inkjet printing systems are becoming more capable and versatile to use It’s quick, it saves material and prints with brilliant results: the digital MonoCube inkjet printing system from Graph-Tech AG in Oftringen, Switzerland, is being unveiled at the Drupa fair in Düsseldorf, the international fair for the printing, pre-press and bookbinding industry.

The MonoCube performs high quality singlecoloured double-sided printing on paper webs of 520mm to 780mm at a speed of up to 150 metres

“Digital printing systems can be perfectly tailored to the client’s needs in terms of printing width and colour quality” – Simmen per minute – statistics that certainly impress industry specialists.

It is perhaps not surprising that this machine has been made by Graph-Tech. The firm has made a name for itself not only as a specialist in digital printing systems, but also as a developer and manufacturer of controller systems, which are mainly employed in variable image printing in the graphic and mailing industry.

It is the high levels of uniqueness that make these solutions stand out. “Graph-Tech’s digital printing systems have a modular design and can be easily integrated into existing and new systems,” says Reto Simmen, business operations manager

Print power: from a new range of printers from the GT-Jet GL1200 series

at Graph-Tech. “This way, digital printing systems can be perfectly tailored to the client’s needs in terms of printing width and colour quality, and thus to a particular market sector.”

Drupa visitors can go and see this for themselves, as the company will be presenting numerous innovations around inkjet printing.

Over the years Graph-Tech has gained

experience in a large number of digital printing projects, in industries such as graphics and mailing,machine construction and wood and metal processing, and this has undoubtedly paid off. One important area, however, has remained strong at the company: the market for printing variable data such as addresses, codes or numbers.

Simmen says: “At Graph-Tech we can create a

combination of our expertise and know-how on the design of controllers and individual printing systems, allowing us to put forward innovative solutions.”

The company is offering a whole new range of printing systems in addition to the MonoCube, named as the label GT-Jet GL1200 Series. Thanks to the modular assembly system, technology can quickly be adapted to any conceivable requirement – from simple 108mm single-coloured printers to complex 1,300mm four-colour systems. The machines print 600 x 600dpi in up to four shades of grey in the highest quality – all at speeds of up to 75 metres per minute.

Since its foundation in 1989, the company has continued growing thanks to its ever-evolving technology and strategic partnerships. For example, British firm Domino Printing Science has a share in Graph-Tech and the company does not rule out any future partnerships in the sector that are financially robust and innovative.

According to Simmen, the be-all-and-end-all is technological development in digital printing, and that ultimate goal is a long way away yet. There is still a lot more innovation to come from this clever little Swiss technology firm.

Reto Simmen is manager of business operations.

For more information, email info@graph-tech.ch

Business Reporter · April 2012

an independent report from lyonsdown, distributed with the daily telegraph

Print

We’ve still got mail

Hey, big spenders So which sectors are splurging most – and benefiting most – from print?

Don’t believe all the tales of doom and gloom. Some areas of the printing industry are thriving – and it’s all about getting closer to the customer

By Stephen Overell “Print understanding it not what it used to be,” says Martyn Eustace, the boss of PrintPower, a print industry campaign to boost the printed word in a “multi-channel universe”.

To assume the decline of newspapers and magazines is indicative of everything printed on paper is misleading – other, albeit less glamorous, consumers of print are doing well, he says. Business communications and paper-based displays are thriving, for example.

According to the Institute of Practitioners in Advertising’s Bellwether Report in 2011, against a gloomy backdrop in ad land, there were two channels that reported an increase in budgets – digital and direct marketing. Some 17.7 million people bought something from a mail-order catalogue in the previous 12 months.

And it seems more rather than fewer firms are turning to direct mail. Research firm Nielsen says that in 2007, 1,928 firms used direct – some call it “junk” – mail. By 2009 that figure had shot up to 2,591. Response rates are also up.

The number of people who said they had acted on a piece of direct mail or planned to in the imminent future rose from 4 per cent in 2004 to 5 per cent in 2010. The return on investment from direct mail has more than doubled since

9

2006. When used alongside TV campaigns, it boosts the returns from those campaigns by 37 per cent, according to the Mail Media Centre, the Royal Mail website on direct mail.

Meanwhile, the good old poster is alive and well, too – accounting for £6 out of every £7 spent on outdoor promotion. Three-quarters of shop owners say posters are the main influence on what sells.

At Boden, the quintessentially bourgeois mailorder clothing retailer, the catalogues dropping on the mat remain a mainstay of the business model.

“It’s the best way to excite the customer and show them our products in a handbag-size, portable

The good old poster is alive and well, accounting for £6 out of every £7 spent on outdoor promotion device – one that doesn’t need charging up and isn’t afraid of being taken into the bathroom,” says Claire Gibbon, head of catalogue and online production.

However, the company thinks its dependence on printed forms will diminish as tablet devices and mobile phones continue to develop. Gibbon says Boden is now experimenting with more

personalised printing that draws on customer data – and pushes them to shop online. A royal wedding-themed mail campaign imagined the joining together of the label’s founder Johnnie Boden with individually named customers, and used information on items they had bought in the past to guide its matchmaking.

Even so, printed words and pictures appeal to the senses more than other forms, she thinks.

Receiving something directly into the home is more “intimate”. “The test is whether people would rip it out and stick it on the fridge,” she adds.

Fraser Church, head of marketing at communications company IOS, argues that customers are using print not just to reinforce integrated media campaigns, but also to target customers more accurately. The days of the “carpet bomb” mail shot are over, he reckons.

Insurance firm Aviva has replaced its A4 printed investor statements with personalised colour booklets listing only the funds clients are invested in, and containing market commentary and details of how much of a client’s ISA allowance is unclaimed. Several universities are also tailoring their prospectuses to meet the different needs of students come from the UK or abroad, Church adds.

BT tops the list of the highest spending firms on direct marketing, lavishing £31m between February 2011 and January 2012 – narrowly eclipsing rival Virgin Media on £30m, according to research firm Nielsen.

The plus-size clothing firm JD Williams comes third (£28m), while seniors services firm Saga comes fourth (£23m). Perhaps surprisingly, Tesco comes lower down the list, spending £16.9m.

In terms of the commercial sectors that have become the heaviest users of direct mail, Nielsen lists the top 10, in order, as: mail order; financial services; government and social organisations; retail; travel and tourism; telecoms; the pharmaceutical industry; media; the automotive industry; and household equipment and DIY. However, spending a lot is not the same as reaping the biggest benefits. Here the order is different: telecoms firms, for example, are generally less successful in their direct mail activity.

The chart below shows a breakdown by sector of “customer intentions”, meaning the customers who take action or say they will as a result of direct mail, according to the Royal Mail’s Mail Media Centre.

Chris Combemale, executive director of the Direct Marketing Association, says major retailers have led the way on integrating print in multichannel marketing via loyalty cards and promotions.

“The destination may increasingly be online, but the journey starts offline,” he says.

Sector

% took action

Retail

19.8

Manufacturing

14.3

Publishing

11.2

Charity

10.6

Government

7.3

Leisure

7.1

Education

5.9

Other

5.7

Health

5.4

Social

4.6

Mail order

3.2

Utilities

2.7

Travel/tourism

2.2

Financial

2.1

Telecoms

1.1

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Business Reporter · April 2012

10

an independent report from lyonsdown, distributed with the daily telegraph

Industry view

Get the bigger picture with cross-media There’s more to print than just printing. A profitable and bright future in the industry lies ahead for those willing and agile enough to combine their offline and online capabilities If print got a school report, it would say: “Plays and works well with other media.” This was the remark made a few years ago by leading printing industry commentator Professor Frank Romano.

Over time, his perception has become more and more relevant as print has continued to hold its prominent position alongside broadcast, online, mobile and social media. So much so that it should be the mantra of every print service provider (PSP), permanently displayed to remind both staff and clients that print plays a vital role in releasing the potential of other media.

Cross-media—the combination of multiple channels from which marketers are increasingly creating campaigns—may be a relatively recent phenomenon but it’s set to be around for a long time. And because print is such a key component of campaigns, there are enormous opportunities for PSPs to build a profitable future on innovative, higher-margin products and services. But grasping the opportunities in a changing industry means everyone involved in printing must make changes — in business models, business practices, and mindsets. As a result, the boundaries between the traditional roles of marketers, printers and suppliers of production print equipment and solutions are softening, and new collaborative relationships are emerging.

At Canon we have a tradition of doing this via educational, consultancy-based initiatives such as the essential business builder program, to which we are adding a new cross-media module and a series of independent, in-depth insight reports on the trends and outlooks for different market sectors.

The potential for print and PSPs in cross-media is confirmed by the latest Canon Insight Report— The Bigger Picture—which explores the attitudes to print of senior decision-makers in European corporates and marketing and creative agencies, and looks at what they want from PSPs. Most are confident of the effectiveness of print, with 71 per cent perceiving it to be equally effective or more effective than any other type of media in the communications mix.

Respondents cite print’s proven effectiveness as one of the key drivers of its anticipated future growth, especially as a support mechanism for

Canon Insight Report: the figures

71%

of executives believe print is equally or more effective than other media

90%

of respondents regard print as important to their organisation

20%

cite print quality as the key priority when choosing a PSP

Canon points to multiple media use for businesses to become more innovative

online and cross-media. Cross-media combines communication channels, exploiting the particular strengths of each channel in integrated campaigns where the impact is greater than the sum of the parts.

Key features of cross-media are interactivity and personalisation—they enable businesses to conduct one-to-one conversations with clients across the different channels, track interactions and use each response as a trigger for a further interaction. In this mix, personalised print is increasingly preferred to email, whose effectiveness has been cut by the growth in bulk email, and is used to start, continue or close conversations – sometimes to do all three. For example, direct mail and QR codes: customers might be addressed via a personalised item of direct mail, but asked to access a website by scanning the printed QR. For PSPs, the argument for adding cross-media services is irrefutable—they provide a proposition to clients’ marketing departments and open the way to more lucrative, value-added work. But if print’s future role will be in combination with other channels, PSPs have to understand those media—their strengths and weaknesses, when they work well with print, and when they don’t.

So where do they start? First, they have to go digital, because only digital printing enables personalisation, or the “print run of one”. But buying the press is only the beginning; they must also buy into a new mindset, becoming consultants first and salespeople second. It takes a bit of getting used to, but it’s what marketers say they want from their print supplier.

This isn’t hearsay. One of the conclusions of Unlock The Value of Creative, a global study from

the Chartered Institute of Marketing and Canon Consultancy Services, was that many marketers are “struggling to adapt campaign processes to suit the pace of digital channels and applications”.

Meanwhile, the latest Canon Insight Report confirmed the need both for print—regarded as important to their organisation by almost

Cross-media combines communication channels, exploiting the particular strengths of each channel in integrated campaigns where the impact is greater 90 per cent of respondents—and for PSPs to sharpen up their act. To illustrate, 30 per cent of the respondents were unaware of print-ondemand, 32 per cent knew nothing of the scope of short-run publishing and almost half were not using customised direct mail.

This explains why the role of the supplier is changing, to provide PSPs with a host of support services besides digital hardware and software.

Where the conversation between supplier and printer used to be largely about specifications, today it’s more likely to be about ideas.

At Canon, we believe it helps our customers that we bring a breadth of understanding to the table —from image capture to data management to high-volume and large-format digital output.

An example of the potential of this end-to-end

expertise is a recent cross-media project in Norway with musician and fashion icon Maya Vik. Still images and video were captured on Canon EOS cameras. An Océ Arizona flatbed printer created 2m x 3m photographs on 1cm-thick Plexiglas. And a Canon imagePRESS 7010 printed 500 photobooks for distribution with Vik’s 12inch vinyl LP. This scope is turning out to be precisely what the professional print market needs to take part in the emerging cross-media world, and it has been reinforced by Canon acquiring Océ to offer PSPs the broadest portfolio of solutions and technologies. This unique standpoint is why Canon has chosen “The bigger picture” as our theme for drupa, to show that there is more to print than printing.

As the world’s leading printing equipment exhibition, drupa has always been the show where the industry comes to see the bigger picture — where the print business is, how it got there, and where it’s heading. Until the last decade or so, that bigger picture was mostly filled with technology to put words and images on paper, but at recent drupa shows the bigger picture has steadily grown.

The role of major suppliers is to help customers explore the opportunities that open up to a new business, understand the changing market for print and take advantage of opportunities to secure a profitable future for their business.

David Preskett is director of professional print at Canon Europe 0208 588 8000 www.canon-europe.com/drupa

Business Reporter · April 2012

an independent report from lyonsdown, distributed with the daily telegraph

Print

11

A service that’s tailored to fit Having shaken off its image of decline, the UK print sector is now one of the most innovative and efficient in the world – and has reinvented the way it works with its customers

By Nick Martindale Against a background of recession, the challenge for the traditional printing industry has been huge. The sector has had to reinvent itself as a provider of a range of services, not just print, while finding a way of offering products and services that embrace the internet, rather than exclude it.

Take commercial office products and services supplier OfficeTeam. “Traditionally the focus of our stationery business was on business cards, letterheads, forms, and so on,” says head of new business Andrew Borrill. “Now the value is with marketing and communications print which has to be of superb quality, personalised and sent out quickly from a dedicated database.”

Because of the huge cost of keeping abreast of modern print technology, OfficeTeam decided to divest itself of its in-house print operation and seek out strategic print partners to service local markets around the country. “As well as providing the latest technology, we look to our print partners like Precision to deliver a high level of customer service,” Borrill says.

“This means not only coming up with innovative ideas but being aware, for example, that their output must be fully compliant with our clients’ brand specifications.”

It’s all about embracing the new opportunities, according to Jane Cahillane. She’s head of print production at Dewynters, the advertising, marketing and design agency for the arts, sports and live entertainment sectors. “The advances within the industry, from traditional lithographic and screen processes to the burgeoning digital technologies, have afforded us as a supplier the opportunity to offer a range of products and services that were, 10 years ago, either

prohibitively expensive or simply not possible in the time available,” she says.

“From a creative point of view, we can help our clients realise their artistic vision thanks to the introduction of new materials and technologies – they are continually pushing for bigger, better more original print solutions. Recent advances mean we can offer cutting-edge technologies, using the latest market solutions at extremely competitive prices.”

Today’s successful companies are all highly IT intensive and innovative, but they approach

“From a creative point of view, we can help our clients realise their artistic vision thanks to the introduction of new materials and technologies ” – Cahillane their business in different ways. Some have gone down the road of specialisation while others have become fully-fledged “integrated marketing communications” operations.

Along the way they have embraced the latest in printing technology and data management to compete with the cost and speed advantages of electronic media. By utilising digital processes to tailor printed material specific to individuals, it has been possible to meet customer demands and shorten high speed print runs down to “one at a time” production.

Precision Printing is one example of this. After listening to its customers, the business moved into digital printing in 2005 and had tripled its turnover to £14m by 2011. “In 2005 we might take 50 litho orders a day with an average value

of £550,” says managing director Gary Peeling.

“Today, on top of the litho business we take more than 10,000 digital orders a day, but the average order value is £2.30.”

His customers want him to print lots of small and short orders at “very low cost, at a high quality and quickly”.

Precision has developed a dynamic printing process for clients, triggered by data input or by an order via the web. “It is possible to link output directly to a company’s systems to trigger an automatic print event using data that is five minutes old to produce an instant physical response that customers enjoy. Print on demand is growing incredibly quickly,” says Peeling.

IOS (Innovative Output Solutions) is a variable colour digital printers and provider of direct communications services, including direct mail and marketing campaigns, e-marketing and communications, bills and statements and e-billing. According to chief operating officer, Andy Young, the pressure is always on to get closer to clients and understand their needs.

“We are no longer talking about print in isolation – it is just one of the output channels we offer,” Young says. “We have had to become channel ‘agnostic’, embracing e-solutions, too, including email, SMS and personalised websites.

We have to talk the same language as the client and have the appropriate tools in the toolbox.”

Ideally, IOS gets involved as early as possible with the client to understand what it is trying to achieve, and then suggests methods of communication that will be most effective and cost efficient. “We ask, ‘how can we help you solve your business problem?’ Then we produce a solution…. and there may be some print work at the end of it,” Young adds. continue on page 13

What do customers want?

We look at business-to-business, the consumer needs Customers in the business-to-business sector have come to realise that print can play a powerful role as part of a wider communications strategy, according to Liz Tubb, director of procurement and production at creative communications agency TMW. “It’s no longer a case of ‘should we print or should we send an email?’” she says. “Marketing campaigns are now cross-media and multi-channel.

But print still delivers great return on investment when it’s used well.”

Emily Keogh, managing director of Palm PR, says her clients have different attitudes to getting coverage in the online and printed media. “Online coverage is often more valuable as the articles can direct traffic directly to their e-commerce site,” she says. “But there are some publications that have huge influence through their print versions but have websites that aren’t widely read.”

In business to consumer, too, print can play a valuable role even in an age where iPads, tablet PCs and Kindles are fast becoming the norm. Research by industry body Two Sides into perceptions of print in Europe and the US found that 80 per cent of consumers prefer reading from paper than on screen.

However, Colin Bennett, who spent 30 years working as a director of print and publishing businesses until he moved away from this to create publishing software firm Abannan, believes that tablet PCs are the medium of the future. “We are seeing a revolution in publishing technology that far outstrips anything that happened in the 1980s and 1990s,” he says. “The migration of readers from print to tablets will undoubtedly accelerate.

Business Reporter · April 2012

12

an independent report from lyonsdown, distributed with the daily telegraph

Industry view

Print your way to success

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READ THE NEW-LOOK BUSINESS TECHNOLOGY

4 Page

In the cloud

11 Page n les o ew ru ave n s s n o m i i s at U cla ould egul ling c The E d and r n £2bn s a e y l h Ru earl n data s s e busin

012 ats 2 Thre

What the CEO should know Ian Cohen, CIO of Jardine Lloyd Thomson offers his advice

For and against … social media Is it really the way to get close to customers?

Plus all the IT news, views and opinion that senior managers need this month Lyonsdown.co.uk

You can expand your output moving into exhibition graphics, POS materials, labels, floor graphics, packaging proofs, signs, window graphics and more…

Produce printed products for indoors or out… wide format print is highly durable.

For copies of this report, email info@lyonsdown.co.uk trics ome

In The Sunday Telegraph on 27 May 2012

Will cloud technology make your IT department redundant?

You’ll grow your business… think of the cross-selling opportunities you can exploit. Wide format buyers need commercial print too

ho’s s–w t s i ar? v i is ye ckt h a t h s o m ers t syste hack your k c From a tt g to a goin uk t.co. epor r h c bizte

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Bi

Business Reporter · April 2012

an independent report from lyonsdown, distributed with the daily telegraph

Print The UK is now considered a mature market for this holistic approach to communications management and one that is, in many ways, ahead of the game globally. IOS, for example, is in the process of exporting its UK model to the US. Meanwhile, specialisation has been the route to success for North Yorkshire’s Ryedale Group.

According to marketing director, James Buffoni,

this family firm saw the writing on the wall in the 1980s. “Basically it was realised that to develop the business we needed to talk with our customers,” he says.

Out of this dialogue came the company’s core specialism – printing on to plastics for plant labels and plastic cards. “The process involves highly engineered ink and substrates. It is product engineering, not just printing, and that’s where

our business has been ever since. Now we are not printers, we are communicators in niche markets.”

He believes the way forward is to link print with electronic technologies and select the most relevant communications route for his customers: “We have to be open minded, seeking out whatever technology is appropriate and packaging it up for the clients. Print on its own is just a commodity.”

Thinking green Why printing really doesn’t cost the earth The print industry is fighting back - not only against tough trading conditions but against the misconceptions that surround its environmental credentials.

Industry pressure group Two Sides was set up in 2008 with a view to challenging some of the rhetoric used by companies wanting to encourage customers to switch to online billing and statements.

“All our surveys show that the public believe that in some way print media is responsible for damaging the rainforests and this is very far from the truth,” says director Martyn Eustace. “Of the pulp we use to make paper, 80 per cent comes from within Europe and the forests there are 30 per cent bigger today than they were in 1950.

“They also think print media is wasteful because of terms like ‘junk mail’ - but the recycling rates for Europe are about 69 per cent and in the UK it’s 79 per cent. It’s one of the best performing sectors.”

Increasingly eco-aware print companies are playing a role in helping customers improve their sustainability around printing, suggests Marcus Timson, director of the EcoPrint show.

They do this by advising them on grades of paper,

print methods and at ever stage of the print process. “The reality is that print’s old image isn’t true today,” Timson says.

“The advantage with digital, for example, is that you print what you need when you need it, and you don’t have to do half of the processes you used to have to do with analogue.’

The packaging industry comes in for even more grief. Despite its economic importance (it boasts annual sales of £10bn and employs 85,000 people), it is an easy target for politicians and the green lobby.

When many of us think about packaging we think of branded plastic bags at supermarkets or over-packaged items full of plastic and cardboard, designed and printed to grab our attention.

However, the packaging industry has also been responsible for many innovations; plastic bottles and tubes; child resistant items; pharmaceutical packaging; oven-proof and microwaveable packaging; chilled and frozen food packaging.

Furthermore, less than 20 per cent of household waste is packaging and less than 5 per cent of packaging ends up as landfill.

No surprisingly, retailers are also keen to cut the costs and volume of packaging – Tesco, alone spends £600m on it. However, it’s not going to be quite that easy. Beautifully printed packaging serves more than a marketing function – it also keeps our food and other goods fresh and undamaged. In many cases it saves money by keeping a product in peak condition until used or consumed. For example, according to the Packaging Federation in less developed countries, that lack the UK’s distribution and packaging systems, as much as 50 per cent of food never reaches consumers.

13

From printer to service provider A move into data management and processing has kept one business ahead of the game

It has been quite a journey for Leeds-based Communisis. The former general stationery printer has transformed itself in recent years into one of the leading “marketing services providers” – helping clients to improve the effectiveness of the whole process of communicating with their customers.

“We have moved some way from our traditional heritage,” says group managing director Dave Rushton. “But with the very real challenges faced by the whole industry we had to ask ourselves how we could ensure print remained relevant in such a dynamic environment.”

The answer for Communisis was a move into data management and processing. “We had to find a way to add value to a static, generic format and move to highly personalised and relevant communications, improving targeting and increasing responses,” says Rushton.

The company, therefore, developed the capability for providing sophisticated bespoke direct mailing services, able to target individual customers. It links its expertise with the clients’ operations to enable start-to-finish management of their campaigns via different media channels.

Today, the company specialises in marketing campaigns, targeted mail-outs and email marketing.

Employing 1,300 staff across 10 locations in the UK, it produces around 5m personalised communications every day and last year profits grew by 19 per cent to £9.4m. Its customer list includes Boots, Virgin Money (Northern Rock), Nationwide and Proximity London.

What makes this possible is the company’s investment not only in the data side of the business, but also in high volume digital production technology. Around £30m has been invested in new equipment in the past few years. In March, Communisis announced that a further £10m is being committed to two new colour digital press lines.

“We must look ahead to make sure we have the right technology and flexibility to meet our clients’ individual requirements,” says Rushton. “Modern digital technology gives the speed of response that enables us to manage the huge variability required in bespoke communications.”

It’s not all about technology, though.

Communisis is keen to get customer views to help it improve its business and employs on-site teams with 11 customers across the UK and Europe. “By embedding with our client organisations we can help them tune in to the services we offer, advising on the most effective channels for communication or methods of production and output, so that we can deploy the technologies that drive efficiency,” Rushton adds.

Steve McCormack

Business Reporter · April 2012

14

an independent report from lyonsdown, distributed with the daily telegraph

Industry view

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Business Reporter · April 2012

an independent report from lyonsdown, distributed with the daily telegraph

Print

15

Reinventing the wheel You have to speculate to accumulate and the print industry is looking to innovation to secure its future. But what does it mean for customers?

By Trevor Merriden

Probably the world’s leading expert in printing and publishing is in no doubt about the importance of innovation. In the run-up to trade printing exhibition Drupa in Dusseldorf next month, Frank Romano, Professor Emeritus at the School of Print Media at the Rochester Institute of Technology in New York State, has reminded everyone that: “It is the technology that will create the new business for printing.”

The issue is whether printing businesses can provide their clients with the full potential that the technology undoubtedly offers. The future that innovation will provide is most likely to benefit larger customers with deep pockets. It won’t mean more print from the printers, however, but highly personalised, highvalue print runs.

Freddie Kienzler, managing director of Essex-based printer Formara and deputy chairman of the British Association for Print and Communication (BAPC), agrees with Romano up to a point. Printers have had to move quickly, he says, to keep up with innovative opportunities: “You have to look at every angle these days, because you simply cannot just do what you’ve always done.”

The changes have already been dramatic: customers are only prepared to pay 10 per cent of what certain jobs were priced at back in the late 1970s. Kienzler points out, however, the costs of printing are still increasing. “You have to get the rest back through productivity – and that means a relentless focus on innovation,” he says.

Some technological innovations have, of course, affected far more than the world of printing. And online developments have opened the eyes of the industry’s clients. As Nick Jung, a course director at the London College of Communication (formerly the London School of Printing), notes: “Technology has moved us rapidly from ‘print then distribute’ to ‘distribute then print’. Local editions of global newspapers now proceed with transport costs more or less wiped out.”

If consumers of print are to realise the potential of innovation, they may have to look around at what is possible from their peers’ activitives, rather than asking their suppliers. Kienzler thinks that some industryspecific innovations have moved too far ahead of the comprehension of many printers: “To be fair, many of the printers don’t really understand what they’re being sold by the equipment manufacturers.”

And if the printers don’t understand the innovations, how will the customer understand their explanations?

The technology is really powerful, says Kienzler, but printer and customer alike have to stop themselves and bring it back to a simple question: “Yes, it’s great, but how is it going to make more profit and productivity?”

Variable data printing (see box), is a case in point.

It has huge potential for businesses, Kienzler says, but isn’t for everyone. “The technology is out there for

companies to [have printers produce] one-off variable booklets for customers. That works well for larger businesses, but not for those with less scale,” he adds, The problem can be that the customer and other suppliers don’t want to make potentially valuable changes because of the complexity of bringing in personalised data. Kienzler once invited a client and its ad agency to discuss how best to make the most of the personalisation that variable data printing provides.

The meeting, he says, never took place: “It just didn’t happen – it was seen as too complicated.”

Mike Warne, operations manager at Syncoms in Middlesex, a specialist in high-quality corporate print and digital printing, agrees that UK businesses have not been good at making the most of variable data innovations in the past.

“Sadly, many think variable data simply means putting a different name and address on the front of

operators. “Digital technology has developed to such a degree that the crossover point where litho is more cost-effective has increased significantly,” he says.

Burnley-based Peter Scott Printers responded to customers by investing in offering an upmarket service. “There is still a big demand for quality print work,” says commercial director Joanne Moulding.

“Our approach has been to look at areas where we can add real value.

“This has included investment in specialist finishing equipment for foil blocking and embossing, encouraging clients to actually increase the cost of the product as the extra finishes will generate a better response rate to their marketing literature.”

Innovation is driving the print industry to greater personalisation and quality as one route to profitability.

Some customers are driving their print suppliers, but many remain unaware (along with some printers

the catalogue,” he says. But he has a different view on its potential, even for small print runs. If used properly, Warne believes, the value of the delivery to the client will be “humungous”.

He believes that, in general, it is better for customers to order, say, a 10,000 mailshot with variable material than 100,000 without because the return the client will get on the former will be that much greater. And digital printing means companies can order in smaller volumes, agrees Mike Holyoake, general manager of Graphic Communications Operations at Xerox UK – something which plays into the hands of smaller

themselves) of the potential that innovation now provides.

With the march of technology continuing apace, does Syncoms’ Warne think that this approach is only the preserve of the bigger players? The machinery is certainly expensive, he agrees, but adds: “What is really lacking, rather than anything else, in the smaller printers are the IT skills to make the most of the technology.”

To understand the opportunities for customers, it seems, it is the humans who need to keep pace with our understanding of what the machines can provide.

Print innovation: terms explained Variable-data printing (VDP) is usually used on direct marketing, CRM (customer relationship management) and advertising promotions. It is a form of digital printing that includes elements such as text and images which change from one printed piece to the next, without stopping or slowing down the printing process.

QR (quick response) codes were designed for the automotive industry, but have

become common in consumer packaging.

Smartphones have effectively put a barcode reader in the hands of customers.

Printed electronics is a method that creates electronic enhancement of print and other media. Until recently, printing meant imposing printed patterns on to a material, but with this, electronics or optical inks are used, creating potentially active devices. Printed electronics is facilitating

applications such as flexible displays, smart labels and animated posters.

Augmented reality has only recently become familiar as a term, but has been with us for some time and is finding a use with any service where a business need to explore multiple scenarios with its customers. The process takes a real-life representation of a scene on print or video and adds explanatory data.