Basics of digital printing

A GROWING SEGMENT OF THE PRINT MARKETSBasics of Digital Printing

Mark CupachDirector, National Sales

Todays seminar focuses on the single fastest growing segment of the US print market..digital printing.

Everyone likes to use the word Digital but do you really know what it means when it comes to servicing your customers short run print work?

Is it just short run full color static content ?

Is it high quality color copier work?

Is it run of the mill black toner on white paper work?

Is it full color, highly personalized direct mail jobs?

The answer is YES..its everything we just mentioned, so lets take some time to educate ourselves about the digital print market and how we can sell it.

1AgendaPrint market overviewWhats happened to printThe short run color marketProductsServicesAdding Value to PrintSelling PossibilitiesKeys to Success

The agenda for today will cover a breif overview of the print market in the United States, where the market is now, and where the market is headed.

There are several factors which have a direct bearing on the print market and well explain some of the critical ones.

The short run full color market, as we said, is the fastest growing segment and well outline the products and services that contributing to that growth. Products and services you can sell.

As a distributor, you MUST add value to the products and services you provide. The market has evolved to the point where you are making margins on VALUE, not objects and well outline some value propositions you can sell.

Finally, lets outline some selling possibilities using digital printing and find some keys to success.2Evolution of Digital printing Color Separations Laser Scanners Film Assembly Plate-making Transition to Digital Computer to Plate Digital Photography Internet First Digital Presses Computer to press High speed digital presses merged with finishing PURLS Links to interactive media

Digital printing really started back in the 1970s with the introduction of laser color scanners. The scanners allowed full color images to be separated into cymk values and have images transferred to printing plates.

As graphic arts technology progressed, we could now take those images and digitize them into pixels that we could manipulate on our computer, adjusting the color or even inserting images not in the original photo.

Digital images could now be transferred directly to a printing plated, bypassing the film that was used as the source document for the scanned images.

The first digital presses started to appear in the early to mid 90s with computer to press plating systems. Instead of imaging a printing plate that we had to manually mount to a printing press and then throw away , we could now put the images directly onto printing plates mounted inside the press.

Developing technology has now given these digital presses high speed, great quality and the ability to image ONE printed piece at a time, allowing us to print variable data onto each personalized document.34

Exclusive Report Sponsor4Here is a chart showing the inflation adjusted print market for 2005 thru the end of 2009

2005, 2006 and 2007 showed a closely bunched, no growth print market in the US.

With the beginning of our current economic downturn in December 2007, 2008 Reflected a continuing decline. The start of 2009 continued the decline and the balanceOf 2009 is forecasted to be below the 2008 sales figures.

Current print market5March '09 shipments were $7.67 billion (-9%) in current dollars, -$756 million compared to March '08Historically, March is among the strongest months of the year; in 2009, it was the same as July 2008, historically the weakest month of the year

5Currently, the last published figures indicated that even in one of the strongest monthsOf the year, march, the US print market declined 9%. Translated into dollars, thats $756Million less in print shipments than in March 2008.

6Updated U.S. Forecasts(as of 5/2009, in 2009$)

Exclusive Report Sponsor6So whats the forecast? Will things get better?

Unfortunately, for the OVERALL print market the answer is no. According to theWhat they think.com forecast, the declining trend will continue with the print marketEnding up at $88 Billion in 2009 and moving to $62 Billion in 2014.

The bad news is that the overall market will continue to decline.

The good news is that most of this decline is in markets that distributors dont tend to Sell in like long run direct mail, newspapers, catalog and magazines and packaging.

What changed?Industry volumes decreasingmature marketDigital technology breaks down walls between market segmentsNew competitor in every marketNew market structures emergingMore emphasis on specific customer targetingNeed for greater ROI and share of customers

At this point your probably wondering Am I in the right industry?

YOU ARE.

But its important to understand what happened and how you can take advantage of it.

The print market in the US is in a mature phase. Digital technologies have changed theWay you an I communicate with each other. We now have phones we carry with us.We now can text each other, send photos to each other, read current news on our phones or computers. Billions of emails have replaced billions of occupant only direct mail pieces. Internet catalogs have replaced the Sears Wish book, or the JC Penny clothing catalog. Theres a new competitor in every market and new markets are emerging and changing how they go to market.

Getting a direct mail piece with occupant only is like shouting hey you pretty impersonal if your trying to sell a product or service. Customers now look for sellers to know their name and what they like. And your customers are demanding a greater ROI on their print and ad spec budget spends resulting in larger share of customer.7What do the numbers say?Us pod Market Retail value

The Digital print on demand market is the bright spot of the US print market.

As this graph illustrates, in 2006, overall digital printing accounted for about $46 Billion dollars with digital color, $36 Billion.

In just 5 years , the print on demand market will grow to $79 Billion with color almost doubling in size in just 5 years.

Thats why you need to be in this market.8Digital color = efficiency/effectivenessDigital Effectiveness : Doing the right thingThe RIGHT activitiesApplying the BEST strategiesResulting in competitive advantage

Digital Efficiency : Doing the thing rightFewest resourcesShortest timeHighest ROI

How do you define Digital color?

First, digital printing can be defined thru understanding Digital Effectiveness, or, doing the RIGHT thing. What thing? The right printing activities like having accurate databases, access to creative design and understanding the digital process.Applying the best strategies like using cross media to make the printed element of the marketing campaign more effective, and all that digital effectiveness resulting in a competitive advantage for you.

Secondly, Digital Efficiency.or, doing the thing Right.

With the increasing speed of technological change, there are multiple layers of digital presses, each having capabilities that increase the productivity of the process.Selection of the right equipment, speed to market and high response rates is the added value to need to bring to your customer.9Defining digitalStatic colorBusiness CardsSingle message postcardsStatic info sell sheetsBookmarksCalendarsNewslettersStatic info brochuresMenus

Lets start easy. Basic Digital Printing starts with what we call static color, short run jobs. The same image printed for quantities that are too costly to do on an offset press. These products includeBusiness CardsPostcardsSell sheetsBookmarksCalendarsNewslettersBrochures and menus.10Defining digitalVariable color1 : 1 PersonalizationSpecific customer information on each pieceCustomizing/VersioningVariable copy changes paced to demographic features

Coupled with another cross-over mediaPURLSE-mail marketingTele-marketing

So what happens when we want to make every individual printed piece personal?

Now we get to the next level, Variable color printing.

When we print specific customer information on a product, applicable only to that person, we have taken the leap to personalization.

Lets say we have a basic brochure but want to produce only 500 for each of 5 different locations? Thats customizing.

Whats the difference?

If you send a direct mail piece to occupant you get a one or two tenths of a percent response rate.

Personalize the mailing, and the response jumps to 3-10% based on the extent of the personalization and the offering.

Personalize the mailing, add a PURL, or , Personal Website, support with email and even a phone call, and response rates can hit 20%.The good news thru all this? YOU are selling more than just print.11Digital or offset?TypeColorSizePagesMethodFinishCrossoverSell Sheet4/48.5 x 112StaticTrimmed2,857Postcard4/16 x 92Address & SortTrimmed22,096

Catalog4/48.5 x 1116Collated on digitalStitched1,262Book4/48 x 1080 + coverCollated on digitalPerfect1,131Newsletter2/28.5 x 114Collated on digitalTrim/fold1,871Menu4/411 x 174StaticTrim/fold1,428

Part of the Digital Efficiency is knowing what equipment to use.

A recent study was completed looking at how to print certain commonly ordered print jobs that could be produced either digitally, or, with convention offset presses.

The results were some cross-over quantities where the cost of digitally produced product was the same as the conventionally printed process.

For static color sell sheets, the crossover was 2, 857.For 6x9 postcards where the name, address was imaged on each, the crossover was a little over 22,000 postcards.

Even in more complicated print jobs like an 80 page plus cover full color book, you can print up to 1, 131 books cheaper on a digital press.12Digital or offset?TypeColorSizeQuantityPagesDigitalHoursOffset HoursSell Sheet4/48.5 x 11250021.22.1Postcard4/16 x 915,00023.63.3

Catalog4/48.5 x 111,000165.010.0Book4/48 x 1010080+Cover3.026.0Newsletter2/28.5 x 111,00041.42.3Menu4/411 x 171,50041.42.0

Another value you supply to your customer is speed to market. With the same study we just reviewed, a specific quantity for each commonly ordered product was selected and timed for job completion.

The far right two columns show the time differences to produce the same jobs.For sell sheets at a quantity of 2500, it takes 1.2 hours to produce on a digital press versus 2 hours on offset.

Postcards are about even at the 15000 quantity

For 1000, 16 page full color catalog, digital printing takes only 5 hours to produce compared to 10 hours using conventional offset printing methods.

The book job we just mentioned takes 26 hours using offset printing and only takes 3 hours to produce digitally. A HUGE difference in time and money. Again, more value that you add by being digitally efficient.13What does the distributor add?ExpertiseFast moving technologystay ahead of customersVendor ChoicesDifferent machines with different productsCross-media effectiveness

We have talked about distributors adding value to the process. Two major areas of value contribution are Expertise and Vendor Choices.

Digital print technology continues to develop at warp speed. Staying ahead of your customers can make you appear to be the expert.

As we have outlined in the previous slides, different machines, with different capabilities and speed make choice selection critical. Coupled with expertise in adding the value of other cross media communication techniques like PURLS and email marketing can contribute to you being an invaluable resource to your customer.14What value do you provide?More personalized and relevant contentImproved ROIFaster turn times for delivering messagesFaster time to get to marketReduced waste and obsolescenceCradle to grave project management

Other areas of value you can contribute include

Access to creative assets that can translate your customers marketing messages into higher personalized and relevant content is invaluable.

Delivering improved ROIs on marketing projects. A point to remember here is that the direct mail model has changed dramatically over the last few years with emphasis now being on cost per RESPONSE and not cost per MAILING.

Getting your customers message to market in shorter time, reducing print waste and having overall total project management can give you control of a customer and the purchases they need to make to support their marketing programs.15How do you deliver?Become a marketing services providerContent is KING!! Become part of the messagePartner with your vendors who are the expertsSell your customers on what the real value isCost per responseShare of customerMeasureable results

NOT just cost of mailing

The question is.can you deliver with WHO you are now?

Are you a product provider? Or a solutions provider.

Are you a project follower? Or a project leader..

The overall movement of distributors is to provide solutions to the marketing challenges of their customers. Become a marketing services provider. Become the developer of content with your customer.

Then, sell your customers on what the real value of their investment is..Cost per response, larger share of customers and proved by measureable results.

16Digital EffectivenessDefinable project goalswhat does the customer want?Whats the budget? Whats the return?Is the customer prepared?Effective info databaseResponse capability

Lets get back to our definition of Digital printing.

From a Digital Effectiveness view, or, doing the right thing, does your customer have definable project goals?

Whats the budget to deliver the message? What are they looking for in a return?

Is the customer prepared with effective contact information and able to respond to the response they expect?

Some customers have extensive customer databases which is the feeding point for effective marketing communications. Some have nothing. The customers with nothing can also be helped, and the value you bring to the table at that point is helping them define the demographics of the list you will purchase for them.

17Digital EfficiencyHow do you go to market?Online strategyMailingsMailings plus online PURLMailing plus PURL plus email marketingMailings plus PURL plus email plus personal contactTranslates into action plan/press selection

From an efficiency viewpoint, how are you going to help your customer go to market? Can you assist them with an online strategy?

Will effective mailing get it done..

Mailings with an online PURL?

How about that plus email marketing?

What about all of that plus personal contact.

All of WHAT your customer wants in a marketing message will dictate the action plan you will develop with them.

And that action plan will dictate content design and vendor selection.18Internet is a strategy

One of the critical efficiency strategies is having your customers order products with an on line company store. The internet, if you havent noticed, is here to stay and will become the primary ordering method of your customers.

This chart shows the dramatic growth of internet enabled print shipments from 2006 to 2011. In just 18 months, buyers will order $33 Billion dollars of product through an online portal. Are you ready?19Some possibilitiesStatic Color ProductsOne time orders?REPEAT ORDERS?Set up on company store?Static now.can they be personalized? Versioned?Whats the quality issue?Pleasing color ok?

So, weve learned about digital effectiveness and efficiency, some history of digital print and identified some of the value you can deliver.

What are the possibilities?

Starting out slow, lets look at short run full color products, or, static color.

Static color work can be as simple as the one time printing of a postcard or sell sheet for your customer. Handouts for the pizza franchise, a postcard for a grand opening or even full color business cards.

Perhaps its a marketing piece your customer uses a lot of, and orders frequently. Now theres an online ordering opportunity.

What if the customer has 2, 3 or more locations and wants the sell sheets customized for each location? Yep, we can do that too.

Many customers will ask about print quality. Assure them that quality has come a long way and short of reproducing an art quality original, digital print is great quality.20

Here are some examples of short run, static color marketing pieces. A Door hanger with a die cut door knob slit, a bookmark and a travel brochure.

If we were printing the travel brochure for several offices of the same company, we could have printed the office location in the large white area below the ocean image.21

Here, we see the front and back of a golf course score card.

The front is in full color with a clear UV coating. The backside is printed in full color, on the uncoated side of the coated one side stock.

The card is then scored down the middle for easy printing and delivered flat to the customer.

22More possibilitiesPersonalized MarketingMerging personal information to relevant imagesQuality of information databasesDelivering the marketing messageCapture definable results

As we get into the direct marketing arena, we now can personalize the messages to the end user customers. Using effective database information, we can merge that information right into the design and content to make the message personal and relevant.

Most important in this process is to have high quality information and a way for the addressee to respond so the results can be captured and measured.23

24Here is a postcard with the persons name imaged right on to a birthday cake.

25It;s your BirthdayHappy Birthday from Dicks and take 10 bucks off your next 50 dollar purchase.The salutation Dear Larry, is actually a handwriting font used to give the perception that the card was personally made out to the recipient.

26Opening the birthday card completely, a personalized message, again using the handwriting font, is used to convey best wishes from the store manager.

27In this example, a car dealership has kept track of all the repair and maintenance work it has performed on Phil Baileys car. Its a highly personlized brochure.name on it.AND the exact make and color of Phil Baileys car.a sunfire.

28Its a review of the service record of Phils car from the dealership and an offer of oil change and tire/brake inspection..The Dealership is reminding Phil to keep his car maintained..and VICKI is the one he should call.

29To help cement the offering, the dealership is selecting four coupon offerings to Phil based on the needs of his car.

This example shows the critical importance of having high quality service records and up to date contact info for Phil Bailey.

Heres an example of a mailing I received for last years Graph Expo show in Chicago. My first name leads the message so its sure to catch my eye. The front of the racing car has my companys name just below the number one and this offer deals with a giveaway for going online to register, and the last item on the front of the mailing is the PURL that leads me directly to my own webpage.30

On the backside of the postcard, the offer is explained and again, the PURL is listed and all the benefits I can receive by logging on. The log on, and the registration info I must enter, is the info that the sender was looking for.

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Still another mailing has my name prominently displayed, asking me the old pickup line, Hey baby, whats your sign?

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Upon opening the mailing, I find a PURL that leads me to a registration page for a webinar about buying PURL capability for my company. Pretty tricky..33ConclusionsDigital color print on demand is fastest growing segment of printWhen you add value.you add/increase profitEvery time a human touches a job, money is lostStart easybut startDigital printing IS for everyoneStay on the right side of the digital divide

Now, lets pull it all together. Digital print on demand is the fastest growing segment of a declining print market and as all smart distributors know, its best to be in a growing product market.

All distributors sell products. The rich ones sell solutions by adding value to their customers businesses. When you add value, products and services follow, as do increased profits.

Remember a critical corollary of the print market. Every time you touch a job, money is lost. Remember to do the right thing..effectiveness, and do it right, efficiency. Online strategies, for the right customers, become an annuity to your bottom line.

If you havent sold print, and specifically, digital print, then start slow, but start. If you have experience in print and short run color work, start to deliver the cross media opportunities to your customers.

Digital printing can be for anyone who wants to expand their offerings.

Finally, stay on the right side of the digital divide. As the technology changes, participate in webinars, do your own research and as always, depend on your vendors to fill in the blanks. When you win, your vendors win.and so do your customers.Thanks, for listening today34Chart135.910.6200669.69.42011

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