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The Convergence of Print, E-Commerce And Other Media

Are you concerned about the e-commerce wave?  My company, Rickard Bindery, is celebrating its 101st anniversary this year and for most of our existence, we can’t remember a time when the graphic arts industry didn’t feel “threatened” by one new technology or another.  First, it was the telephone, then radio, TV and the “paperless society.”  Sure, each development affected our business, but as long as we caught the wave, we were fine.  From our perspective, e-commerce doesn’t scare us – we’re just dusting off our surfboards.

Yes, print markets are changing.  Computer manuals have far fewer pages than they did five years ago.  In-store product catalogs are rapidly going digital.  The forms business has been hurt.  According to a new Raine Consulting industry study, the printed publications market will drop from today’s $39 Billion level to $29B by 2005.  On the other hand, Raine predicts that the market for promotional printing will increase 50%, to a whopping $52B, over the next five years.  Although the printing industry has begun to experience a slowdown in its rate of growth, nobody I know is forecasting an actual decrease.

For the moment, let’s ignore Wall Street’s current disappointment with many dot.com companies.  The point for us is that there is sustainable growth in some print markets and our challenge is to position our own companies well.  Smart marketers will take advantage of the best promotional tools available to them and select a mix of marketing vehicles that achieves their business goals.  E-commerce will have a vital role to play – and so will print.

A large percentage of commercially printed matter attempts to separate customers from their discretionary dollars.  Until recently, marketers had three primary categories of promotional activities within which to engage:

Now, they have one more:

Throw out the hype.  As exciting as e-commerce is, it really is just another category of promotional tool in a savvy marketer’s arsenal.  Each category has pros and cons.

The Big Four
Sales.  Sales activity is very personal and very effective.  However, a sales force is an expensive proposition and inappropriate for many types of products and services.

Airwaves.  TV and radio reach a lot of people at a relatively low cost per impression.  However, the Achilles Heel of airwave media is that the pitch gets to the consumer on the advertiser’s schedule, not the consumer’s.  This means that both TV and radio are poorly suited for direct response because most people can’t remember phone numbers, store locations and website addresses unless they happen to have a writing or recording instrument handy.  Viewers and listeners will get a basic idea about what is being pitched, but taking action is difficult.  Moreover, channel surfing during commercials seems to be on the rise.

Printing.  Print is convenient.  One of the major benefits of this category is that people can view promotional materials on their own schedule, not the advertisers’.  Then, if they choose to take action, they can bring the printed piece with them for reference purposes while making telephone calls or accessing websites.  Yes, some forms of print behave more like airwave media (i.e., billboards and signage), but in general, print is easily stored and highly portable.

The Internet.  The Internet offers improvement over both print and airwave marketing in two significant ways.  First, it performs exceptionally well for executing simple transactions in a “point and click” environment.  Second, it is a low cost way to provide lots of information to the marketplace and keep it current.  However, as a promotional medium, the Internet is weak.  Soliciting to “opt-in” lists is generally OK, but as people get more and more fed up with e-mail and banner advertising overload, click through rates will plunge.  Violation of electronic privacy is hardly something to be trifled with.  With a few keystrokes, angry customers can literally send out millions of defamatory e-mails or launch spiteful websites.

Other Factors
There are other topics to consider.  First, printing has an unencumbered field of vision, meaning messages can be delivered in many physical sizes.  Although electronic pages can be unlimited in size too, their practical viewing area is limited by the size of the viewer’s computer monitor.  Side-by-side product comparisons from different companies are easy to do if the medium is print – just spread out competing catalogs and brochures on a large flat surface.  Comparison-shopping on the web is possible, but it requires toggling prowess and effective management of limited viewing space.

Also, today’s pixel technology means that image reproduction on computer monitors is of lesser quality than print.  For example, consider how people buy furniture.  Stores, catalogs and websites are three popular ways.  As in many businesses, maintaining low return rates is critically important.  Return rates are lowest when customers’ expectations are met.  When you buy furniture off a store floor, you’re pretty sure about the quality you’re going to get.  When you order from an image, whether it be digital or printed, the product better match your expectations, or you might return it.  In order to attract business, many furniture dot.coms offer extremely liberal return policies to convince their target audiences to try their services.  This can be a dangerous way of doing business – as Living.com discovered when their return rate exceeded 40%, causing them to go out of business.  The bottom line is that images must accurately depict the product, and print is still best at doing this.

What Are Smart Marketers Doing?
According to a widely accepted business school marketing model, marketers should lead their target audiences through the four AIDA steps – Awareness, Interest, Decision and Action.  A reasonable strategy is to first choose shotgun-style airwave and print (magazines, newspapers, billboards, etc.) media to create market awareness.  Next, use rifle vehicles like targeted direct mail and tele-prospecting to generate buying interest.  Then, apply direct sales principles to get customers to the “buy” decision.  And finally, use interactive media, like the Internet, call centers or direct response print, to get customers to take action.

As always, effective marketing relies on using the best available tools to influence buying behavior.  None of the big four promotional categories are going to disappear anytime soon.  Media convergence is a good thing, even for those of us in the graphic arts industry.  As information continues to migrate from print to the Internet, manuals and catalogs will become thinner and less important.  However, the inherent promotional weakness of the e-world means that the demand for promotional printed material will increase, just as Raine Consulting predicts.

What are we doing at Rickard Bindery?  Since the market for high impact promotional materials is growing, our response is to focus on technically challenging folding, gluing and saddle stitching solutions while de-emphasizing commodity-like thick books and catalogs.  In addition, we now offer a post press “e-tip-of-the-month.”  (To subscribe, please send your name, company name and e-mail address to info@rickardbindery.com. Please put “e-tips subscribe” in the header.)

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In 1939, the New York Times predicted that the automatic typewriter was going to make the pen and pencil obsolete.  This didn’t happen.  Sure, the typewriter forced these industries to sharpen their strategies, but they thrived for six more decades and will continue to do so.  Now, some traditional manufacturers, like the A.T. Cross Pen Company for instance, are making forays into the digital arena with high tech electronic products.  Instead of feeling threatened, let’s wish them well.

Jack Rickard is the President of Rickard Bindery, and a former President of the Printing Industries of Illinois and Indiana, Binding Industries of America, and Graphic Finishing Industries of Illinois.  Rickard Bindery specializes in discovering solutions to challenging bindery jobs.  He can be reached at (800) 747-1389.  His website is www.rickardbindery.com.