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Beset by two major recessions, a quantum shift in technology and changes in the attitudes of brand owners, print media has been buffeted from all sides.
In many cases, marketers perceive digital media to be easier, faster, less expensive and more accessible. As increasing pressure is placed on marketing and advertising budgets, the ability to gain near-real-time metrics from non-print campaigns is luring many marketers away from the print media.
Marketers are faced with an increasing array of communication choices, but not increased budgets to pay for those choices. Added to the traditional options (TV, radio, magazines, newspapers, direct mail and out-of-home), are the new media of the Internet and, increasingly, mobile, video and social media.
Even with these changes, print media remains an important (albeit declining) part of the mix. According to Printing Industries of America, the U.S. printing market declined from nearly $175 billion in 2007 to about $145 billion by 2011. Optimistic forecasts show print growing by perhaps 2% a year in nominal terms. Other scenarios project a decline of as much as 30% to 40% within the next five or six years. It should be noted that the more optimistic forecasts include packaging, while the more negative figures are based solely on commercial printing.
The demand for shorter runs and personalized or customized content indicates that the market for digital print can be expected to continue its growth, especially as digital presses become more robust, both in price/performance and sheet size/throughput. Demand for conventional presses will, however, continue to decline— due in part to the overall decline in printing demand. Another contributing factor is that as conventional presses become more automated and efficient, a new press often replaces two or three older presses, continuing the overall population decline for conventional offset presses.
Advertising spending declinesAfter years of steady growth, advertising spending declined dramatically with the economic recession in 2008 and 2009. Although it has picked up somewhat, advertising spending is expected to remain below its pre-recession peak for many years to come. Pivotal Research believes it will be at least 2017 before advertising expenditures again reach 2008 levels.
Understanding how advertising spending decisions are made—and by whom—is not an easy task. Every company is different, and within each company, unique brands or lines of business often operate differently. Moreover, as personnel and strategies change, the decision makers (and the decisions they make) also change. For example, despite a successful cross-media campaign for Maybelline, a change in marketing management resulted in the project being cancelled in favor of the
ExecutiveSynopsis
Defining & Understanding Communication Platform Trends: Implications to the Print Value Chain
For your copy of “Defining & Understanding Communication Platform Trends: Implications to the Print Value Chain,” contact NPES at (703) 264-7200. You may also log in to the NPES web site, go to PRIMIR Research and
download a copy of the full report or other related documents.
© March 2013 NPES/PRIMIR
ABOUT THIS STUDYThis report provides members an insight into the current and future state of communication platforms and their impact on future print volume in North America. The broad media categories covered include: print, broadcast, Internet, mobile, out-of-home, social media, events and other.
The study attempts to quantify and explain how platform choices are made by organizations. The conclusions will inform members so they can better position their products and services to meet changing needs and to understand the need for new products and services.
The researchers used a variety of primary and secondary sources to compile this study, supplemented by interviews with brand owners, agency executives and industry experts and consultants. Industry analysts also made themselves available for in-depth discussions. These experts raised issues and highlighted trends not readily apparent by other research.
In-depth interviews were also conducted with business owners, senior marketing and agency executives, providing insights into changes in direct marketing activities and the challenges these present for members.
Secondary research encompassed surveys, articles and reports, trade magazine and industry newsletters, published case studies, and white papers and consultant reports covering direct marketing, including consumer attitudes.
new executive’s preference for a different approach. Other marketing executives indicated that when personnel changes occur, the balance of power between traditional and digital platforms is more likely to shift toward digital.
Over the past decade evidence suggests that platform decisions are being moved in-house from the hands of agencies. Marketing executives, line-of-business marketers and brand owners are taking greater control of the overall process. And, where appropriate, responsibilities for many marketing activities are increasingly being delegated to business units mandated to operate within corporate brand and messaging guidelines, which remain centralized.
“Brand managers are still in control,” comments a senior vice president of an international agency. “If there is global or corporate branding involved, that’s at the CMO level.” Chief Marketing Officers want to control the overall corporate message and leverage their buying power with media owners. One chief marketing officer commented: “We have one agency and one media agency that we use to create traditional and digital ad campaigns for the whole company. All of our advertising is centralized in corporate headquarters, versus under each business group.”
But, many responsibilities are now more diffused throughout the organization, even if closely monitored by corporate. Because of the proliferation of platforms, people making the buying decisions at the corporate level have less knowledge and expertise with individual platforms; newer platforms require different expertise. CMOs and brand owners are increasingly drawing upon freelancers and specialized boutique digital agencies for access to and advice about digital platforms.
For service providers and the suppliers that support them, the good news is that it is a corporate—rather than an agency—sales thrust. The bad news is that there are many more players at the table within the enterprise, making sales cycles longer and more complex.
2
0
20%
40%
60%
80%
20122011
Field OfficeBrand Product
Perc
enta
ge o
f Firm
s
Perc
enta
ge o
f Mar
ket
84.3%79.7%
26.5%
38.3%
16.9% 17.3%10.8% 9.3%
Business
$269,000 billions $227,000 billions $253,000 billions
Corporate
Primarily Digital
TV/Radio
Primarily Print
0
20
40
60
80
100 Paid SearchInternet
Radio
Television
OutdoorMagazines
Newspapers
Directories
Direct Mail
Catalogs
Collateral
Paid Search
Internet
Radio
Television
OutdoorMagazines
NewspapersDirectoriesDirect Mail
Catalogs
Collateral
Paid Search
Internet
Radio
Television
OutdoorMagazines
NewspapersDirectoriesDirect Mail
Catalogs
Collateral
201520112007
PRIM
ARI
LY P
RIN
T
PRIM
ARI
LY P
RIN
T
PRIM
ARI
LY P
RIN
T
2007$269,000 billions
60%29%
11%
2011$227,000 billions
47%
32%
21%
2015$253,000 billions
35%
33%
32%
0
20%
40%
60%
80%
20122011
Field OfficeBrand Product
Perc
enta
ge o
f Firm
s
Perc
enta
ge o
f Mar
ket
84.3%79.7%
26.5%
38.3%
16.9% 17.3%10.8% 9.3%
Business
$269,000 billions $227,000 billions $253,000 billions
Corporate
Primarily Digital
TV/Radio
Primarily Print
0
20
40
60
80
100 Paid SearchInternet
Radio
Television
OutdoorMagazines
Newspapers
Directories
Direct Mail
Catalogs
Collateral
Paid Search
Internet
Radio
Television
OutdoorMagazines
NewspapersDirectoriesDirect Mail
Catalogs
Collateral
Paid Search
Internet
Radio
Television
OutdoorMagazines
NewspapersDirectoriesDirect Mail
Catalogs
Collateral
201520112007
PRIM
ARI
LY P
RIN
T
PRIM
ARI
LY P
RIN
T
PRIM
ARI
LY P
RIN
T
2007$269,000 billions
60%29%
11%
2011$227,000 billions
47%
32%
21%
2015$253,000 billions
35%
33%
32%
Where marketing is located, in firms
major communication platforms (u.s.) 2007-2015
Major communication platformsIn this study, conventional or traditional platforms include broadcast (TV and radio), primarily print (publications, direct mail, catalogs and collateral), out-of-home, and trade shows, among others. Primarily, digital media and platforms include Internet-based media (including search and display ads), email, mobile and social media. The lines between these channels are increasingly blurred. For example, newspapers and magazines are frequently also found on digital platforms; both TV and radio use the Internet for content distribution.
Blurring also occurs as brand owners, marketers and agencies more commonly use multiple channels separately, as well as together, as part of an integrated program.
The shift from traditional to digital media has come primarily from print. As marketing spending recovers, the bulk of the growth is in new media. TV and traditional media hold up reasonably well, while platforms that rely primarily on print (newspapers and magazines) decline. Nevertheless, while print platforms continue to lose share, their absolute decline will slow.
Integrated marketing campaigns are not new. In the old days, radio, TV, newspapers and magazines were utilized in multi-channel campaigns. Today, multi-channel usually refers to campaigns that include both traditional and digital media.
The biggest difference today is the level of interactivity with consumers that can be achieved. As marketers shift more of their budget dollars to digital channels, they are investing in technology that will help them react to and interact with customers.
The Gartner Group, among others, projects that CMOs will soon spend more on technology than Chief Information Officers. To be successful in the marketing services arena, companies must make their own technology investments in order to serve their customers. This includes understanding and using technologies allied to Search Engine Marketing (SEM) and Search Engine Optimization (SEO), social media, and emerging analytical methods using “Big Data.”
Near field communication (NFC) is a set of standards for smart phones and similar devices to establish radio communication with each other or with other NFC-enabled devices. It builds on RFID systems by allowing two-way communication. Present and anticipated applications include contactless transactions, data exchange and simplified setup of more complex communications such as WiFi.
Using NFC, one marketer explains, “We can tell when you are in our booth and where you are. We have been doing promotions for key shows, encouraging attendees to go online before the show to tell us what they are interested in and to download our app. When they enter our booth, they can scan themselves and have a completely customized experience. The attendee is creating the environment and atmosphere.”
Implications — The Bottom LinePrint increasingly is serving to drive recipients to digital venues. And it’s not just online in the conventional sense—it is also mobile. Internet guru Mary Meeker projects that sales of mobile devices (smart phones and tablets) will gradually increase to more than 1.7 billion units worldwide in 2015, with laptops and PCs declining to 400 million units sold. That’s a huge shift that will have impact across all communication platforms.
For print service providers, everything is on-demand, regardless of platform. Marketers and brand owners expect everything to be turned immediately. They also have bought into multi-channel marketing as the wave of today and of the future. It’s really not about platform anymore. It is about reaching consumers on their home turf, wherever that may be.
3
0
20%
40%
60%
80%
20122011
Field OfficeBrand Product
Perc
enta
ge o
f Firm
s
Perc
enta
ge o
f Mar
ket
84.3%79.7%
26.5%
38.3%
16.9% 17.3%10.8% 9.3%
Business
$269,000 billions $227,000 billions $253,000 billions
Corporate
Primarily Digital
TV/Radio
Primarily Print
0
20
40
60
80
100 Paid SearchInternet
Radio
Television
OutdoorMagazines
Newspapers
Directories
Direct Mail
Catalogs
Collateral
Paid Search
Internet
Radio
Television
OutdoorMagazines
NewspapersDirectoriesDirect Mail
Catalogs
Collateral
Paid Search
Internet
Radio
Television
OutdoorMagazines
NewspapersDirectoriesDirect Mail
Catalogs
Collateral
201520112007
PRIM
ARI
LY P
RIN
T
PRIM
ARI
LY P
RIN
T
PRIM
ARI
LY P
RIN
T
2007$269,000 billions
60%29%
11%
2011$227,000 billions
47%
32%
21%
2015$253,000 billions
35%
33%
32%
changing share ofmajor communication platforms
4
The Association for Suppliers of Printing, Publishing and Converting Technologies
1899 Preston White Drive, Reston, VA 20191-5468 / (703) 264–7200 / [email protected]
For more detailed information on specific communication platform trends and implications on member firms, please refer to the complete
study, “Defining & Understanding Communication Platform Trends: Implications to the Print Value Chain.”
At-a-glance
35% Print’s share of the major communication platforms in 2015, down from 60% in 2007
$6.1 billion N.A. ad spending in 2015 for social media, up from $2.5 billion in 2011
$2.6 billion N.A. ad spending in 2015 for mobile media, up from $760 million in 2011
$50 billion U.S. ad spending in 2015 for Internet platforms, up from $31.7 billion in 2011
765.4 billion pages N.A.in 2014 for marketing collateral, down from 892.8 billion pages in 2011
$17.8 billion U.S. ad spending in 2015 for direct mail, down from $24.9 billion in 2007
$11.1 billion U.S. ad spending in 2015 for magazines, down from $19.4 billion in 2007
The study indicates that printing trade organizations need to do a better job of promoting print. Printers have criticized association efforts as “lame.” A senior advertising executive has attended a number of presentations promoting print, but found them unexciting. “Nothing really convinced me that I should try print more often. The associations... don’t speak to the [younger generation] in a way they can relate to.” Another senior marketing exec echoed these remarks. “Media companies try to pitch the effectiveness of print, but people aren’t buying it. The buyers are 20-somethings who rotate through jobs and don’t use or believe [in] the product.”
The industry should, first, stop apologizing for print. Second, understand that new media are going to continue to gain share of communications and advertising dollars. Even so, print has some unique characteristics that digital media do not. With the use of special effects, for example, print engages in a way that digital media can’t. And technologies are readily available to make print interactive as part of an integrated campaign.
Within the commercial printing industry, digital printing offers a growth opportunity as a percentage of offset pages continue to migrate to digital, along with new pages from new applications made possible by new technologies. The critical success factor here is automation—taking as much time, cost and potential for error out of the process by removing touches from the process, both internally and with customers.
A growing number of print service providers are adding digital media services. They offer cross-media services, social media, mobile service, out-of-house and other large format applications. Sometimes even packaging. These firms are growing and excited about the opportunities the future holds. They are successful because they understand the needs of the marketer and the consumer and accept that “multi-channel” may not always include print.
Both print service providers and the suppliers that support them must have a clear grasp of why customers print—and why they don’t. They must be fluent in new media; they must adopt and adapt. They must look to new technologies that add value to print or provide new revenue streams—including 3D printing, printed electronics, mobile, augmented reality and near field communications.
For all, the health and direction of print service providers is critical. While there are some differences in implications for each of the firms in the print value chain, the future is a function of the role of print and its relationship to digital media. Individual firms must understand new media, adopt it as appropriate in their own business, and adapt to the necessary changes.
The effects of today’s business communications trends are being felt by suppliers. Keep in mind that this study focused on North American markets. The global market for printed communications—especially in Asia and Latin America—is quite different. Suppliers can—and should—focus on the global opportunity and not be limited to North America.
Going forward, the important thing is to be cognizant of the dramatic changes that are impacting the printing industry. Next, be aggressive about putting strategies in place that take advantage of these trends and make sense for your business and its customers. As Will Rogers famously commented, “Even if you are on the right track, you’ll get run over if you just sit there.” n
