There haven’t been many good news print surveys over the past few years and, at first glance, research published last week by accountancy firm and financial adviser Grant Thornton doesn’t seem to give much cause for celebration. But it may just help push some unenlightened firms into changing the way they do business.
In a survey of 102 print buyers and senior marketing executives conducted in December last year, 83% of respondents said they were currently producing online-only versions of marketing materials such as newsletters and brochures, while one in three items are no longer being printed at all, but instead produced and distributed in electronic form only.
It’s likely that more print firms could struggle judging by the report’s findings. Around a third of large companies are planning to cut print spend by an average of 20% during 2007 and this all stems not just from straightforward cost-cutting, but environmental concerns.
Daniel Smith, head of the print industry group at Grant Thornton explains: “There is a green drive from us all. People also don’t want to be buried under a load of paper.”
Online on the up
According to the survey, 70% of large businesses plan to increase their reliance on e-marketing over the next three years by boosting their overall online output by a further 35%. More than 70% are also expecting to print less within three years as a direct consequence of their efforts to reduce the environmental impact of their corporate activities.
Despite that, Smith notes, not everything has moved online and there is still a need for magazines and point of sale. Volumes in those areas, he claims, are still on the up.
“In parallel, during the recent past, the use of e-marketing has continued to creep up,” says Smith. “As volumes have continued to rise, so has the proportion of non-printed materials. Already suffering from massive overcapacity and very low margins, a shift in behaviour could seriously affect the industry.”
That said, only 32% of respondents to the survey cited the effectiveness of e-marketing over print as a reason for going only online – far more important were cost and the environment.
Nevertheless, it does mean that print firms need to revise their offering, according to Smith. “They have to be smarter with their pricing,” he says. “Printers are too quick to give away margin and are far too driven by turnover.”
It may have been said before, but Smith argues that in the face of such attitudes from buyers, printers need to offer more than ink on paper.
Last week, two direct mail specialists spotted that in order to make money in print, you needed to invest in online services. Both SR Communications and Howitt invested in XMPie software, which allows for the production of highly personalised print, email, SMS and web campaigns.
It’s not just a trend in direct mail. Changes in government legislation mean that shareholders in quoted companies can now decide if they want report and accounts in a printed version. If not, then they can be automatically sent digitally. Before January this year, it was the other way round – print was the automatic option unless the recipient said differently.
Corporate Mailing Matters is one financial print specialist that is looking at diversifying into other areas. In around month’s time it plans to launch its own online service.
Chief executive Yolanda Noble says: “You need to give clients the option of traditional printing and mailing, but also print on demand, email marketing and marketing response systems.
“While people do still want to look at a printed product, you have to offer other varieties. We are more of a marketing communication company and we don’t just see ourselves as a printing and mailing house.”
Jonathan Stuart, director of added value services at Paragon Group, explains that if a print company is simply quoting for work then life is likely to be tough.
“To have added value services is an essential part of survival,” he says.
But he points out that emails can gain as negative a reputation as untargeted direct mail with recipients simply seeing them as spam and deleting the message. But, used properly, he argues, emails can be a powerful tool and link up with print, rather than being pitched against it.
“I think it is still early days in the UK, but I have no doubt it will be a significant part of the future in direct marketing,” predicts Stuart.
And the environmental issue means that more companies will be demanding their print suppliers to, as Stuart puts it, “print less but print smarter”. Paragon has developed an online template system allowing individual divisions of companies to design print for a particular market – making print more targeted and personalised is another way of ensuring that paper isn’t used unnecessarily.
Grant Thornton’s survey may act as another wake-up call for the beleaguered print industry, particularly as the firm notes that the sector is in for a “rocky ride over the next 24 months”. But the rise of online in sectors such as report and accounts as well as direct marketing should be viewed as an opportunity rather than a threat to print.
Grant Thornton survey: the future for the UK print industry
• One-third of large firms plan to cut print spend by 20% in 2007
• Reasons to cut spend are costs (62%) and environmental responsibility (53%)
• 70% plan to increase their reliance on e-marketing and overall online output is set to increase by 35%
• 49% of respondents say that print prices have gone up in the past year
• 58% say that printing prices are “still competitive” and 30% see them as “about right”